AT&T CEO aims to convert wireless cynics
- By John K. Waters
AT&T Wireless CEO John Zeglis opened his Comdex keynote last week with a
mea culpa for his industry's history of 'over-promising.'
'Wireless executives were on stages like this one,' he said, 'making people
gasp in amazement at predictions about a total digital wireless nation, where
'we'll see chairs and clothes and air fresheners as machines that combine with
broadband wireless networks to deliver a total sensory experience.''
Zeglis's revelation that the quote was taken from his own Comdex 2000 speech
produced laughter from the audience. 'Go ahead and laugh,' he said, grinning,
'but I wasn't alone.'
It was a nice moment, a self-effacing revelation that won the sleepy
afternoon crowd. But hype that 'seems to have cost the wireless industry some
credibility, certainly in the eyes of the investment community, and maybe in the
customer community, too,' hasn't dimmed Zeglis' personal enthusiasm for
'A lot has changed since November of 2000 when I was last speaking at this
show,' he said. But one thing hasn't changed: I am [still] a wireless junkie,
with a fervent and passionate belief in the wireless vision.'
While acknowledging his industry's PR excesses, Zeglis pointed out that
wireless has delivered on at least two of its promises: both the numbers of
wireless subscribers in North America and the range of handset options available
to them have increased dramatically in the three years since Zeglis appeared at
'We said that, in the United States, we were going to deepen the penetration
and pile up the customers,' he said. 'Hype? No! Not guilty on this one.'
Zeglis cited studies that peg the number of wireless customers in the U.S. at
the beginning of 2000 at about 74 million, for a penetration rate of about 25
percent. By 2002, those numbers had reached 125 million for 45 percent
penetration, he said. This year, industry analysts at Ovum expect the number of
wireless customers to approach 150 million users, with global users numbering
close to 1.25 billion. By the end of the year, Zeglis said, there will be more
wireless customers than wired.
AT&T Wireless launched its much-anticipated high-speed EDGE wireless data
network the morning of Zeglis' speech. AT&T is targeting business customers
with its new next-generation data service. Based on the GSM/GPRS global wireless
standard, currently deployed throughout Europe and Asia, EDGE (Enhanced Data
Rates for Global Evolution) delivers data transmission via modem cards at 100
kbps, which will give laptop and cell phone users roughly the same speeds as
broadband PC connections. The standard is offered in the U.S. by three carriers:
Cingular, T-Mobile and AT&T Wireless. Both Verizon Wireless and Sprint PCS,
which rely on CDMA technology, are planning to roll out CDMA 20001X, which is
expected to offer the same or better performance than EDGE technology.
The EDGE launch marks completion of phase two of AT&T Wireless' 3G
network architecture strategy, Zeglis told his audience, and there are plans in
the works to launch a higher-speed WCDMA (Wideband Code Division Multiple
Access) UMTS (Universal Mobile Telecommunications System) network in a few
cities next year. But Zeglis emphasized that AT&T Wireless won't be rushing
into nationwide UMTS. His company is 'firmly committed to the full UMTS path,'
which is its 'ultimate 3G plan and 3G goal.' If the wireless industry is going
to conquer the 'cynicism' it created by over-promising, he said, it is going to
have to deliver on its promises, and AT&T wants to make sure that the EDGE
'The truth is, the hype of 2000 caused all of us to speak in terms of
technology evolution that had unrealistically short intervals,' he said. 'If we
just back off a few steps, we might all have remembered that you have to give
new technologies time to breathe ... and to do that very important job of
teaching the customers how to use all that we have made available.'
The challenge for the wireless industry going forward, Zeglis said, is to
make a complex set of products and service offerings that are 'wrapped up in a
multi-part system of customers, devices, bandwidth and applications' simple and
interoperable. The industry's less-than-stellar record of providing easy-to-use
and interoperable technologies is one of the reasons North America has lagged
behind the rest of the world in wireless data adoption, he said.
'We need to improve our track record to agree to common standards,' he said.
'We've done this for voice and text messaging but not a whole lot else. This is
the golden goose, the fishes and the loaves, the alchemist's stone.'
Zeglis cited Short Message Service (SMS) as an example. The technology spread
like crabgrass in Europe, and by 2000 SMS was everywhere. But interoperability
problems among wireless carriers slowed adoption in North America. In 2002,
adoption rates increased dramatically, Zeglis noted, and the key driver was a
'What happened in 2000?' he said. 'Clay and Reuben happened. And through
short code voting for 'American Idol' contestants, people discovered that text
messaging could be fun.'
Zeglis complained that FCC policies have stunted the growth of the wireless
industry. New network services, such as EDGE, need more radio spectrum, he said,
'The government just hasn't made enough of the airwaves available,' he said. 'We
in the industry can't make more spectrum. God only made what she made.' His
invocation of the female deity drew more laughter from the crowd.
Zeglis also apologized for a system glitch that crippled his company's
ability to activate new accounts earlier this month. The glitch had been fixed,
he said, and 'we're back to near normal levels.'
AT&T Wireless' EDGE service is now available nationally for $79.99 a
month for unlimited data. It is available to AT&T customers in areas served
by the company's GSM/GPRS network, which covers approximately 6,500 cities and
John K. Waters is a freelance writer based in Silicon Valley. He can be reached