Spokane is turning into a test bed of competition for digital wireless communications as the latest in a string of national and regional service providers scurry to set up networks and establish customer bases here.


Five carriersAT&T Wireless, Sprint PCS, GTE Wireless Products & Services, AirTouch Cellular, and Nextelare providing digital wireless services here now. VoiceStream Wireless expects to join the fray by next spring, and US West says it also hopes to begin offering such services here next year.


Spokane-area consumers already are benefiting from the competition, which is occurring nationwide but is said to be particularly heated in Spokane and the Pacific Northwest. Industry representatives believe, however, that a shakeout is inevitable and that what happens in this region could be a precursor of national marketplace swings.


There will be a hierarchy established. We just plan on winning, says Mike Smith, Spokane-based district manager for Sprint PCS, which about two years ago made Spokane the national launching pad for its personal communications services (PCS) technology. Regarding the Spokane-area wireless market, he adds, Youre not going to have seven winners.


Natalee Roan, Sprint PCSs Kirkland, Wash.-based Northwest area marketing director, says, This is the most exciting market to be in. Its a microcosm of what the rest of the country will look like a year from now.


Companies such as Sprint are betting that all-digital PCS service will make conventional cellular service obsolete. PCS devices use higher frequencies on the radio spectrum than cell phones, and are touted as being capable of providing a clearer signal and of performing more functions, such as voice mail, caller identification, call waiting, three-way calling, and call forwarding.


Other companies, such as AirTouch, are using technologies here that allow them to offer both analog and digital service on the standard cellular frequency. They claim that arrangement gives them the call clarity, reliable connections, improved security, and multiple-function phone advantages of PCSplus added communication flexibility by providing customers with national coverage even if they travel outside a digital market.


Patti Finley, a Bellevue, Wash.-based spokeswoman for AirTouch, contends that PCS coverage still is limited compared with analog and digital cellular coverage. Customers arent so worried about technology. They are most interested in what features and services a digital wireless provider offers, she asserts.


AirTouch launched its digital service here about four months ago. The company claims its service encompasses more square mileage and includes more extensive recreational and water coverage in the Inland Northwest than that of its wireless competitors.



Tiffany market


Industry insiders say the Pacific Northwest is considered to be one of the nations Tiffany wireless markets, due largely to the sometimes heated duel staged during the 1980s and early 90s between cellular telephone pioneer Craig McCaws Cellular One (now AT&T Wireless) and the former US West cellular operation (now AirTouch). They were the first two Federal Communications Commission licensees in the region.


McCaw demanded extensive, reliable coverage in his own backyard, geographically speaking, and US West sought to match the aggressive build-out tower for tower, observers say. They say that the two incumbent wireless carriers resulting coverage advantage has challenged new competitors entering the market.


Sprint PCS, for example, spent hundreds of millions of dollars establishing launch coverage in Spokane, Coeur dAlene, Seattle, and Portland. Western Wireless Corp., of Issaquah, Wash., which owns VoiceStream Wireless, is spending in excess of $10 million on telecommunications infrastructure just in the Spokane, Coeur dAlene, and Sandpoint areas, says Gene Smart, that companys Spokane market manager. Due to concerns about pre-emptive advertising blitzes by competitors, he declines to say exactly when the company plans to launch its service here, except that it will be in the first quarter of 1999.


VoiceStream is one of the PCS carriers that is believed by industry insiders to be facing an uphill battle here, since its playing catch-up against national competitors with deep pockets that already have established local footholds. Smart seems confident, however, that the company will do well in the Inland Northwest.


Our growth is coming from brand new, first-time subscribers, not from (customers lured away from) competitors. What were trying to do is invite first-time users, he says. Nevertheless, he adds, We think that our features and the things we can do with our product are superior to our competitors.


One of the features that VoiceStream will be touting is the GSM (Global System for Mobile Communications) technology used in its phones. They accommodate plug-in Smart Cards, essentially the programmed brains of the phone, which eliminate the need for users to reprogram each phone they use and which offer international-communication advantages. Each of the carriers operating here, though, has some hot technology, system strength, product feature, or marketing strategy that it believes gives it a competitive edge in the marketplace.


Were just going to try to offer very competitive rate plans with excellent service, and hopefully well give our customers more than what theyre getting from our competitors. Thats basically our theme, Smart says.


Increasing competition already has prompted some carriers to reduce airtime rates to 10 cents a minute or less, which is down sharply from a year ago, and to begin offering certain services for free that used to cost extra, such as voice mail, three-way calling, and caller ID. They also have introduced other pricing incentives to attract customers, such as larger local calling areas, larger buckets of minutes, and reduced roaming charges.


While good for the consumer, that hasnt necessarily been healthy for all of the providers. Statistics show that the average wireless phone bill nationally has fallen to about $40 a month from about $130 at the turn of the decade. The good news for providers is that the lower charges mean PCS and cell phones now are within the affordability range of a much larger segment of the population. Theyre no longer being used solely by businesspeople or for business purposes, but rather are being used increasingly by soccer moms and teen-agers, wireless company representatives say.


They say the question of whether that expanded base will be enough to keep all of the service providers operations here profitable should be answered over the next couple of years.


US West, which was getting set recently to launch its US West Advanced PCS service in the Seattle area, is the latest company to confirm plans to offer PCS services here. However, a Seattle-based spokeswoman for US West couldnt say just when next year that Inland Northwest launch is expected to occur.


US West formerly had offered wireless service through an entity called U S West Cellular. About four and a half years ago, US West and AirTouch agreed to merge their domestic cellular properties, and in May 1996, US West Cellular began doing business under the AirTouch name. AirTouch completed the merger last spring.