AT&Ts Zeglis Expounds on Wireless Plans

In a Comdex keynote address, AT&T Wireless CEO John Zeglis said past hype cost the industry credibility. Insead, the key to wireless success will be found in delivering realistic promises.

LAS VEGAS—Since he last delivered a keynote address at Fall Comdex three years ago, AT&T Wireless Inc. CEO John Zeglis has learned that hype doesnt pay.

In a more subdued keynote here on Tuesday, Zeglis apologized on behalf of the entire wireless industry for the wireless dot-com pipe dreams of 2000 that promised products ranging from wireless snow goggles to ubiquitous wireless video services.

"The line between audacious vision and over-the-top hype can be pretty thin," Zeglis said, noting that the key to wireless industry success lies in delivering realistic promises.

"However we do that, we werent doing it three years ago," he said. "Our inability to manage the vision seems to have cost the wireless industry some credibility...We went from being hotter-than-hot to being ho-hum, or maybe worse. The gasps of amazement turned into groans of frustration."

While the industry has delivered on its promise of huge increases the number of wireless subscribers and handset options in North America, it has not done enough to make sure services simple, interoperable or viable, Zeglis said.

Part of the problem has been deploying new networks before customers have a chance to get used to the current ones. AT&T launched its high-speed EDGE network nationwide on Tuesday, and there are already plans 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 said the company wont rush into nationwide UMTS because he wants to make sure that the EDGE network is successful first. "Just basic business," Zeglis said.

Interoperability and ease of use are two of the key reasons North America has lagged behind the rest of the world in wireless data adoption, he said, using Short Message Service (SMS) as an example. By 2000 SMS was prevalent in Europe. But SMS interoperability wasnt available among wireless carriers in North America until 2002, Zeglis observed, and it was only then that adoption rates rose dramatically.

"We could send to each others customers," he said. "Duh. We need to improve our track record to agree to common standards...weve done this for voice and text messaging but not a whole lot else. This is the golden goose, the fishes and the loaves, the alchemists stone."

Beyond that, Zeglis said, carriers need a hook to prove that the services they offer are necessary, or at least fun. For AT&T Wireless SMS offerings, the hook was letting the public vote for American Idol contestants.

"Clay and Reuben happened," he recalled. "And through short code voting for American Idol contestants, people discovered that text messaging could be fun."

Furthermore, carriers need to make sure that wireless data services are easy to use. This has been a weakness in AT&T Wireless services, which Zeglis readily admitted.

"Data is hard on a device," he said.

For example, it took 74 clicks for a customer to set up mMode on a cell phone when the wireless data service was launched in April of last year, and every application under the mMode umbrella required several clicks as well. To that end, the company is revamping mMode and in a few days will launch a new version that requires only two clicks to set up, he said. The new mMode also will make it easier to buy products over the Web from a telephone, he said.

In terms of the original purpose of a cell phone, Zeglis told an audience member that the company is working to improve the voice quality of GSM calls. "Were close on the heels of our TDMA quality," he said, referring to the companys previous wireless network, which was replaced by GSM to make data network upgrades easier. (In other words, the quality of the new services is trying to catch up to the quality of the old ones.)

The company also is working on voice-enabling more of its data applications, he said.

Zeglis also apologized for a back-end software upgrade glitch earlier this month that crippled the companys ability to activate new accounts. He said the glitch has been fixed and that the backlog is almost gone. "Were back at near normal levels."

Zeglis also made a play for more radio spectrum, saying that new networks and new services will require it and that FCC policy has stunted the growth of the industry.

"The government just hasnt made enough of the airwaves available," he said. "We in the industry cant make more spectrum. God only made what she made."

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