THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 15, 1997 TAG: 9701150433
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 86 lines
Three more telecommunications companies on Tuesday plunked down millions of dollars to join the race to lure Hampton Roads customers to their planned wireless phone networks.
Long-distance giant Sprint Corp. and two lesser-known companies, Omnipoint Corp. of Arlington and Western Wireless Corp. of Issaquah, Wash., are the latest entries in a crowded field. They were high bidders in the Federal Communications Commission's latest auction of licenses for wireless phone services in Hampton Roads.
Sprint, Omnipoint and Western paid $4.7 million, $5 million and $5.8 million, respectively, for rights to 10-megahertz slices of the Hampton Roads airwaves. In the next several years, they will join six other companies battling for local mobile-phone customers.
The increase in wireless choices is part of a nationwide explosion in competition. Over the past 14 months, the FCC has raked in more than $20 billion from auctioning licenses for new wireless services. The agency took in $2.5 billion for 1,479 licenses that were sold in the round that concluded Tuesday.
At least three companies - Sprint, AT&T Corp. and NextWave Telecom Inc. - intend to use the licenses to build nationwide wireless networks. NextWave plans, in turn, to lease much of its network to MCI Communications Corp.
A consortium of phone companies operating as PrimeCo Personal Communications is developing another nationwide wireless network. There are dozens of smaller players in local and regional markets.
``The bottom line is the consumer wins from this competition,'' said Tom Murphy, a spokesman for Sprint. He pointed out that cellular and other wireless providers are slashing rates and expanding service options, even as the number of subscribers continues to rapidly increase. More than 40 million Americans carry mobile phones, up from only about 4 million in 1990.
In Hampton Roads, the competition has already grown more intense for the region's two cellular incumbents, GTE Mobilnet and 360 Communications Co. In November 1995, the PrimeCo consortium led by Bell Atlantic Corp. paid $33 million for a 30-megahertz slice of spectrum stretching from Virginia Beach to Roanoke. Last November, PrimeCo aggressively introduced its all-digital service.
AT&T will make the next major debut locally. In late 1995, it paid $33.7 million for a license serving the same territory as PrimeCo. AT&T plans to begin offering wireless service in Hampton Roads sometime this summer, said spokeswoman Laura Loop.
NextWave could be next in line after AT&T. Last May, it agreed to pay more than $135 million for essentially the same type of license won by AT&T and PrimeCo in Virginia. But the San Diego-based company's astronomical bidding for licenses all over the country strained its finances. Recent press reports, including a story in last Sunday's New York Times, raised questions about NextWave's ability to complete its building plan.
Another wild card is McLean-based Nextel Communications Inc. That company plans to convert a stodgy nationwide network of mobile-radio frequencies used largely by delivery trucks into a state-of-the-art wireless phone network.
Nextel said Tuesday that it has assembled a 50-city network for its digital service and that it will eliminate roaming charges for people who travel from one territory to another. It said it plans to offer the service in Hampton Roads by June.
Hampton Roads' newest entrants, Sprint, Omnipoint and Western Wireless, will, like PrimeCo, AT&T and NextWave, offer so-called personal communications services. These PCS systems are much like cellular, but operate on a different part of the radio spectrum.
Some major wireless players, such as AT&T and PrimeCo, plan to integrate their cellular and PCS systems into seamless nationwide networks and issue phones that will work in both modes. Sprint's Murphy said his company plans to use PCS only, however. He said that will make it easier for people to travel across regions, noting that in the auction round that ended Tuesday, Sprint also won PCS licenses for Richmond, Roanoke and several other Virginia metro areas.
One of Sprint's nationwide partners in the wireless phone venture is Atlanta-based Cox Communications Inc., Hampton Roads' dominant cable-TV provider. Sprint and Cox officials said the two companies are discussing Cox's potential involvement in the Hampton Roads wireless phone launch. Murphy said a launch date has not been set.
Omnipoint officials did not return phone calls Tuesday. But the company noted in a statement that it has licenses for wireless service in an uninterrupted stretch from Maine to Virginia, and in nine of the nation's 20 most populous metropolitan areas.
Western Wireless, which offers cellular service in 15 western states, also won licenses in several other Virginia metro areas, including Richmond and Roanoke, but said it is too early to say when it will enter Hapmton Roads.
``We're very happy with the auction results,'' said Ken Prussing, a Western spokesman. ``We found some great values in Virginia.''