Until recently, mobile radio was to wireless communications what the Yugo was to transportation. With a mixed clientele ranging from truckers using CBs to police armed with walkie-talkies to taxi drivers dispatched by radio, it was viewed as an unglamorous business and a technological backwater.
But specialized mobile radio, as it is known, has been rediscovered. It is now considered one of the biggest prizes in the all-out war for the public airwaves. The reason: high-tech companies have figured out how to profitably rebuild the antiquated dispatching system into an advanced cellular-telephone network that can take on the likes of AT & T and the giant Baby Bells. Upstart Nextel Communications sent shock waves through the industry last week when it agreed to buy Motorola’s SMR frequencies for $1.8 billion.
That could pose a serious threat to cellular hegemony. Although both systems are based on the same basic technology, SMR systems are digital and cover almost 25 times as much area as the average cellular network. SMR handsets won’t work on cellular systems and tend to be bulkier than cellular phones, though they provide more features, like a digital pager service. And while cellular growth has tripled to some 13 million subscribers since 2000, the technology has been losing ground. It is running out of channel capacity so fast, in fact, that 40% of cellular calls in high-density areas like Manhattan and Los Angeles fail to be completed. SMRs have capacity to spare, and service could eventually be priced 10% to 15% less than cellular. Dispatchers predict they will have at least 10 million subscribers by the end of the decade. There are now about 1.5 million users of SMRs.
The addition of another contender to an already crowded field of telephone systems will surely multiply the confusion. By the year 2010, consumers will be able to choose from at least half a dozen vendors of a dizzying array of wireless-communications services, including pagers, voice mail answering machines and cellular phones. Phone and cable television operators, such as Bell South, MCI and Cox Enterprises, are developing so-called personal communications networks, or PCNs, a highly advanced portable-phone system that is expected to cover a wider area, connect to a greater variety of services and be cheaper to operate than conventional cellular.
And many companies that have gambled on the wrong technological standards, and invested billions trying to develop the same markets, will undoubtedly lose a great deal of money before the shakeout is over. "The winners," says Nextel chairman Morgan O’Brien, "will be those who can make the choice for consumers easy." With all the anticipated confusion--mindful of the early years of personal computers--it is likely to be years before anyone calls the purchase of wireless products an "easy" choice.
SMR systems gain an edge over other services mostly by virtue of（）
A. its prohibitive retail prices
B. its operational convenience
C. its wider coverage areas
D. its small storage capacity