What's the key to making location-based services work, and work well? We really think avoiding latency is one of...
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the most important characteristics for being able to make productive use of handset applications. Our network is based on iDEN, and iDEN delivers up to 20 Kbps. But we realize there are some solutions that need more bandwidth, so we're deploying a software upgrade that -- when we roll it out -- will enable us to do 70 to 80 Kbps. Essentially, it's our software that binds several channels together, and it will allow the network to look as if it has four times as much throughput available. And any application today will work without any changes. You're in the process of developing a "4G" wireless broadband technology in North Carolina. Can you tell me what the current status is? We're examining the characteristics of 4G technology that can deliver high throughput, 2 to 3 Mbps peak speeds. We're looking to predictably allocate pieces of bandwidth to users, have it run to scale, and have the low latency that we think is important. But the most important aspect is to build it at an economical cost. We're doing a market trial in Raleigh, N.C., to determine how users will utilize it and learn what they find valuable. What kinds of users will this offering be geared toward? We've made it available to all our sales channels -- individual users and small and large businesses. In our trial, we had all of the above, including students. As we've opened it up further, we're getting a broad cross section purchasing the service. There are personal services and business services. We've created a set of packaged services that range from $30 to $80 per month. How do you feel your service compares to Verizon's EV-DO wireless broadband service? There's no comparison. With latency, we're talking about 30 to 50 milliseconds, compared to 300 to 500 milliseconds for EV-DO. That kind of latency is a problem for certain kinds of apps. Two, EV-DO tends to have a asymmetrical problem; you can only get 300 to 400 Kbps on the downlink, it may only be 60 or 70 Kbps on the uplink. With Nextel, you're talking about 700 Kbps to 1.5 Mbps on the downlink, and 300 Kbps on the uplink. Do you feel like you're competing against other wireless broadband offerings, or against the wired broadband market? We don't look at it as a competitive response. It's an opportunity to change the way people think about wireless. If you can provide a 1.5 Mbps uplink, what new things can you do with it? We're not saying because we can deliver wireless broadband that you can drop your DSL, but we're looking for new ways to deploy differentiated technologies that let customers do things that are unique. When will your 4G service be expanded nationally? We haven't made a decision on a nationwide rollout, but we will let you know.
Are you afraid that push-to-talk services will eventually become a commoditized service offered by all wireless carriers?
I'm paid to be afraid, but I'll tell you that with all the hype that's gone on and all the different things that are out there, [the market] is kind of fractured and crazy right now. There are folks working on push-to-talk-over-cellular technology and they can't figure out how to standardize, and so they're waiting on which technology will win out on the CDMA side. Meanwhile, the GSM guys are looking at adding push-to-talk to their data services, which just don't perform well and are inefficient. Even if they could get the latency down anywhere close to ours, the services turn out to be very uneconomical to deliver. It's going to take quite a few years to sort all that out before that hypothesis becomes a reality. Nextel seems to be focusing a great deal of attention on location-based services. What technology makes those offerings work?
To do things like real-time navigation from a handset, you have to be able to do a couple things. First, you have to quickly establish the location of the handset. Next, you have to export that location to the application in the phone and be able to deliver it quickly. Plus the network needs to know about that and return that info. to the handset quickly. If you can do all that quickly, you can implement an application like our real-time navigation system and turn-by-turn directions.
Besides your push-to-talk service, what other enterprise-focused products and services does Nextel offer?
A year ago, we launched a wireless business solutions program, which features four elements: our data network, applications that run on it and meet business needs, a set of tools that allows enterprises to manage wireless application deployments and comprehensive support services that include sales support and post-implementation support.
On the network side, we have had a packet data network for over four years. We were the first to offer true IP connectivity, and Java-based handsets that realistically support business applications, as well as real-time location services and direct access to IP-based resources on the Internet. What kinds of location-based applications do you offer?
We have almost 20 applications today that are location based, and many support real-time navigation. You can turn the phone on, and it will give you directions from where you are to where you want to go. It can even direct you verbally. We are the only company that can do that today, because of the network we have and the handsets we've deployed. Companies like Avaya Inc. are working with mobile handset makers to develop phones that work over Wi-Fi networks using VoIP, as well as on your network when out of range of a WLAN. Do you see that model being a part of Nextel's future?
When you talk to business customers, they say it's great idea, and that they've got an investment in an 802.11 solution. But when you start talking to them about running voice over that, and making sure you have a high quality of service, it becomes a huge issue. Most of the 802.11 networks on business campuses are built for data, not voice, and there's a difference. We think the extension of 802.11 and 802.16 has an interesting future, and we're not shy about testing and understanding new technologies, so we're looking at all of those things going forward. It's been almost six months since the first wireless local number portability regulations went into effect. Has wireless LNP been good for your business and the industry as a whole?
There's a lot of hype around that, and it's turned out to be not as big of an issue as the industry felt it would be. There were logistical challenges, but we've done a good job of preparing. We've had the fewest number of complaints as we rolled it out, now we're marching to this next deadline. [Editor's note: On May 24, wireless local number portability rules take effect beyond the top 100 U.S. markets.] It's one thing for the top six or seven carriers to make the process work, but now it's being extended it to smaller carriers across the country. It'll be another challenge, but we're prepared for it.