Wednesday, February 26, 1997

AT&T unveils wireless service for local calls

By DAVID E. KALISH AP Business Writer

NEW YORK (AP) - AT&T Corp. on Tuesday detailed plans to tie its wireless phone network directly to millions of home phone lines, offering consumers a unique way to make local calls and speed access to the computer Internet.

While still in the test stage, the new technology could turn AT&T's vast wireless network into a potent weapon in its battle with the regional Bell companies for local phone customers.

AT&T said it will begin testing the service in Chicago this year, first with its own employees and then with consumers. Based on the test results, the company will determine how and when to roll it out in local markets.

Customers of the new service would use their existing home phones. But instead of traveling across a copper-wire network, the calls would be routed to a pizza-sized box mounted on the side of a home. This radio transceiver box would transmit voice and data to a base station and then route it across AT&T's wireless system of switches and transmission lines to other phones.

Unlike mobile phone callers, people using the new service can't travel outside the home to make calls. But down the road, AT&T plans to sell another service that will enable people to use their cellular phones like a home cordless model, paying local rates when calling inside the home instead of pricier mobile-phone fees.

For consumers, the new service ultimately could lower local phone rates as entrenched carriers vie with AT&T for local customers, said Dawn Honeyman, an Okla.-based consultant with TeleChoice Inc.

"This truly gives people another option" for local service, Honeyman said.

AT&T executives said they will wait for test market results before setting prices, but that they won't charge customers for the service's electronic box. The company said it was too early to comment on a report Monday that it could charge as little as $10 a month for the local phone service.

For AT&T, the wireless local-phone system would save the nation's largest long-distance company part of the billions of dollars it pays regional phone companies each year to complete calls across their copper-wire lines. However, AT&T would still need to pay for access across wires to receiving phones not tied to its wireless network.

The new service gives AT&T an important wedge to penetrate local phone markets as it vies for the tens of millions of customers now served by the regional Bells, GTE Corp. and other local companies.

Given the steep cost of installing new antennas in towns and cities, the company was expected to select more populous markets with the most potential for profits.

"It's not likely that where I am in Tulsa, Okla., that we'll be on the top of their list," Honeyman said.

In addition to the wireless plans, AT&T said it would continue to try to break into local markets by leasing access lines from regional phone companies.

AT&T executives said the wireless system would provide speedier data transmission than traditional copper wires, which were built to carry voices, not data. It will provide two phone lines to each home and the capability for high-speed access to the Internet at 128,000 bits per second, or up to nearly 10 times faster than Internet access provided by most computer modems.

"There has never been an efficient, economic way for most consumers to get by this final obstacle," AT&T president John Walter told a news teleconference Tuesday.

Now AT&T "has found a way around, or perhaps more accurately, over this hurdle," Walter said.