Cingular/AT&T Wireless merger won't solve coverage problems, say analysts

Cingular Wireless hoped its acquisition of AT&T Wireless Services will speed up the deployment of high-speed data services and...

Cingular Wireless hoped its acquisition of AT&T Wireless Services will speed up the deployment of high-speed data services and improve coverage, but analysts and users have said the merged company will not be able to provide such service everywhere in the US.

Early business customers of AT&T Wireless's highest-speed data service, which the company rolled out nationwide last year, have reported problems accessing the service in both large and small metropolitan areas.

Cingular uses the same technology for its high-speed service, which it has deployed only in the Indianapolis regaion so far.

Stan Sigman, president and chief executive officer of Cingular Wireless, said the combined cellular provider, which would be the largest in the country, will "help accelerate the availability" of such advanced data services.

While the merged company is expected to provide customers with better service, economies of scale were the primary reason for the acquisition, according to Craig Mathias, an analyst at Farpoint Group.

He added that the acquisition of AT&T Wireless will help the bottom lines of all cellular carriers by reducing competition that had spurred a variety of discount rate plans.

Both AT&T Wireless and Cingular operate high-speed data networks based on an extension of the GSM standard known as Edge (enhanced data rates for GSM evolution). Edge offers an average throughput of 100Kbps to 120Kbps.

After Cingular completes its acquisition of AT&T Wireless, enterprises will still have to use more than one carrier to support mobile workers, said Peter Firstburn, an analyst at Meta Group.

"The acquisition will not solve all the coverage problems," he added.

Firstburn also predicted that the acquisition of AT&T Wireless could, initially, slow the installation of Edge service across the country as the combined company deals with other issues.

Although AT&T Wireless boasts that its high-speed Edge service is available in 6,500 cities and towns and along 30,000 miles of interstate highways, Chris Darrell, vice-president of information systems and services at Genex Services, has found Edge availability "not as high as we had anticipated".

Genex, which provides case management services for insurers, plans to deploy roughly 1,000 Edge notebook computer data cards to its field sales force and case management nurses during the next year.

The web-based Genex Case Management System does not operate well over 56Kbps dial-up connections, which is one reason Darrell decided to go with Edge. But based on trials with about 75 users, "even in metropolitan areas where we thought we would get a pretty good [Edge] signal, we have found no or poor signals".

AT&T Wireless has been "very responsive" to complaints setting up a special team to try and resolve his coverage problems, Darell said.

Bob Brewin writes for Computerworld

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