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Special report: market studies conclude cellular favorably is positioned to cash in on wireless data




Cellular network providers stand in excellent shape to capitalize on the emerging mobile data market, concluded three recently released mobile data market reports. The reports predict cellular will play a large role in mobile data's future expansion.

Research conducted by BIS Strategic Decisions indicates: "Within the cellular market alone, data will account for between 5 percent and 10 percent of the cellular business by the year 2000. This represents over $1 billion in service revenue for just one sector."

Economic and Management Consultants International Inc. (EMCI) "projects cellular industry service revenues from mobile data to be $720 million by 1997" and believes "in the future, packet data solutions will permit cellular to compete more directly with dedicated mobile data providers."

A study by International Data Corp. (IDC) found "56 percent of users across all industry sectors are planning to implement some type of wireless data networking application. These users today are leaning toward using a cellular network rather than other wireless WANs [wide area networks]."

...BIS: Cooperation Is Needed for Mobile Data To Flourish

"Mobile data is in its infancy," said Gail Kirby, BIS senior consultant. "However, cooperation is required for it to grow up and realize its potential. Network operators, systems integrators, application developers and terminal equipment manufacturers must work together to design and implement a total system solution," Kirby said. "As with any emerging technology, the key is to focus on the requirements of the customer."

Cellular likely will play an important role in the data communications scene, and many key factors support this conclusion, said Gustave Barth, a Paris-based telecommunications consultant who chaired a recent BIS "Wireless Information Networks Conference."

The factors include:

* New packet data operators will not offer voice, and many mobile

professionals -- especially those in sales and management -- need voice.

* Fax, which can be offered using laptops to send fax via cellular,

cannot, at least for some time, be offered by other mobile operators.

* Cellular operators "have the clout to push the data business."

* Cellular rates will lower and become closer to those offered by the

public switched telephone network.

* Cellular operators have contact with their customer base -- the broadest

mobile customer base -- and therefore likely can market communications

end-user equipment in a packaged form.

...Users Have High System Demands

Users from a cross section of industry sectors -- security, manufacturing, public utilities and field service -- discussed their data implementation experiences during the BIS conference. "These case studies clearly indicated some of the more important needs of users," Barth said.

"Many have high system demands, including a requirement for local and national coverage; and most need constant service availability, full-duplex communications, foolproof security for data and rapid data transmission to facilitate real-time information. Many also required the terminal to be highly portable, have a long battery life and be robust while easy to use," he said.

...EMCI: Mobile Data Will Reach 9.6 Million Subscribers by 1997

The two-way mobile data market will reach 9.6 million subscribers and could generate as much as $2 billion in service revenues by 1997, projected EMCI in "The U.S. Mobile Data Marketplace: 1993." EMCI based its study conclusions on interviews with telecom managers who are likely candidates for mobile data use and on interviews with mobile data service providers, manufacturers, software developers and systems integrators.

Portable facsimile and laptop computing mobile data capabilities already are being used by approximately 500,000 subscribers, according to EMCI research. Additionally, 9 percent of cellular users indicated an interest in receiving data, and 18 percent of cellular users indicated an interest in sending data through a laptop or fax machine. Based on these findings and others, EMCI concluded cellular is well-positioned to make immediate gains in mobile data revenues. Cellular is able to offer both voice and data and promises a low-cost marginal data solution for existing voice subscribers.

EMCI predicted that cellular, when compared to other existing networks able to Provide mobile data, would capture the biggest mobile data revenue chunk. EMCI estimated specialized mobile radio/private radio, dedicated mobile data networks and satellite networks would capture $500 million, $600 million and $300 million in revenues by 1997, respectively. High potential mobile data demand segments will be trucking and warehousing (19.3%), wholesale and retail trade (13%) and insurance (10.3%).

In its research, EMCI discovered many potential user desires that could affect mobile data providers' market strategies, including: Cost is a major purchasing barrier for many potentials users; users' desire proven, application-specific software that uses present mobile communications technology; and users desire a simple-to-use product, which may require service providers to design innovative products (such as pen-based systems) or training support for equipment and service sales.

Additionally, EMCI found many potential users already employ some type of mobile technology and concluded: "Firms able to provide solutions which leverage existing mobile terminal investments will find a ready market."

...IDC: Data Market Will Grow Through Shared Access, Standardized Modems

In "Opportunities for Mobile Data Networks," IDC identifies potential applications for wireless data networks. IDC profiles companies and applications well-suited for mobile data technology. The study covers topics ranging from end-user requirements to vendor strategies and profiles,

IDC believes the mobile data market will be stimulated by:

* the increased use of notebook and pen-based computers;

* the availability of nationwide mobile data networks offering

shared access to corporations;

* manufacturer attempts to standardize radio modems;

* increasing interest in new intelligent terminal interface

technologies, such as pen-based computing; and

* cellular and specialized mobile radio (SMR) operators' desire to

find a means to justify the cost of converting their networks to

digital by attracting new markets.

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