FedEx signs mobile data pact with AT&T Wireless

FedEx Corp. has signed a five-year deal to use AT&T Wireless Services Inc.’s next-generation network mobile data network to support new, high-bandwidth applications used by its 40,000 couriers, a move that analysts said indicates commercial mobile data services have started to become a reality for enterprise users.

FedEx also disclosed that it has selected the Microsoft Corp. Power PC operating system as the future technology for its next-generation mobile scanner and package-tracking device, which will be called PowerPad.

Ken Pasley, FedEx’s director of wireless systems development, said the AT&T Wireless General Packet Radio Service (GPRS) network “gives us significantly more bandwidth” than the company’s private network and will allow FedEx to expand the types of applications used on tracking devices. The throughput of the GPRS network is roughly 20Kbps to 40Kbps., compared with the 19.2Kbps. FedEx gets on its private nationwide network. This will allow couriers to send fat files such as digital signatures and could also support voice recognition technology, Pasley said.

Pasley, interviewed at the Cellular Telecommunications and Internet Association’s annual trade show in Orlando, Fla., said that the airtime price Memphis-based FedEx negotiated with Redmond, Wash.-based AT&T Wireless will be about the same as the cost of maintaining the aging private network. For competitive reasons, Pasley declined to provide details of the pricing he negotiated with AT&T.

FedEx doesn’t have to pay airtime charges for the 20-year-old private wireless network, Pasley said, but the company will have to maintain towers and the network of 750 radio repeaters, devices that send a signal from one tower to another, as well as the wire line networks that hook the wireless network into its systems.

Rod Nelson, chief technology officer at AT&T Wireless, said he views the FedEx deal as a solid endorsement of the capabilities of the company’s GPRS network. The network is a high-speed data service built on top of the European-standard-based Global System for Mobile (GSM) network that AT&T is building as an overlay to its existing Time Division Multiple Access (TDMA) network. “FedEx has deep and broad expertise in wireless,” Nelson said.

FedEx intends to use the AT&T Wireless network and capacity to initially supplement its private network in large metropolitan areas with the resources of the private network redeployed to serve smaller areas, Pasley said.

Ken Dulaney, an analyst at Gartner Inc. said this makes sense “since cellular carriers like AT&T will equip high-population or well-travelled areas with GSM/GPRS.” But carriers won’t put towers in rural areas because there’s “no money to be made,” in those locations, he said. “They will continue to cover with analogue.”

Capacity on the AT&T network will only be used to support couriers making pickups and deliveries for the traditional FedEx Express network. It doesn’t include airtime for FedEx Ground, the company’s home delivery operations or its over-the-road trucking operations, Pasley said. But, he added, the deal includes options for those operating units.

The AT&T network will be used to support a new tracker device called PowerPad, which FedEx has decided to develop based on the Microsoft Power PC operating system, Pasley said. The PowerPad will use Bluetooth short-range wireless communications to feed data from the handheld computer to a phone couriers will wear on their belts, which connects to the AT&T Wireless network.

The reach of the AT&T network will allow couriers to communicate directly from inside a customer’s premises to the FedEx network, which will allow FedEx to provide better service, Pasley added. Today, all a courier can do with the tracker indoors is scan packages. The unit doesn’t communicate with the company network until the courier returns to the truck and “shoes” it into an on-board cradle.

Pasley provided few details on the new PowerPad, saying it is still under development. But he did say that FedEx would like it equipped with voice recognition technology. This could allow a courier to say a simple keyword such as “dispatch” and then be immediately connected with a dispatcher. Symbol Technologies Inc. in Holtsville, N.Y., and Motorola Inc. in Schaumburg, Ill., are developing prototypes of the new PowerPad hardware, Pasley said.

Dulaney called the decision to use the Pocket PC operating system a “good move” because he considers Microsoft’s product better than the mobile phone operating system FedEx had previously used. That operating system was from London-based Symbian Ltd., a software licensing company owned by hardware manufacturers including Nokia Corp., LM Ericsson Telephone Co. and Motorola.