Next-gen wireless: Will users pay the price?

The prices customers pay for faster wireless bandwidth with next-generation data services will be a key to how fast those services are ultimately adopted.

That was one of the messages that emerged Friday at a conference on wireless technologies sponsored by London-based Invest-UK and the Waltham, Mass.-based Massachusetts Telecommunications Council. The event took place at the British Consulate here.

So far, prices for the new services vary widely as wireless carriers try to see what the market will bear, an industry official said.

“We’re giving trial customers three months of next-generation services free, and after the first month presenting them with a total of their costs and asking, ‘Is that value for your money?'” said Chris Hall, managing director at Manx Telecom Ltd. on the Isle of Man, U.K.

Manx has about 120 trial customers on the Isle of Man using cell phones that average 310K bit/sec. of throughput – up to 20 times what conventional cell phones offer. The phones run color displays, enable Internet browsing, and offer downloading of e-mail and playing of real video. For business users, the phones can also serve as a virtual desktop for consulting e-mail and files wherever they travel on the island, Hall said.

Rather than divulge what Manx charges for e-mail downloads, Hall said the wireless carrier will digest customer responses to the monthly fees during the next few months.

In the U.S., several carriers are rolling out faster networks based on next-generation packet-based switching technologies. Pricing is often based on what it costs to move a megabyte of data, with costs ranging from US$2 per megabyte up to $7, said Phillip Redman, an analyst at Stamford, Conn.-based Gartner Inc. “Pricing is a leading inhibitor to the adoption of these services,” he said.

AT&T Wireless Services Inc. in Redmond, Wash., is currently offering $1 per megabyte as its cheapest rate for General Packet Radio Service wireless service, which can provide 20K to 40K bit/sec. throughput. But that price is only if a subscriber buys the most megabytes per month now being offered: 200MB of data for $199 a month.

Verizon Wireless in Bedminster, N.J., launched its Express Network service over the Code Division Multiple Access 2000 protocol earlier this year (see story). It offers access at faster network speeds of 60K to 144K bit/sec. for $30 a month – atop its monthly cellular voice plans, based on per-minute usage. (The cheapest is a $35 monthly voice plan.)

Verizon also has megabyte pricing plans from $1 to $3.50 per megabyte.

One customer of that Verizon service, attorney Joseph R. Gagliano Jr., who heads a New York-based entertainment law firm, said today that the faster speeds are worth the cost. He can use the service to wirelessly access two e-mail servers from his laptop and open large text documents that often contain graphics, including publicity photos for entertainers he represents.

By using the wireless connection, he can stay connected throughout the day rather than waiting until evening to find a wired connection.

“I’m definitely more productive because of it,” Gagliano said. “I’d recommend it for people who travel a lot and use e-mail.” The price is “worth it,” he said, and is comparable to paying for added cost of another cell phone. Gagliano uses a wireless modem, which initially cost him $200, in the laptop.

Analyst Redman said the speeds are quite enticing with the systems he has tested. But he warned that users might not be prepared for how many megabytes they use. “I was surprised I could use 10 to 15MB an hour, just looking at e-mail and surfing,” Redman said.