ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, October 3, 1996 TAG: 9610030051
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Rattling the mobile phone industry, AT&T Corp. on Wednesday threw its might behind a futuristic service that combines beepers, electronic mail and other features in a sleek black handset.
AT&T said it would roll out the wireless service in 40 of the nation's largest markets - covering more than 70 million people - and quickly expand the offer to nearly triple those potential customers.
The long-distance phone giant is not the first company to offer wireless customers a go-anywhere phone that eliminates the need for a separate pager or computer.
But as the first to go national, AT&T has intensified the competition to sate America's appetite for constant communication. Rivals also are racing to build nationwide wireless communications networks, but up to now have focused on individual markets.
``It's one of the first salvos in the competitive wars,'' said Mark Lowenstein, an industry analyst at The Yankee Group, a Boston-based consulting and research company.
``They did it from a pre-emptive standpoint - AT&T wanted to get out there in front of the market with a big blitz.''
Dubbed AT&T Digital PCS, for personal communication services, the new offering includes batteries that last up to 60 hours rather than the typical 12. Users can call anywhere outside their calling area for 60 cents a minute. Currently, calls can cost up to $1 a minute.
Service packages would start at $24.99 a month, lower than many cellular services. The all-in-one service would negate the need for a separate pager.
The new wireless phones are ``just as versatile as the phone on the desk in your office ... and in some cases more versatile,'' AT&T Chairman Robert Allen told a news conference.
But behind the mass-market hoopla, the all-in-one phone actually targets a relatively narrow segment of consumers. Users must buy a handset that costs from $150 to $250. That might deter customers content to pay for service contracts that throw in a cellular phone - usually for a token price - without all the extra gadgets. AT&T's long-lasting battery could cost up to $60 more.
Lowenstein said most cellular users ``are happy with what they have - they don't need every bell and whistle.''
Mary Agnes Wilderotter, AT&T's executive vice president of national operations, said that test marketing in Dallas showed that upper-income people bought the phones.
Moreover, the new AT&T service currently relies on existing technology - so-called analog systems - not the digital technology hailed as the wave of the future.
Digital technology translates signals into the language of computers, allowing voice, data, text and other information to be sent far more efficiently.
AT&T said that it should switch over to a digital network by 1998 as it expands to a national rollout of 80 percent of the country covering about 212 million people.
Analysts said consumers wouldn't know the difference between analog and digital and that AT&T's mere entrance into the ``personal communications'' market - backed by a marketing blitz that includes advertising and in-store promotions - was enough to shake things up.
For their part, competitors scoffed at the AT&T announcement, calling the phone giant a Johnny-come-lately trying to play the role of spoiler.
``I don't think the announcement marks a watershed for AT&T. The announcement marks a P.R. campaign,'' said Andrew Sukawaty, chief executive of Sprint PCS, a Kansas City, Mo.-based wireless communications partnership between Sprint and three cable companies, TCI, Cox Communications and Comcast Corp.
``They are trying to stop the entrance of the new players into the market. They are doing it with an existing system that has limitations.''
LENGTH: Medium: 74 linesby CNB