Subject: [NEXTEL-1] Resellers, Vendors deal with CDPD transition challenges

From: Marcel <[email-masked]>
Date: Mon, 18 Nov 2002 12:25:05 -0500

Resellers, Vendors
Face CDPD Transition

By Sue Marek
November 18, 2002

Dramatic technology changes often come with great benefits and
tremendous challenges. Such is the current situation surrounding
the eventual shutdown of the cellular digital packet data network
and the planned migration of longtime CDPD customers to higher
speed data networks such as GPRS and 1XRTT.

CDPD overlays the analog cellular network and earlier this year
the FCC decided to sunset the analog compatibility requirement for
cellular phones, making it unnecessary for carriers to support
analog after the next five years. For many, the impending demise
of the analog network signaled the end of CDPD and the eventual
migration of all CDPD customers to 1XRTT and GPRS.

While AT&T Wireless is the only operator to say publicly it will
shut down its CDPD network by 2004, the other major CDPD operator,
Verizon Wireless, is studying the future of its CDPD network. (See
related story.)

Though few will argue about the new capabilities made possible by
the higher speed next-generation data networks such as 1XRTT and
GPRS, the associated equipment and service costs have many
value-added resellers and CDPD equipment makers worried about
potential customer fallout from the transition. Already, some
resellers and equipment makers say they have had customers return
CDPD equipment after learning about AT&T's anticipated network
shutdown, while others say they have a significant amount of CDPD
hardware sitting on shelves that will likely never be sold now
that carriers are moving away from CDPD.

And while AT&T did provide all of its channel partners with early
notification of its plans, some say the company has failed to
provide details about potential incentives it will offer CDPD
customers to get them to move to the GPRS network. "I completely
understand the move from CDPD to GPRS," says Steve Brumer,
executive vice president and co-founder of Global Wireless Data, a
value-added reseller. "But there's been no real transition plan
put in place for these companies that have purchased CDPD
products."

In addition, Brumer says that many of his company's CDPD customers
currently are on flat-rate monthly CDPD plans that cost around $29
to $59 per month. So far, operators like AT&T and Verizon haven't
offered comparable rate plans on the next-generation networks that
will make it possible for these customers to budget their monthly
data usage.

CDPD equipment makers say they will still support CDPD as long as
there is a market for the gear. Panasonic Computer Solutions,
maker of the Toughbook, a rugged laptop used by many public safety
organizations, says that it is heavily invested in 1X and GPRS but
will continue to make CDPD laptops if necessary. "We don't build
and store inventory," says Kevin Martin, wireless business
development manager for Panasonic. "We build what people want and
if people want CDPD today, we will build it for them. But we will
make them aware of their options."

Likewise, Novatel Wireless says it still has demand for its CDPD
modules, particularly in South America, where there is an existing
CDPD network.

But not everyone is convinced that other operators will follow
AT&T's lead. According to Jason Cohenour, senior vice president,
worldwide sales and marketing for Sierra Wireless, the demise of
legacy wireless networks such as CDPD is usually slower than
anticipated. "Because AT&T has made the announcement doesn't mean
that all CDPD service will shut down. Other carriers will support
CDPD services and sell it for some years to come."

Nevertheless, Cohenour admits that Sierra's CDPD modem demand is
down and sales of the company's 2.5G data cards are up.

Some equipment makers are beginning to see their customers make
the transition. Martin says three of Panasonic's large commercial
customers have embraced next-generation technologies and are in
the process of migrating away from CDPD even though they don't
have the same available coverage area. Some customers are willing
to use circuit-switched data as a fallback until the 1X and GPRS
network coverage areas expand.

Greg Gifford, president of Globicom Wireless, a multinetwork
mobile virtual network operator that provides data connectivity to
its customers, says about 90 percent of enterprise customers are
satisfied with their current mobile data solutions. The question
is, will they still be satisfied once they migrate to
next-generation data networks?

"We're creatures of habit, and forced transition can be
uncomfortable," Gifford says. But hopefully CDPD customers are
ready to step outside their comfort zone and make that leap.

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