But I would also say that the danger with wireless data is to get too focused on the network. All the networks will be able to deliver comparable through-put speeds. In two years it will be [via] Edge on our part. That will be 100-150 Kbps.
All the networks will have the capabilities of comparable throughput speeds. What's important to customers is devices and applications. Ultimately, customers don't care how fast the bit is going to the device. They care that they can surf the Internet. Admittedly, speed impacts that, but it should be transparent to the customer rather than a business decision.
Our Mobiltex network, we deliver e-mail with network data of about 6 to 8 Kbps. It's a network where applications have been built to the network and it works well. In the industry, it's not just whose network is better — they'll all be the same. It's keeping the network, device and applications working together.
Q: What do you envision future wireless devices to look like?
A: With devices, as we get more applications, it will be more important to have color displays, and more memory. Applications will get away from text to more graphical. If users get to the point where they'll get on to the Internet, and don't have to do mediation to reduce the content, the more powerful wireless data will be. We've got the first version of a GPRS slide — which is a cradle. It's the Compaq iPaq. It can operate in 40-50 Kbps mode. I had it yesterday, [saw] a version of Microsoft Internet Explorer, and it's regular, not just a text-based application.
Q: In today's 3G applications, it seems to use the wireless phone as only a modem. Will we see untethered wireless phones accessing a 3G network?
A: The short answer is yes, but here's the longer answer. The Korean and Japanese devices use, rather than a terminal, an all-inclusive. It's a convergence of devices to use wireless data capability. With handset enabler for applications, and much wider screens, with more memory and more color. To download and review a video clip or MP3 file needs more storage than that's available today. We will get there, but there are conflicting things—consumers still want smaller handsets, but for rich content, you need bigger display.
Somewhere we'll meet in the middle. Picture a clamshell handset, for some Internet experience, that mediates without the graphics, then the next step up will be a PDA, more data-centric devices with voice. Handspring has a phone on their device, like Palm. More data devices, but used as a phone. There's not going to be one form of data delivery to the handset.
Here's one vision of what might happen for the business users, who, by the way, are also consumers. During the week, I have a PDA. I have a Bluetooth ear bud. I can carry that PDA in my briefcase and do voice dialing, without wearing it on my hip. At the same time, when I'm at the airport, I can pull out the PDA and get more robust information off the web. I can log onto the enterprise and do those kind of applications. Then, when it comes to the weekend, and I don't want to carry the PDA without my briefcase, I take out a clamshell phone, without the faster processor on the PDA. I can get the information on the device, but it's small enough to put in my pocket. Users, more and more, will be having multiple devices. Not one single device.
Q: What devices will Cingular be looking at in the next 6 months to a year?
A: No announcements have been made yet. But in the next 6 months we'll be seeing the first color screens, and PDAs with GPS-enablement [global positioning system]. By end of year, there will be more color displays, and several PDA's variants GPS-enabled and PCMCIA cards, to go into enterprise. In the enterprise space, it's wonderful to have packet data and wonderful to have pocket device, but you need the security to make it comfortable with the wireless interface. We are not just looking at devices, but also at the back office systems for firewall protection or behind the firewall protection to make enterprises comfortable to extend applications from the wired environment to the wireless environment. That will all bear fruit by the end of year.
Q: With the recent joint venture with AT&T Wireless, when and how will Cingular start offering services on this network?
A: What this JV is is the ability to construct a network that is shared by two operators. It's more cost-effective than it would be possible to justify as a single operator. The focus of the JV is looking at interstate highways that are in remote parts of the country. Each would find it difficult to do it by ourselves. [buildouts covering] interstates and major highways will provide connectivity between major areas. Yet, we are still two unique companies with our own applications. At the retail level there will be no collaboration. We will finalize the agreement this year, and it will be operational next year. To the user, it looks like Cingular's network to a Cingular customer, an AT&T network to an AT&T customer.
Q: Cingular says its SMS [short messaging service] traffic increased 450% in the past 6 months. Which applications do you see as being big pushers of that? Will 3G cannibalize existing wireless data revenues?
A: I think on the applications driving it — ringtone download has been huge. Fundamental messaging has picked up significantly. We also offer proactive alerts (like for stock quotes). A lot of alert traffic has begun to pick up, and that will continue to increase exponentially. We are compared to Europe for the amount of SMS traffic.
But people don't peel back the onion. In Europe, SMS has been a part of the terminal for 5-7 years. From the outset, in Europe, the carriers are interconnected with each other. Users didn't have to know who the carrier was. That's what has to happen [in the United States] to be successful with SMS. In the United States, GSM has not been that large, but we've had the same philosophy. We've connected with VoiceStream. We've sent our messages to VoiceStream and them to us, and now to AT&T, for some time. The next big thing is the . operators interconnecting. That will make it transparent for the customers. Who serves the customer is unimportant. Two-way messaging in the devices is no more than a year and half old. But we do not have anywhere near the devices. Those two things, more handsets with two-way messaging capabilities, and knocking down the boundaries will fuel growth.
Now for the second question: Will packet data cannibalize SMS? There will be some cannibalization. Growth — that will offset some migration. There are two pieces that will drive that: the adoption of e-mail in the wireless information. Then multimedia messaging services, which is short messaging with the attachment of, say, a video clip. Because of the attachment, that message will be sent over GPRS rather than SMS. That will be a powerful aspect of messaging over the course of two years.
