A Report from IWCESaturday, March 01, 2008
The International Wireless Communications Expo (IWCE), held every year at this time, is a very interesting conference focused on the two-way radio industry, both commercial and first responders, rather than cellular communications. The IWCE has been around since the two-way radio and paging markets were booming, which goes back a lot longer than cellular. The need for mobile communications pre-dates cellular by fifty years or so, with the first police communications systems being installed in the 1930s.
Please note that for the purposes of this article, I will refer to today’s commercial wireless businesses using the old term “cellular” since “two-way radio” is wireless as well and I want to be clear about which portion of the industry I am referring to.
The two-way radio and paging industries were booming in the 1960s, 70s and 80s and, at least in the United States, only began to decline after cellular was built out to the point where it could compete with two-way radio and paging systems on both range and pricing. When Nextel came online with its push-to-talk (PTT) service along with cellular, there was a significant impact on two-way radio and paging. Nextel service did not require buying a base radio station or leasing one from a service provider, so customers only had to purchase handsets to make use of the network. Further, Nextel actually hastened the demise of commercial two-way radio by going around the country buying up many of the Specialized Mobile Radio (SMR) systems that were used by thousands of customers. Nextel needed the spectrum for its own system and once it purchased the SMRs, it usually ended up with the customers who had been on the system because they had nowhere else to go for service.
In the 1970s and 1980s, there were three large competitors for this business: Motorola with the lion’s share, followed by General Electric and, finally, RCA. During this period I worked for all three of these companies at one time or another in various parts of the country. Today, Motorola is still the leader in this marketplace, followed by M/A-Com, which is owned by Tyco and whose roots go back to GE Mobile Radio, a host of Japanese companies and Tait Communications, which got its start in New Zealand.
So before cellular, the market for two-way radios and pagers was a lot bigger in the United States than it is today. In the mid 1980s as two-way paging was coming online, there were 56 million pagers in use in the United States while today that number is somewhere around 10 million. Everyone needed two-way radios for their business: trucking companies, taxis, plumbers, trains, tow-trucks and, of course, the first responder community. Two-way radio was big business and it was also a lot of fun in those days.
Many of the two-way radio services were owned and run by what is commonly called “Ma and Pop” shops. They sold and serviced two-way radios, found a mountain top or tall building, leased space, put up a base repeater station and then leased service to their customers. But times have changed and there are only a few of these companies still around making money on two-way radio. The demand in the commercial two-way sector has certainly dwindled due to Nextel and cellular services.
For a number of years, IWCE was, as you can imagine, getting smaller and smaller. However, for the past three years it has been growing in size again and I think this year’s event was the largest I have seen since 2001 or so. Why is it growing again? Primarily because two-way radios are important for homeland security, in the event of a disaster and for everyday communications, and all of the attention being placed on first responders. The size of the market is difficult to judge, but it is a lot smaller than the cellular market. For example, there are about 3 million first responders in the United States, so perhaps the total addressable market is 50 million customers if that. Not a lot, but still enough that there are a number of companies fighting over the business.
Back to the Show
The trade floor was full of booths from companies large and small involved in this part of the wireless business: Motorola, M/A-Com (Tyco), iCOM, Kenwood, EF Johnson, Tait, Midland and Vertex-Standard all have two-way radio equipment available for this market segment and there were hundreds more exhibitors showing batteries, GPS devices, specialized headsets, antennas and every other piece and part needed to put these systems together and keep them running.
I won’t bore you with details about most of the equipment because the two-way radio/paging business has its own language and its own culture, and even though cellular is an outgrowth of two-way radio, most people who enter the cellular business today do not know much if anything about two-way radios. They may have seen one in a cab or police car or used an FMR handset to talk to family and friends, but they generally don’t know that cellular got its start in two-way radio and has evolved into its own, very different marketplace.
However, I saw a lot of evidence of the crossover between the two market sectors starting. For example, several companies are selling Bluetooth headsets that interface with two-way radios. The difference between the ones we are accustomed to and these devices is that in addition to having an earpiece and a microphone, they also must have a push-to-talk switch to activate the transmitter in the radio. Also for the first time, we are seeing large display screens on handheld two-way radios and we will see more of this. Today’s typical first responder has voice and data services available to them in a vehicle, usually a voice two-way radio mounted in the car and then a notebook computer mounted between the front seats and interfaced either to the first responder network (with slow-speed data access) or connected to one of the cellular networks running 3G broadband data services. In many cars, they also have a speed radar system as well as video and audio capabilities, usually with the camera aimed out the front window.
When officers leave their vehicles and switch to their handheld radios (handie-talkies or HTs), they leave behind the data services, camera and any other device that is mounted in the car. You might think of their car as your desk. Only a few years ago, when you left your desk, you could only take your telephone with you in the form of a cellular telephone. Today, from practically anywhere in the world, you can access any information you have access to on your desk via cellular and wireless broadband.
As public/private sector relationships and partnerships continue to develop, we will be seeing more of this transference of capabilities to the person. However, it is extremely important for the commercial cellular industry to understand that first responders have different needs in the field. For example, I saw a prototype of a new handheld radio for police and fire. It has a color screen with access to the Internet or whatever using commercial technology, and access to the police dispatcher using a standard two-way radio. Good idea and we will be seeing many of these devices. However, this particular one won’t be a big seller. Why? Because it has a touch screen that requires two-handed operation to do even simple things. I don’t know of any first responder who feels comfortable being in the field and having to use both hands to communicate. The microphones on their shoulders are one-handed, and the only time they have to use both hands on a radio is when they have to change the channel. Even that will become automated with over-the-air programming as we move forward.
I invited a number of two-way radio and paging people to attend CTIA Wireless to see what is happening in the commercial sector, and I would like to suggest to the cellular sector that next year, March 18-20, 2009, some of you make your way to Las Vegas to see how the other side of wireless works and where opportunities lie.
Andrew M. Seybold