TALES OF CONTENTS
Introduction Cellular Networks and Access to Public Networks
Fundamental Concepts in Cellular Technology
Types of Cellular Network Access
Cellular Digital Packet Data (CDPD)
Competing Wireless Communications Technologies
Cellular Applications and Business Processes
Growth Phase and Life Cycle of Cellular Technology
Financial Models for Evaluating Costs and Benefits of Cellular Communication
Improved Quality, Improved Profitability
Choosing the Best Cellular Data Transport Method
Hardware and Software Requirements
Strengths, Weaknesses, Opportunities and Threats (SWOT)
Conclusion
Introduction
Today's rapidly changing business environment is creating intense competition among corporations. Markets are changing faster now than in any other time in history. Product life cycles are shortening and businesses must compete globally (Wheelwrite & Cl ark, 1992). Employees are required to spend more time with their external and internal customers in order to increase the competitiveness of their organizations. As a result, employees are often away from their phones. Approximately 48 Million employees spend over 20% of the workday away from their desks, and this number is likely to grow (DeBelina, 1995). Telecommunications analysts predict that the existing global wireless telecommunications market is expected to grow from 40 Billion dollars in 1993 t o 200 Billion by the year 2000 (Cauley, 1995). Today's market conditions therefore require that managers evaluate cellular technology as an alternative to traditional wireline telecommunications services to make their corporations more competitive. Since today's cellular network coverage reaches about 95% of the population (Gareiss, 1995), cellular service is a ubiquitous method of providing wireless service to employees on the move. Whether the employees are field engineers accessing databases, orderi ng products, and retrieving technical specifications or off site sales staff responding to customer inquiries, deploying cellular technology will increase an organization's responsiveness making it more competitive.
This research paper describes cellular technology, competing technologies, applications, life cycle phases, cost considerations, hardware and software requirements, strengths, weaknesses, opportunities, and threats (SWOT) found in cellular technology. T hroughout the paper, the author will make recommendations on how to incorporate cellular technology in their organizations.
Cellular Networks and Access to Public Networks
Cellular networks consist of cellular base stations, mobile telephone switching offices (MTSO), and mobile communication devices. Each base station contains a radio transceiver and controller and provides radio communication to the mobile units located in its cell. The cells are arranged in a honeycomb pattern in order to provide local, regional, or national cellular coverage. The MTSO links calls together using traditional copper, fiber optic, or microwave technology and acts as a central office excha nge allowing users to place a call on the local and long distance public telephone systems. It also allows mobile communication devices in the cell to dial out and alerts devices in the cell of incoming calls. The MTSO continuously monitors the quality of the communications signal and transfers the call to another base station which is better suited to provide communication to the mobile device.
The mobile communication devices consist of hand held phones, car phones, notebook computers, personal digital assistants, pen-based computers, palm-top computers, and portable data collection devices. Since only two percent of the cellular traffic is d ata, the most popular mobile units are cellular telephones (Gareiss, 1995). When these mobile units communicate to the network, they must register with the system by subscribing to a carrier service. Most carrier services have arrangements with other pr oviders allowing users to roam. Roaming occurs when the mobile unit is outside the coverage of their cellular service provider and an alternative cellular provider places the call.
Cellular technology extends the bounds of a corporation's existing telecommunications infrastructure by connecting mobile units to the public network operated by the local exchange or long distance carriers. The cellular users have special features an d functions specific to cellular customers but they can also use the features and functions of the public phone systems. This allows cellular technology to be flexible enough to take advantage of features and functions of almost any public or private net work.
Fundamental Concepts in Cellular Technology
The radio spectrum contains many bands that are allocated and used for commercial, personal, and military applications. Fifty (50) MHz of spectrum allocated to cellular networks exists in the 824-849 MHz and the 869-894 MHz bands (Pagett, 1995). These bands are then further subdivided into 832 channels allowing many users in the same area to simultaneously access the network (DeBelina, 1995).
Types of Cellular Network Access
The types of network access in the United States are advanced mobile phone systems (AMPS), time division multiple access (TDMA), and code division multiple access (CDMA). AMPS is the cellular standard that has been extensively deployed in North America and has been commercially available since 1983 (Khan & Kilpatrick, 1995). The current cellular standard describing access methods to the network is IS-553 and divides 50 MHz of spectrum into 832 frequency channels, each 30 KHz wide (Amin, 1995; Pagett, 1 995; Pagett, Gunther, & Hattori, 1995). Organizations such as the Portable Computer and Communications Association (PCCA) consist of modem manufacturers, computer manufactures, and service providers work together in defining the IS-553 interoperability s tandard (Khan & Kilpatrick, 1995).
Time Division Multiple Access (TDMA) is a digital access method that allocates time slots to different users allowing them to share similar radio frequency channels. TDMA divides each frequency channel into six time slots and allocates two slots to each user increasing the network capacity by 300% (Pagett et al., 1995). Standard IS-54 describes a dual mode network access method allowing mobile units the choice of using TDMA or AMPS operation (Amin, 1995; Honig & Madhow, 1990; Khan & Kilpatrick, 1995; Tawfik, 1993; Sasaoka, 1993; Williams & Ong, 1995).
Code Division Multiple Access (CDMA) sends multiple messages over a wide frequency channel that is decoded at the receiving end. Each mobile unit in a cell is assigned a different spreading sequence and allows multiple users to share the same frequency spectrum improving network capacity over the AMPS systems by a factor of ten (DeBelina, 1995; Pagett et al., 1995; Pagett, 1995). The details for CDMA network access are referenced in standard IS-95 which describes the mobile unit's access to the cellula r network (Honig & Madhow, 1990; Khan & Kilpatrick, 1995; Sasaoka, 1993; Williams & Ong, 1995).
Although TDMA and CDMA digital access methods are just starting to be deployed in the United States (Tawfik, 1993), this author believes these access methods will become widely deployed because of their superior performance characteristics. These networ ks have a higher capacity, improved voice quality, encryption for communication privacy, and integration with digital terrestrial networks (Padgett, Gunther, & Hattori, 1995). Digital access has its advantages, but it does not have the ubiquitous access that AMPS systems have (Amin, 1995). Therefore, to take advantage of the widely available coverage of today's cellular services, portable units need to be compatible with the analog AMPS systems.
Cellular Digital Packet Data (CDPD)
Cellular Digital Packet Data (CDPD) is a technology standard sponsored by the regional bell operating companies and McCaw Cellular. CDPD was introduced by IBM, overlays packet switching onto the existing cellular voice network, and transmits data packet s over the idle capacity. This packet overlay is based on transmission control protocol/internet protocol (TCP/IP) and does not need the call setup procedures required for switched voice calls. This makes CDPD ideal for short bursty message applications such as point-of-sale (POS) credit card verification, vehicle dispatch, package tracking and e-mail (Gareiss, 1995). Although this complex overlay generally increases the network utilization, excessive data traffic may cause interference with existing cellular calls (Lee, 1993). Therefore, managers should examine the traffic of voice and data users in a particular service area before designing applications that put a large load on the network.
Competing Wireless Communications Technologies
The advancement of radio technology has resulted in the development and deployment of many forms of wireless communication systems. The most formidable competitors of cellular communications are personal communications systems (PCS), cordless telephones , paging, specialized mobile radio (SMR) and satellite communication (Perry, 1993).
PCS is a wireless communications network which operates at a radio frequency of 1850-1990 MHz and has a greater capacity for carrying voice and data traffic. Currently, a cellular mobile unit's throughput peaks at 14.4 K bps (Gareiss, 1995) where curren t PCS systems using the personal access communications services (PACS) standard have channel throughput of 384 K bps with an upside potential of 25 M bps (Raychaudguri, 1995). PCS allows greater data throughput over the air links whereas the existing cel lular infrastructure is insufficient to carry the growth of bandwidth intensive applications (Colmenares, 1994; Tang & Sobol, 1995; Kobb, 1993). Therefore, PCS is well positioned to handle the bandwidth intensive applications of the future.
PCS will be less expensive than cellular communication because of government regulation promoting and increasing competition (Bernier, 1995). Government regulators will effect competition by assigning each major trading area (MTA) with five PCS provider s compared to the traditional two cellular providers in each MTA. Additionally, cellular providers will not be permitted to provide PCS service in areas where they provide cellular service (Novak, 1995). Some members of congress are trying to remove the restrictions that prevent cellular carriers from owning and operating PCS networks in areas they provide cellular service because they believe these restrictions "will impede the development of PCS." (Congressional Record, 1993). This author believes PC S will capture the growth of new subscribers and cut into the imbedded base of cellular subscribers because of the PCS networks' (PCN) cost and performance advantages over cellular networks.
Another competing wireless technology is cordless telephony which provides wireless communications between a handset and a base station connected to the public phone system. The main differences between cellular and cordless technologies are the single cell architecture of cordless and the fact that the two systems operate at different frequencies. Although cordless telephones are inexpensive, they are not as suited to business applications as cellular telephones because of the cordless telephones' lim ited range and their lack of privacy. There are however, handsets on the market that have dual mode (cordless and cellular) operation that may be used in business situations to take advantage of both technologies. (Pagett, 1995; Pagett et al., 1995).
Paging is a wireless communication technology that provides an inexpensive one way transmission of alpha numeric and full text data. It is a viable alternative to cellular specifically when data needs to be transmitted in one direction, to the mobile us ers. [Since this paper was written, companies, such as SkyPage and MCI, have introduced two-way paging services.] For two-way real time, communication, users need to have access to some form of service such as common business phone lines or cellular phones. There are many mobile users who use both paging and cellular with cellular allowing the mobile user to c all back and respond to the page. When used properly, paging may provide similar results as cellular when users are in paging range and have access to communications resources. The major difference between paging and cellular is that cellular provides tw o way direct communication while paging provides one way direct communication.
Specialized Mobile Radio (SMR) is a wireless communication technology that operates in the 800 Mhz range and was designed for integrating voice and data over the same wireless network. SMR supports voice dispatch, wireless phone, voice mail, and data tr ansmission applications. It is capable of transmitting data at 4.8 K bps with the ability of going up to 64 K bps in certain metropolitan areas. SMR does have some limitations for business applications because it does not have wide coverage, deep in-bui lding penetration coverage, is available in only a few metropolitan areas, and is limited in its ability to interoperate with other networks.
Satellite communication provides wireless communication with base stations in orbit around the earth. This technology is very expensive and has high network and handset costs. There are many vendors such as GTE Airfone, TRW, Motorola, and GlobalStar, w ho are developing satellite communication systems that can be accessed from almost anywhere in the world. One example is Globalstar which will have a global, wireless, low-earth-orbit, satellite-based telephone system operational by 1998 (Loral Annual Re port, 1995).
A new technology called software defined radio allows users to redefine the operation of a mobile unit to allow interoperability with any of the aforementioned communications technologies (Mitola, 1995). It is this author's belief that once software def ined radios are commercially available and cost competitive, portable units will be able to seamlessly interoperate with many other networks. If there are different network technologies in a specific geographical area, the handsets will be programmed to s elect the least expensive, most private, or highest bandwidth service. For example, a user's handset will operate in cordless mode when at home or in the office, in PCS mode when in PCS capable cells, in cellular mode when driving regionally, and in sate llite mode when traveling internationally or in remote areas.
Cellular Applications and Business Processes
Since business needs determine communication needs, cellular applications vary from business to business. Managers must evaluate how alternative forms of communications may be used to improve productivity, lower cost structure, and improve communications between functions and between companies.
Cellular product offerings have many features, functions, and prices which make cellular technology ideal for many business applications. For less than sixty dollars a month, users can take advantage of the "anywhere-anytime" capabilities of cellular se rvice. Cellular providers also have a variety of local, regional or national coverage plans that may be tailored to a specific set of business requirements. Cellular companies are designing products that fulfill a special set of application requirements for different industries. This is know as vertical applications. For example, the Motorola Corporation, one of the largest cellular equipment providers, creates products for field service and logistics, corporate application extensions, mobile offices, and personal communications (DeBelina, 1995). There are numerous other uses for cellular equipment in the public, private and business sectors. Professionals such as reporters, lawyers, real estate and sales professionals, portfolio managers and even fa rmers are using cellular equipment to relay information where time is of the essence (Donovan, 1995a; Mehta, 1995; Mello, 1995). Airlines, train services, livery services and other transportation organizations are also using cellular communication to im prove the quality of their services (Mason, 1995). Additionally, the military, the police, and emergency medical services are using cellular communications to improve operations in life threatening situations (e.g., Mello, 1995; Donovan, 1995b; Mehta, 19 95; Bernstein, 1995). The use of cellular communications can save time, cut costs, improve service, and allow for convenience and mobility. Therefore, managers must evaluate its use in their organizations, familiarize themselves with vertical applicatio ns designed for their industries, and know how their competitors are using the technology to gain a competitive advantage.
Growth Phase and Life Cycle of Cellular Technology
This author believes that the cellular industry is in its growth phase. Michael Porter (1980) explains that products go through the introduction, growth, maturity, and decline phases of their product life cycle. Some characteristics of the growth phase of Porter's life cycle model are large growth in use, widening of the buyer group, improved reliability and competitive product improvements, increased advertising, increased channels of distribution, and high profit margins. These characteristics are a ll occurring in the cellular industry. Currently, there are 26 million cellular customers growing at a rate of approximately one million new customers every month (Amin, 1995). There is a widening buyer growth that is extending into vertical markets suc h as service, logistics, and home office (DeBelina, 1995). System reliability has improved greatly providing high quality services to cellular users (Pagett, et al., 1995). There are many competitive product improvements such as digital technology advanc ements, voicemail, call forwarding, encryption, and enhanced battery life (Lee, 1993). There is a great deal of advertising for cellular products on television, radio, print, and on the Internet. Alternate channels of distribution for cellular phones an d services are also becoming popular. For example, retail office supply, electronic, and computer chains are actively marketing cellular phones and services. Additionally, cellular services have high profit margins.
This author hypothesizes that the cellular growth phase will last another two years because industry analysts predict that it will take that long for PCS services to be operational (e.g., Thyfault, 1995). PCS will capture most new users and cut into the cellular market because PCS has price performance advantages over cellular technology. PCS will offer higher bandwidth communication and more features at lower prices (e.g., Nadik, 1995; Perry, 1993; Raychaudhuri, 1995; Raychaudhuri & Newman, 1992). Al though this author believes PCS will enter the growth phase when cellular enters the maturity phase, many telecommunications analysts believe the two will seamlessly interoperate with one and other's equipment (e.g., Nadik, 1995; Cheung, Beach, & McGeehan , 1994). Cellular network providers are even buying PCS licenses to increase their "footprint" indicating that a PCS/cellular service is part of cellular providers' strategies (Amin, 1995). For example, 18 different companies spent over 7 Billion dollar s for PCS licenses (Dale, 1995). The largest winners of the PCS auctions were cellular companies such as NYNEX, Bell Atlantic, and McCaw, who increased their service area to create new forms of revenue.
Financial Models for Evaluating Costs and Benefits of Cellular
Communication
Financial models are often used when evaluating the use of a technology within an organization. Financial models quantify benefits and costs in terms of dollars providing a metric that justifies moving forward with projects. There are many cellular app lications that vary from business to business. Although it is relatively easy to quantify the cost for cellular communication knowing traffic statistics, it is very difficult to make categorical assumptions that will quantify benefits achieved with this technology. Tangible benefits such as cost savings and increased productivity may be realized. Intangible benefits include more timely information, improved resource control, increased job satisfaction, improved operations, higher client satisfaction, a nd better corporate image (Laudon & Laudon, 1994). This author believes that higher client satisfaction is one of the most formidable benefits of cellular communication because it relates to the quality of a company's' products and services which directl y effects profitability.
Improved Quality, Improved Profitability
Buzzel and Gale (1987) have used the Profit Impact of Marketing Strategy (PIMS) database to provide strong evidence that product performance and profitability are strongly related. The PIMS database has information regarding 450 companies and 3000 busin ess units and has been used to explore the general relationship between marketing strategy and performance. The database takes into account variables such as market conditions, competitive position, profitability, and operating performance to uncover str ong linkages among various marketing strategies, profits, and market share. The PIMS database has been used to confirm quality philosophies of the twentieth century (e.g., Garvin, 1988; Deming, 1989; Crosby, 1979; Taguchi & Clausing, 1990). Data analyse s show strong linkages between the quality of a product and service and business success. Therefore, if cellular communication improves the quality of a product or service, the costs will usually be outweighed by its benefits.
Choosing the Best Cellular Data Transport Method
Managers should be aware that cellular technology allows two different methods of transmitting data over air links. A user may transmit data using CDPD or switched cellular. CDPD is a packet overlay on the existing cellular network that needs no call s etup or tear down. This allows users to transmit data packets that are routed to their destinations. Switched cellular uses the network the same way a voice call would except data is transmitted and received over the switched, dial-up connection.
Figure 1 is a cost analysis of the two methods of data transport. The amount of data to transmit is on the x-axis and the cost of the transmission is on the y-axis. This particular analysis assumes that the switched call has a ten second setup time, a forty cents per minute charge, transmitts data at 9600 bits/second, and has a one minute minimum charge. The CDPD assumes nineteen cents per Kbyte usage charge. According to this data analysis, files greater than 2 Kbytes sho uld be sent over cellular switched communication. As a rule, CDPD should be used for data transmissions of fewer than 5 Kbytes of data and switched cellular for applications transmitting more than 5 Kbytes (Gareiss, 1995a). It is important for managers d eploying cellular communications to be aware of this relationship and to select the technology best suited for the applications. Managers should also be aware that there are a variety of wireless middleware software packages that examine the type of data that will be transmitted and will select the least cost method of data transport (Johnson, 1995). Managers should also keep current with price fluctuations of cellular service and take advantage of decreases in rates.
Hardware and Software Requirements
Cellular telephone equipment consists of the cellular phone itself and a variety of voice and data accessories. Before purchasing cellular equipment, managers should insure that the phone and accessories satisfy all their applications' requirements. De pending on these applications, users may choose from accessories such as replaceable battery packs, portable chargers, headsets, encryption hardware, fax/data jacks, cellular modems, and credit card authorization unit interfaces. All of these items may h elp users become more productive with their cellular equipment.
Features such as displaying power, roam, and no service, operating in a hands free mode, dialing alternatives, and tone generation are available to cellular users. Of these features, managers must ensure that all critical applications requirements are m et with the technology deployed. For example, if the use of voice mail is critical, users need tone generation to issue commands. With hands free operation, users can use the technology safely while driving or operating machinery.
Voice applications do not require end-user software because the handset operating systems are "burned" into the firmware of the unit. The software requirements for cellular communication are mostly associated with cellular data. The Open Systems Interc onnect (OSI) is a model for defining how different computers can communicate with one and other. The model consists of seven layers with each layer accomplishing a specific task (Laudon & Laudon, 1994; Spohn, 1993). The software required for wireless da ta applications mostly consist of wireless middleware that links the upper layers of the OSI model (application, presentation) with the lower layers (data link, physical) and allows two computers to communicate.
Strengths, Weaknesses, Opportunities and Threats (SWOT)
The strengths of cellular communication include wide coverage, small mobile units, low cost, high functionality, and the ability to integrate voice and data on the same network. Wide coverage allows mobile users to communicate and to manage their busine ss from almost anywhere in the United States. A major capability that allows this mobility is the fact that cellular coverage encompasses over ninety-five percent of the United States population (Gariess, 1995b). Small mobile units may fit into a pocket or pocketbook and can be taken almost anywhere. Service costs may be as low as thirty dollars per month and average below one hundred dollars per month which is a small cost when considering the tangible and non-tangible benefits an organization may rec eive. High functionality gives users access to many applications such as using mobile units safely while driving, retrieving their voice mail and electronic mail, logging onto a remote mainframe, or even using point-of-sale devices. Although there are o ther technologies that may achieve these goals, cellular is the only technology with these features that are readily available and cost effective today. For example, PCS promises to offer similar services as cellular, but nationwide networks will not be operational and widely deployed until late 1996 (Thyfault, 1995). Satellite networks also offer this capability, but many of the networks will not be deployed until 1998.
Weaknesses include cellular fraud, limited bandwidth, and health concerns. There are predominantly three types of fraud in the cellular industry today. They are user subscription fraud, stolen phones, and access fraud (Arcuri, 1995). The most popular of these is access fraud or "cloning" which occurs when a criminal uses a scanner and records the Mobile Identification Number (MIN) and Electronic Serial Number (ESN) of a valid users. This captured MIN/ESN combination is programmed into an illegal phon e which is used fraudulently. The fraudulent calls are then billed to the MIN of the authorized customer (Telecommunications Fraud, 1994; Abernathy, 1991). Cloning is primarily a weakness of the AMPS analog networks because the equipment used to commit fraud is readily available to the public.
It is estimated that cellular fraud costs the industry 1.3 million dollars per day (Tanzillo, 1995). To combat fraud, cellular providers are using a variety of preventative measures such as personal identification numbers (PIN), voice recognition, and r adio frequency finger printing (Arcuri, 1995). Of these preventative measures, the most popular is the use of PIN numbers, but PIN numbers are easily compromised during the cloning process. Industry analysts believe the majority of cellular fraud will be eliminated when digital technology is widely deployed because digital cellular is much more difficult to clone (Amin, 1995; Padgett, 1995; Padgett, Gunther, & Hattori, 1995). Criminals can not use inexpensive scanners to clone digital cellular phones and will need sophisticated equipment to commit fraud.
Humans are exposed to many forms of electromagnetic radiation when they use items such as electric blankets, televisions, terminals, and copy machines (Perry, 1995). Since cellular telephones emit electromagnetic radiation, there is concern about its ef fect on humans. Cellular systems were originally designed for cars that have the radiating antenna outside the car. Technological advances have integrated the phone and the radio frequency (RF) hardware into one portable handheld device. There is a hei ghtened concern about RF radiation because the transmitting antenna is only a few inches away from the user's head. Presently, there is no statistically significant evidence that indicated the use of cellular equipment adversely affects the health of its users. A panel of scientists from the Environmental Protection Agency, the Food and Drug Administration, the National Cancer Institute, and the Federal Communications Commission reported to a House Energy and Commerce Subcommittee in February 1993 that there is no evidence that cellular transmissions cause brain cancer (Congressional Record, 1993).
Although there is no concrete evidence that the use of cellular technology is damaging to the users' health, this author believes that managers should prudently avoid the risk of problems by adhering to the following recommendations:
Provide special arrangements for users who may be more susceptible to harm such as pregnant women, infants, and small children.
Configure the users' operation to keep the transmitting antenna as far away from the head as possible.
Purchase low-power systems.
Advise employees to turn off systems when not in use.
The opportunities in using cellular technology are extending the bound of a corporation's network infrastructure to include mobile users that may be roaming locally, regionally or nationally. The application of cellular technology to business processes m ay make an organization more productive to improve response times for responding to problems and requests. This may improve the quality of a service organization by improving dimensions of quality that the customers' find important. Therefore, cellular technology presents the opportunity of using wireless technology to make a corporation more responsive to customer needs and becoming more competitive.
PCS technology will eventually be more desirable than cellular technology because it will be less expensive and have more features. Therefore, there is a threat of investing and relying too much on cellular technology if the applications can not eventua lly be migrated to PCS platforms. Managers should not have their organization invest a large sum of money in cellular technology with the intent of it being a long term investment. Managers should invest in the technology wisely and be prepared to migra te to newer forms of wireless technology.
Conclusion
Cellular communication technology gives corporations the ability to extend the bounds of a their communications infrastructure to mobile-untethered users. Many corporations can and are translating this mobility to a competitive advantage by enhancing in ter and intra-company communication. Competitive advantages may be achieved in many ways including improving the quality of a company's products or services, improving the relationship between a firm and its stakeholders (Note 1), increasing productivity , and lowering costs (e.g., Freeman, 1984; Keen, 1986; Porter, 1980). This research paper described cellular technology, competing technologies, cellular applications, life cycle phases, cost considerations, hardware and software requirements, strengths, weaknesses, opportunities, and threats found in cellular technology. It also makes recommendations on how to incorporate cellular technology into organizations. Managers should use information presented in this paper as a guideline to help make decisio ns relating to cellular communication.
The opportunities for further research in the field of cellular technology include quantifying how the technology improves productivity in organizations, developing migration strategies to PCS platforms, and integrating the technology into the existing d ata network infrastructure.
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