InformationWeek

September 25, 2000

Printer ready

Wireless Apps: Problems And Opportunities

continued...page 2 of 3

More on Nextel:

sidebar: ASPs Can Free IT Managers From Tangle Of Wireless Data

Tele.com AT&T-Nextel Deal All Talk? (9/18/00)

TechWeb Finance: Analysts Say Nextel, AT&T Wireless Would Be Good Fit (9/7/00)

EETimes: FCC report sees mobile data and fixed wireless poised to boom (8/28/00)

TechEncyclopedia:

Send Us Your Feedback

The company also offers text messaging, two-way radio, and, of course, cellular voice service through its wireless network.

Nextel Direct Connect is a two-way-radio service that functions something like walkie-talkies. It's aimed at blue-collar workers who need to stay in touch while in the same service area, and its users incur lower charges than with full-blown cellular service. Nextel Direct Connect is priced at $10 a month for 250 group minutes or $25 a month for 750 group minutes.

Nextel gets high marks for its technology from industry observers, but the company's network footprint isn't as large as those of competitors AT&T and Sprint PCS. Buying additional network resources at auction can solve that problem, but network licenses are expensive, and many well-financed companies are bidding for them.

"Nextel probably needs a big partner because they need more bandwidth," Cahner's Hyers says. "They need someone who could give them the financial backing to participate in upcoming bandwidth auctions."

In recent months, analysts and business writers have made great sport of guessing who will acquire Nextel, and when. The company has remained staunchly independent, but rumors are being fed by consolidation within the cellular market.

"Nextel is very attractive at this point," Hyers says. "Since it's focused on the business market, its customer revenue is high and the churn is low, so the cost per customer isn't overly high. Nextel has a customer base and a track record, so they have spent a lot of time trying to understand their customers' data needs."

Cultural and technological differences abound between corporate voice and data. Companies own their data resources, and are responsible for building, maintaining, upgrading, and securing the enterprise data network. But the telephone network is owned, managed, secured, and maintained by another party.

"We are exposing IT to what's possible," says Greg Santoro, Nextel's VP of Web-based services. "We want IT managers to see what other companies have done in terms of [wireless] Internet applications, to allow them to think creatively about the types of things they could do internally. That spawns creativity and discussions within the company about mobile-enabling their sales forces or service forces, or increasing the productivity of their office workers."

IT has a number of questions for Nextel. Does committing to Nextel mean a company shuts itself out of other systems? Is Nextel strong in the cities where the company has a presence? What if the company wants wireless access to data stored on a corporate server? At this point, such access isn't possible.

"These are questions that IT is struggling with right now," says Probe's Chamberlain. "They're also looking for proof positive of whatever savings or capabilities are being promised."