U.S. patent application number 14/994017 was filed with the patent office on 2016-05-05 for operations method for providing wireless communication services.
This patent application is currently assigned to INTEL CORPORATION. The applicant listed for this patent is INTEL CORPORATION. Invention is credited to Michael Brink, S. Douglas Hutcheson, Scot Jarvis.
Application Number | 20160127568 14/994017 |
Document ID | / |
Family ID | 42797923 |
Filed Date | 2016-05-05 |
United States Patent
Application |
20160127568 |
Kind Code |
A1 |
Hutcheson; S. Douglas ; et
al. |
May 5, 2016 |
OPERATIONS METHOD FOR PROVIDING WIRELESS COMMUNICATION SERVICES
Abstract
The present invention is directed to an improved operations
method for a wireless communication system. The improved business
method, operations method, network and system of the present
invention includes the steps of delivering cellular services to the
mass market, reducing peak capacity, increasing overall capacity
utilization, improving capital utilization, providing an
"all-you-can-eat" pricing model, and designing capacity based upon
where the users live, work, and play.
Inventors: |
Hutcheson; S. Douglas; (San
Diego, CA) ; Brink; Michael; (Bend, OR) ;
Jarvis; Scot; (Sammamish, WA) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
INTEL CORPORATION |
SANTA CLARA |
CA |
US |
|
|
Assignee: |
INTEL CORPORATION
SANTA CLARA
CA
|
Family ID: |
42797923 |
Appl. No.: |
14/994017 |
Filed: |
January 12, 2016 |
Related U.S. Patent Documents
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Application
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Filing Date |
Patent Number |
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14828374 |
Aug 17, 2015 |
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14994017 |
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14105441 |
Dec 13, 2013 |
9118780 |
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14828374 |
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13602002 |
Aug 31, 2012 |
8630616 |
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14105441 |
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13047641 |
Mar 14, 2011 |
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13602002 |
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12358117 |
Jan 22, 2009 |
7907932 |
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13047641 |
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11233894 |
Sep 23, 2005 |
7483689 |
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12358117 |
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Jan 30, 2001 |
6959183 |
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11233894 |
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Oct 20, 2000 |
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Current U.S.
Class: |
455/406 |
Current CPC
Class: |
H04M 2215/0108 20130101;
H04M 2215/0184 20130101; H04M 15/8083 20130101; H04W 84/042
20130101; H04M 17/00 20130101; H04B 1/707 20130101; H04M 2215/32
20130101; H04M 15/8033 20130101; H04M 2215/7435 20130101; H04M
15/00 20130101; G06Q 20/12 20130101; H04M 2215/0152 20130101; G06Q
20/14 20130101; H04M 15/745 20130101; H04W 4/24 20130101; H04W 4/00
20130101; H04W 16/04 20130101; H04M 15/80 20130101; H04L 41/22
20130101; H04M 15/8005 20130101; G06Q 20/16 20130101 |
International
Class: |
H04M 15/00 20060101
H04M015/00; H04W 4/24 20060101 H04W004/24 |
Claims
1-20. (canceled)
21. A computing device including a server computer to support
wireless communication, the computing device to: facilitate
establishment of one or more wireless communication services,
wherein the one or more wireless communication services include a
data service offered according to a subscription plan; and provide
the one or more wireless communication services over a network.
22. The computing device of claim 21, wherein the subscription plan
is based on a flat-rate fee to be received in multiple installments
over a period of time.
23. The computing device of claim 21, wherein the data service
offers access to the Internet, wherein the Internet is capable of
being accessed using one or more computing devices including one or
more mobile computing devices.
24. The computing device of claim 21, wherein the one or more
wireless communication services comprise a voice service offered
according to the subscription plan.
25. The computing device of claim 24, wherein the voice service
offers long-distance calling based on a nationwide coverage,
wherein the long-distance calling is capable of being performed
using the one or more computing devices.
26. The computing device of claim 21, wherein the one or more
wireless communication services comprise Short Message Service
(SMS) according to the subscription plan, wherein the SMS is
capable of being performed using the one or more computing
devices.
27. A method for supporting wireless communication, comprising:
facilitating establishment of one or more wireless communication
services, wherein the one or more wireless communication services
include a data service offered according to a subscription plan;
and providing the one or more wireless communication services over
a network.
28. The method of claim 27, wherein the subscription plan is based
on a flat-rate fee to be received in multiple installments over a
period of time.
29. The method of claim 27, wherein the data service offers access
to the Internet, wherein the Internet is capable of being accessed
using one or more computing devices including one or more mobile
computing devices.
30. The method of claim 27, wherein the one or more wireless
communication services comprise a voice service offered according
to the subscription plan.
31. The method of claim 30, wherein the voice service offers
long-distance calling based on a nationwide coverage, wherein the
long-distance calling is capable of being performed using the one
or more computing devices.
32. The method of claim 27, wherein the one or more wireless
communication services comprise Short Message Service (SMS)
according to the subscription plan, wherein the SMS is capable of
being performed using the one or more computing devices.
33. At least one machine-readable medium comprising instructions
which, when executed by a computing device, cause the computing
device to: facilitate establishment of one or more wireless
communication services, wherein the one or more wireless
communication services include a data service offered according to
a subscription plan; and provide the one or more wireless
communication services over a network.
34. The machine-readable medium of claim 33, wherein the
subscription plan is based on a flat-rate fee to be received in
multiple installments over a period of time.
35. The machine-readable medium of claim 33, wherein the data
service offers access to the Internet, wherein the Internet is
capable of being accessed using one or more computing devices
including one or more mobile computing devices.
36. The machine-readable medium of claim 33, wherein the one or
more wireless communication services comprise a voice service
offered according to the subscription plan.
37. The machine-readable medium of claim 36, wherein the voice
service offers long-distance calling based on a nationwide
coverage, wherein the long-distance calling is capable of being
performed using the one or more computing devices.
38. The machine-readable medium of claim 33, wherein the one or
more wireless communication services comprise Short Message Service
(SMS) according to the subscription plan, wherein the SMS is
capable of being performed using the one or more computing devices.
Description
FIELD OF THE INVENTION
[0001] The present invention relates to an improved business
method, operations method, network and system for delivering
wireless communications services. The business method, operations,
and network and system of the present invention may be used
separately, or in combination, The invention is adapted to higher
overall network capacity, lower peak capacity, and higher overall
network usage, relative to prior known methods, networks, and
systems for delivering wireless communications services. The
present invention may feature flat rate billing of users. This is
in contrast to prior known wireless services, in which services are
delivered on a per call or per minute usage charge basis. This
change in pricing model affects usage and capacity of the network
in certain ways. In a preferred embodiment, the system and network
of the present invention employs flat rate bilking, achieves high
capacity utilization of network components, and achieves lower peak
capacity. These features enable the network and system of the
present invention to handle a higher overall volume of calls with
less costly central network components and more streamlines
operations than conventional cellular systems.
BACKGROUND OF THE INVENTION
[0002] Wireless communications services represent the fastest
rowing segment of the telecommunications industry worldwide.
Although the Telecommunications Act of 1996 was intended to open
the competitive environment in the United States, allowing many new
entrants into the local access loop, growth has been constrained by
several factors. Some of these factors are endemic to any
communications system (limited bandwidth, high capital costs,
etc.). Other constraints are imposed by the business models that
have come to be generally accepted in the industry. Most land line
and wireless operators typically derive the majority of their
revenues and profits from a relatively few--"heavy" and
"business"--users of their networks. The heavy and business user
segments have come to be considered the most desirable segment of
the wireless customer population, due to their relative price
inelasticity. Land line providers have typically focused on
business users. Accordingly, per minute of usage pricing of
cellular services has been adapted to that conventional business
model, which was introduced in the late 1980's. That conventional
model, however, imposes constraints on operations and networks, and
presents high usage charges to casual users. These patterns have,
in fact, been favored by cellular operators due to the high
profitability levels they offer.
[0003] A conventional wireless system of the type known prior to
the present invention is described by Robert C. Raciti, in CELLULAR
TECHNOLOGY (July 1995), which is incorporated herein by reference.
Prior known cellular networks are typically constructed to achieve
a relatively uniform level of coverage over a preselected service
area. The service area is extended to a greater metropolitan area,
namely, major population centers and major highway connections.
Generally, the service area is specifically adapted to serve
roaming traffic, which is billed at a higher rate. Consequently,
roaming is favored in prior known systems. The service has been
marketed on the breadth of coverage as well as complex features,
targeted at the heavy and business users.
[0004] Network capacity is rationed, to avoid over use of the
network, by maintaining pricing levels that tend to limit casual
usage. Use is metered by price, and constrained by that pricing
within the design limits of the system. When the existing wireless
communications operators have looked at moving their market focus
from the typical business users to a broader market, they have
typically introduced prepaid services that allow the consumer to
control the costs but have required very high per minute usage
charges.
[0005] Wireless communications networks using this conventional
business Model typically comprise three basic components: Cell
sites with RF base stations; Mobile Telephone Switching Offices
(MTSO); and mobile phones that are provided to subscribers. Each
base station contains a radio transceiver and controller, and
provides radio communications to the mobile phone units operating
in its cell. The cells are typically engineered into a network that
is deployed in a hexagonal cell pattern, in order to provide local,
regional, or national cellular coverage.
[0006] The MTSO links calls together using traditional copper,
fiber optic, and/or microwave technology and acts as a central
office exchange, allowing users to place a call on the local and
long distance public telephone systems or mobile to mobile traffic.
It allows mobile communication devices in the cell to dial out and
alerts devices in the cell of incoming calls. The MTSO continuously
monitors the quality of the communications signal and transfers the
call to another base station that is better suited to provide
communications services to the mobile device.
[0007] The mobile communication devices comprise hand-held phones,
car phones, notebook computers, personal digital assistants,
pen-based computers, palm-top computers, pagers, hand-held e-mail
devices (such as those produced under the Blackberry.TM. brand),
and portable data collection devices. The present inventors
anticipate that, although the majority of cellular traffic has
traditionally been voice communications, the relative proportion of
traffic that comprises data, text, and potentially video, messages
is increasing and is expected to increase dramatically in the
corning years. The present invention is intended to work with all
wireless communications devices. When these various types of mobile
units communicate with the network, they must register with the
system by subscribing with a wireless operator.
[0008] Most wireless operators of prior known systems have
arrangements with other operators allowing users to roam. Roaming
occurs when the mobile unit is outside the coverage area of their
"home" cellular service provider and an alternative cellular
provider handles the communication. Mobile units may also be
connected to the Public Switched Telephone Network (PSTN) operated
by an Incumbent Local Exchange Carrier (ILEC), Competitive Local
Exchange Carrier (CLEC), Regional Bell Operating Company (RBOC),
long distance carrier, or other telecommunications provider.
[0009] The radio spectrum used for wireless (cellular)
communications comprises many bands that are allocated and used for
commercial, personal, and military use. Fifty (50) MHz of spectrum
is allocated to cellular networks in the 824-849 MHZ and the
869-894 MHZ bands. This spectrum has been allocated into two 25 Mhz
bands and has generally been allocated to very large service
providers. Other bands of spectrum have been allocated for wireless
communications. PCS is a wireless communications network that
operates at a radio frequency of 1.9 GHz. This spectrum has been
subdivided into three 30 Mhz and three 10 Mhz bands that are used
by both large service providers and many new, more innovative
service providers. The allocation of radio spectrum in the United
States is described in the NTIA Manual of Regulations and
Procedures for Federal Radio Frequency Management, Ch. 4, at 4-4 to
4-91 (2000), which is incorporated herein by reference.
[0010] Several types of network access are available in the United
States including, without limitation: Advanced Mobile Phone Systems
(AMPS), Time Division Multiple Access (TDMA) (in two formats), and
Code Division Multiple Access (CDMA). AMPS is the cellular standard
that has been extensively deployed in North America and has been
commercially available since 1983. The current cellular standard
describing access methods to the network is IS-553. It divides 50
MHZ of spectrum into 832 frequency channels, each 30 KHz wide.
Various organizations, such as the Portable Computer and
Communications Association (PCCA), modem manufacturers, computer
manufactures, and service providers, have worked together in
defining the IS-553 interoperability standard.
[0011] Time Division Multiple Access (TDMA) is a digital access
method that allocates time slots to different users, allowing them
to share similar radio frequency channels. TDMA divides each
frequency channel into six time slots and allocates two slots to
each user. This time division of the carrier signal increases the
network capacity by 300% (a factor of 3). Standard IS-54, currently
upgraded to IS-136, describes a dual mode network access method
allowing mobile units the choice of using TDMA or AMPS
operation.
[0012] Code Division Multiple Access (CDMA) sends multiple messages
over the same wide frequency channel that is decoded at the
receiving end. Each mobile unit in a cell is assigned a different
spreading sequence. This allows multiple users to share the same
frequency spectrum. The use of CDMA increases network capacity by
an order of magnitude (a factor of ten). CDMA network access
standards are specified in standard IS-95, which is incorporated
herein, by reference. TDMA and CDMA digital access methods offer
superior performance in terms of higher capacity, improved voice
quality, encryption for communication privacy, and integration with
digital terrestrial networks.
[0013] Cellular Digital Packet Data (CDPD) is a technology standard
sponsored by the RBOCs and McCaw Cellular. CDPD overlays packet
switching onto the existing cellular voice network, and transmits
data packets over the idle capacity. This packet overlay is based
on an Internet protocol to backbone and does not need the call
setup procedures that are required for switched voice calls. This
makes CDPD adapted to short, bursty message applications, such as
point-of-sale (POS) credit card verification, vehicle dispatch,
package tracking, and e-mail. CDPD generally increases the network
utilization, yet, excessive data traffic may cause interference
with existing cellular calls.
[0014] There are a number of other wireless applications that may
be used in conjunction with cellular telephony or separately:
digital communications such as CDMA; cordless telephones; paging;
specialized mobile radio (SMR); and satellite communication.
Networks based on digital communications typically have a greater
capacity than analog networks for carrying voice and data traffic
than analog networks.
[0015] Michael E. Porter, in COMPETITIVE STRATEGY (1980), which is
incorporated herein by reference, described various stages through
which products progress through their life cycles: introduction;
growth; maturity; and decline. Prior to the present invention, the
cellular industry has remained in its growth phase. Some
characteristics of Porter's growth phase are: growth in use;
widening of the buyer group; improved reliability; competitive
product improvements; increased advertising; increased channels of
distribution; and high profit margins. The cellular industry has
shared these features prior to the present invention.
[0016] There are approximately 100 million cellular customers in
the United States. Cellular service is growing at a rate of
approximately 1 million new customers every month. The buyer group
has widened, extending the initial buyer group of large businesses
to include most businesses. System reliability has improved,
greatly. There have been many competitive product improvements,
such as digital technology advancements, voicemail, encryption, and
enhanced battery life. Cellular products and services are featured
widely in advertising on television, radio, print, and on the
Internet. Alternate channels of distribution are also becoming more
popular. For example, retail office supply, electronic, and
computer chains are actively marketing cellular phones and
services. Throughout this period of growth, cellular operators have
enjoyed high profit margins.
[0017] McCaw Cellular was one of the early entrants into the
wireless telephone market. The business model developed by McCaw
(AMPS) has come to be generally accepted as the predominant
business model for rendering cellular service, at least in the
United States. A typical cellular system to configuration of the
type that was known prior to the present invention is described by
Heith Knightson, in D1--CELLULAR NETWORK INFRASTRUCTURE--VOICE AND
SHORT MESSAGE SERVICES, Telecommunications Standards Advisory
Council of Canada (1997), which is incorporated herein by
reference. As described by Knightson, AMPS is based on analog RE
technology operating on frequencies 825-844 MHZ and 870-899 MHZ.
The definitive standard for AMPS voice services is TIA IS-53
Cellular Features Description, which is incorporated herein by
reference. The mechanisms to implement these services are given in
TIA IS-41 Cellular Radio Telecommunications Intersystem Operations,
which is incorporated herein by reference.
[0018] Prior to about 1997, AMPS was generally considered to be the
main technology for providing mobile phone service. Currently,
digital technologies, such as TDMA and CDMA have gained ascendancy.
These digital technologies offer improved voice quality and
increased capacity. Standards have been promulgated for each
technology, which are incorporated herein by reference. Although
the technologies for TDMA and CDMA are different from AMPS, some of
the equipment, infrastructure, and standards currently deployed for
AMPS may be used in CDMA and TDMA networks. The radio portions
(physical layer) of the mobile phones and base stations have been
modified to support these new RF technologies.
[0019] The cellular network is viewed by the PSTN as an alternative
End Office, where voice traffic originates and terminates. The
interface between the PSTN and cellular network operates SS7
protocols, which are incorporated herein by reference. Within the
cellular network, the signaling and voice traffic operate over
separate trunking facilities, just as in the land line network. The
SS7 protocol is used to carry signaling information over these
out-of-band common channel signaling facilities. This separation of
signaling and voice traffic is also preserved over-the-air. Between
the mobile phone and the base station, the Forward Control Channel
and Reverse Control Channel convey signaling information. Voice
traffic is transmitted over the Forward Voice Channel and Reverse
Voice Channel.
[0020] FIG. 1 illustrates the relationship between the cellular
network infrastructure and the PSTN in wireless communications
systems of the type that were common in the cellular industry prior
to the present invention. The IS-41 messages are routed via
Signaling Transfer Points (STPs). The STPs handle network routing.
In particular, the route to the Home Location Register (HLR) for a
specific mobile phone is handled by the STP. This has the advantage
that, as the network expands and ranges of mobile phone numbers are
assigned to different HLRs or new ranges come into service, only
the routing tables in the STP need be updated. Mobile Switching
Centers (MSCs) do not need to maintain full routing tables to all
other MSCs. FIG. 2 illustrates the functions and interfaces that
support voice services. The interface reference points are defined
in the IS-41 standard, which is incorporated herein by reference,
to ensure correct interoperation of equipment.
[0021] A typical cellular system prior to the present invention was
understood to comprise the following functional elements: [0022]
Authentication Center (AC): The AC manages the authentication
information related to the Mobile Station (MS). The AC may, or may
not be located within, and be indistinguishable from a Home
Location Register (HLR). An AC may serve more than one HLR. [0023]
Base Station (BS): The BS describes all of the radio equipment at a
single location used for serving one or more cells. The Base
Station comprises a Base Station Controller and the Base Station
Transceiver systems. [0024] Equipment Identity Register (EIR): The
EIR maintains user equipment identity information. The nature,
purpose, and utilization continues to develop and the present
inventors intend that all such uses to which these components may
be put are considered part of the present invention. The EIR may,
or may not, be located within, and be indistinguishable from a
Mobile Switching Center (MSC). [0025] Home Location Register (HLR):
The HLR is the location register to which a user identity is
assigned for record purposes such as subscriber information (e.g.
ESN, MDN, Profile Information, Current Location, Authorization
Period). The HLR may, or may not be located within, and be
indistinguishable from an MSC. The HLR may serve more than one MSC.
The HLR may be distributed over more than one physical entity.
[0026] Integrated Services Digital Network (ISDN): The ISDN is
defined by the appropriate ANSI T1 Standards, which are
incorporated herein by reference. [0027] Mobile Station (MS): The
MS is the interface equipment used to terminate the radio path at
the user side. If provides the capabilities to access network
services by the user. [0028] Mobile Switching Center (MSC): The MSC
provides the interface for user traffic between the cellular
network and other public switched networks, or other MSCs in the
same or other cellular networks.
[0029] Public Switched Telephone Network (PSTN): The PSTN is
defined by the applicable ANSI T1 Standards. [0030] Visitor
Location Register (VLR): The VLR is the location register other
than the HLR used by an MSC to retrieve information for handling of
calls to or from a visiting subscriber. The VLR may, or may not be
located within, and be indistinguishable from an MSC. The VLR may
serve more than one MSC. The main feature of the cellular network
voice service when compared with POTS (plain old telephone service)
is the geographical mobility of the phone. The equipment and
interfaces depicted in FIGS. 2 and 3 perform two main functions.
First, they transmit and receive voice signals over the radio
spectrum. This is primarily the function of the Base Station and
Mobile Station, which occurs over the Urn interface. Second, they
track where each mobile phone is within the cellular network. This
is called "mobility management" and is performed by the MSC,
referencing and dynamically updating the HLR and VLR databases. As
shown in FIGS. 2 and 3, this occurs over the C, D, B, and E
interfaces.
[0031] The interfaces and standards associated with these two
functions of RF transmission and mobility management are distinct
to cellular voice services. The other interfaces connect the
cellular network to the existing land line telephone network (PSTN
or ISDN), support authentication of users and equipment (AC and
EIR), or support special features such as the Short Message Service
(as shown in FIG. 3), that are not shown in the previous figures.
These functions of network interconnection, security, and special
services are not unique to the cellular network. Similar functions
can be found in all land line telephone networks.
[0032] The generally accepted consensus standards applicable to
wireless communications systems of the type known prior to the
present invention are identified in Table 1, each of which
standards are incorporated herein by reference:
TABLE-US-00001 TABLE 1 Standards Applicable to Wireless
Communications Interfaces Applicable Standards Comments Interface
ITU/ISO ANSI/TIA/EIA A: BS to MSC interface n/a n/aIS-634 Ai: MSC
to PSTN interface X.25 SS7IS-93-A B: MSC to VLR interface X.25
SS7IS-41.2, IS-41.3 C: MSC to HLR interface X.25 SS7IS-41.2,
IS-41.3 D: VLR to HLR interface X.25 SS7IS-41.2, IS-41.3 Di: MSC to
ISDN interface ? T1.611IS-93-A E: MSC to MSC interface X.25
SS7IS-41.2, IS-41.3, IS-41.4 F: MSC to EIR interface not defined
not defined; H: HLR to AC interface X.25 SS7IS-41.2, IS-41.3 Q:
X.25 SS7IS-41.2, IS-41.3 Um: BS to MS interface, n/a n/aIS-54-B
(TDMA and which corresponds to the (AMPS), IS88 (NAMPS) air
interface IS-95-CDMA Notes: SS7 refers to the ANSI standards
T1.111, T1.112 and Tl.114. X.25 refers to ITU Recommendation X.25
and ISO 8878, ISO 8208 and ISO 7776.
[0033] Consensus standards for wireless communications networks
have been promulgated by various bodies. Table 2 identifies the
most prominent standards, each of which are incorporated herein by
reference.
TABLE-US-00002 TABLE 2 Wireless Communications Standards
NSI/TIA/EIA Standards: TIA/EIA-660 Uniform Dialing Procedures and
Call Processing Treatment for Cellular Radio Telecommunications;
Telecommunications Industry Association TIA/EIA-664 Cellular
Features Description; Telecommunications Industry Association
TIA/EIA/IS-93 Cellular Radio Telecommunications Ai-Di Interfaces
Standard; Telecommunications Industry Association TIA/EIA/IS-41-C.1
Cellular Radio Telecommunications Intersystem Operations:
Functional Overview; Telecommunications Industry Association
TIA/EIA/IS-41-C.2 Cellular Radio Telecommunications Intersystem
Operations: Intersystem Hand-off Information Flows;
Telecommunications Industry Association TIA/EIA/IS-41-C.3 Cellular
Radio Telecommunications Intersystem Operations: Automatic Roaming
Information Flows; Telecommunications Industry Association
TIA/EIA/IS-41-C.4 Cellular Radio Telecommunications Intersystem
Operations: Operations, Administration, and Maintenance Information
Flows and Procedures; Telecommunications Industry Association
TIA/EIA/IS-41-C.5. Cellular Radio Telecommunications Intersystem
Operations: Signaling Protocols; Telecommunications Industry
Association" TIA/EIA/IS-41-C.6 Cellular Radio Telecommunications
Intersystem Operations: Signaling Procedures; Telecommunications
Industrytry Association TIA/EIA/IS-732 Cellular Digital Packet Data
Specification; Telecommunications Industry Association.
TIA/EIA/IS-634 800-MHZ A-Interface Supporting AMPS, NAMPS, CDMA,
TDMA Air Interfaces; Telecommunications Industry AMPS: EIA/TIA-553
Mobile Station - Land Station Compatibility specification CDMA:
TIA/EIA/IS-95 A Mobile Station-Base Station Compatibility Standard
for Dual-Mode Wideband Spread Spectrum Cellular System;
Telecommunications Industry Association TIA/EIA/IS-97 Recommended
Minimum Performance Standards for Base Stations Supporting
Dual-Mode Wideband Spread Spectrum Cellular Mobile Stations;
Telecommunications Industry Association TIA/EIA/IS-637 Short
Message Services for Wideband Spread Spectrum Cellular System;
Telecommunications Industry Association DMH: TIA/EIA/IS-124
Cellular Radio Telecommunications Intersystem Non- Signaling Data
Communications (DMH); Telecommunications Industry Association
NAMPS: TIA/EIA/IS-88 Mobile Station - Land Station Compatibility
Standard for Dual-Mode Narrow Band Analog Cellular Technology;
Telecommunications Industry Association TIA/EIA/IS-91 Mobile
Station - Base Station Compatibility Standard for 800 MHZ Analog
Cellular; Telecommunications Industry Association TDMA:
TIA/EIA/IS-54-B Cellular System Dual -Mode Mobile Station-Base
Station Compatibility Standard; Telecommunications Industry
Association TIA/EIA/IS-136 800 MHz TDMA Cellular- Radio Interface -
Mobile Station - Base Station Compatibility Standard;
Telecommunications Industry Association ANSI T1 Standards: T1.111
Signaling System Number 7 - Message Transfer Part (MTP) T1.112
Signaling System Number 7 - Signaling Connection Control Part
(SCCP) T1.114 System Number 7-Transaction Capabilities Application
Part (TCAP) T1.611 Signaling System Number 7 (SS7) - Supplementary
Services for Non-ISDN-Subscribers T1.209 Operations,
Administration, Maintenance, and Provisioning (OAM&P) - Network
Tones and Announcements ITU-T Standards: T.50 International
Reference Alphabet (IRA) formerly Alphabet No. 5 (or IA5) Other
Related Documents: SR-TSV-002275 Notes on the LEC Networks; Bell
Communications Research Inc. TR-NWT-000776 Network Interface
Description for National ISDN-1 Customer Access; Bell
Communications Research Inc.
In addition to the above services, many wireless communications
networks also feature Short Message Service (SMS). SMS includes the
following additional elements: [0034] Message Center (MC): The MC
stores and forwards short messages. The MC may also provide
supplementary services for Short Message Service. [0035] Short
Message Entity (SME): The SME composes and decomposes short
messages. The SME may be implemented in many ways, such as an
operator assisted service or interactive voice response service. An
SME may, or may not be located within, and be indistinguishable
from, an HLR, MC, VLR, MS, or MSC. The interface reference points
in FIG. 4, which support the Short Message Service, are: [0036]
Interface M is the SME to MC interface; [0037] Interface N is the
MC to HLR interface; and [0038] Interface Q is the MC to MSC
interface.
[0039] FIG. 3 depicts a cellular network, of the type known prior
to the present invention, which further comprises a Message Center
(MC) and Short Message Entity (SME), in addition to the
infrastructure shown in FIG. 2. SMS is a data service available
over the AMPS network. It is defined in IS-41, and is included
under voice services because it is an integral part of the IS-41
specification. SMS allows a single packet of data to be transmitted
to or from a mobile phone. SMS does not require packet
fragmentation or re-assembly. Message integrity must be maintained
across all interfaces, including the air (Urn) interface. The SMS
attempts to deliver the message whenever the mobile phone is
registered on the cellular network, even when the phone is engaged
in a voice or data call.
[0040] By early 1998, although the market continued in what Porter
defines as its growth stage, some of the constraints imposed by the
accepted cellular operation model had become apparent to the
present inventors. Existing cellular business models in the United
States had become stagnant. Only one business model as the McCaw,
"AMPS" model--had come into widespread use and the growth of the
wireless market had been limited to relatively price-insensitive
users based upon that model. Accordingly, the present inventors
perceived that known business methods limit future growth. These
constraints include price, access to credit-challenged users,
ability of users to control their monthly expenditures under prior
billing models, high network operating costs, high back office
support costs, high capital costs, low capital utilization, and
other related limitations.
[0041] Capacity constraints were widely perceived to be a problem.
Yet, the only apparent technical solutions were approaches to
expand peak system capacity. Techniques to utilize existing
capacity more efficiently, or using emerging technology through
modification of the business model, were unknown.
[0042] For example, Motorola and Qualconmi have both been very
active in advancing the development of cellular technology.
Kaschke, et al., U.S. Pat. No. 6,078,821, discloses a cordless
radiotelephone system having an extendable geographic coverage area
and a method therefor. Cukak, et al., U.S. Pat. No. 6,058,106,
discloses a method for providing a centrally coordinated
peer-to-peer wireless communications network. Smith, et al., U.S.
Pat. No. 5,432,780, discloses a high capacity sectorized cellular
communication system. Willkie, et al., U.S. Pat. No. 5,956,651,
discloses a cellular telephone interface system for AMPS or CDMA
data services. None of these solutions, however, sought to resolve
any capacity limitations through modification of the basic
McCaw-type, cellular business model, described above.
[0043] Hence, prior to the present invention, entrenched business
and pricing models limited the attractiveness of cellular services
primarily to business users, who were relatively insensitive to
pricing. Average Revenue Per User (ARPU) of many cellular operators
of these systems had stagnated. Most cellular networks were
employing the same business and technical models, resulting in
little relative differentiation between cellular operators.
Operators typically resisted the incorporation of new technology.
Changes in one portion of a regional or nationwide network could
have implications for the entire network. Although most systems had
been built to a relatively high peak capacity level, average
capacity utilization in most systems was relatively low. Capital
utilization was low. Customers were severely segregated based upon
pricing. Pricing, in turn, tended to restrict usage.
[0044] The cellular industry typically characterizes usage patterns
based upon the number of minutes a phone is used each month. Table
3 below, identifies typical usage patterns by the number of minutes
used per month:
TABLE-US-00003 TABLE 3 Traditional Market Segmentation Prior to the
Present Invention Based upon Minutes of Usage (MOU) Usage Minutes
of Use per Month Average Revenue per User Very Heavy >500
>$100 Heavy 400-500 min./mo. >$75 Business 200-300 min./mo.
$40-75 Consumer 100-150 min./mo. $25-40 Mass Market 15-20 min./mo.
$15-25
[0045] In a cellular network of the type known prior to the present
invention, the Mass Market customer group was considered sensitive
to price, relative to heavy users. Prior to the present invention,
due to the deficiencies of the generally accepted business model
for cellular operations, marketing efforts were not generally
devoted to this customer segment. Yet, this lowest customer segment
(in terms of usage and ARPU) is also the most numerous. Customer
growth of most systems, therefore, was inherently limited by their
business models. Design limitations prevented them from expanding
into the mass market.
[0046] These pricing constraints, and resulting constraints on
overall usage, were simply accepted by most operators. These
constraints enabled operators to reduce the overall system capacity
to a lower relative level, with the anticipation that consumers
would shift their personal economics to afford these pricing
constraints. Yet, this model did not avoid the substantial capital
cost of building networks to service peak capacity levels.
Moreover, due to the slowness of incorporating new technologies,
voice quality of cellular networks was generally considered
inferior to that of wire line networks. Hence, the prior known
cellular operations business models had failed to deliver cellular
services to the mass market, to improve quality, to reduce peak
capacity and, therefore, the capital requirements on system
networks, or to increase overall capacity utilization.
[0047] Other business approaches had been tried but these too
failed to deliver the benefits of the present invention. For
example, in about 1995, PHS introduced in the Japanese market a
strategy of pricing below other cellular providers and close to
wireline providers. PHS was successful in so called "telepoint"
applications in which subscriber density is very high. William
Webb, UNDERSTANDING CELLULAR RADIO (1998), at 183-190, which is
incorporated herein by reference. The business model was
well-received by consumers and the service enjoyed strong initial
market penetration. The user demographics shifted rapidly from
traditional business users to a mass market demographic user
profile. Nonetheless, the PHS business model failed to deliver the
unique advantages of the present invention for several reasons,
including without limitation: unpredictability of the monthly
costs; poor service quality do to inferior technology; and
chum.
[0048] Users employed the service for brief periods, then abandoned
it. This churn left the system operators with high initial costs of
securing new customers and an insufficient time of retention of
those customers to recover the acquisition cost through monthly
service charges. This experience merely reinforced the conventional
wisdom that the dominant business model, relatively high-priced
cellular service through a network designed based upon coverage and
designed to a high peak capacity usage, was the appropriate
business model for wireless communications services.
[0049] Cellular networks have been deployed that incorporate some
of the high capacity features of the present invention, but these
networks have been operated on the business model of prior known
systems. For example, networks have been deployed in both Korea
(Seoul) and Hong Kong that employ additional carrier signals to
boost system capacity. Prior known cellular systems typically
employed a single carrier signal. Adding additional carriers
substantially increases system capacity.
[0050] These two high capacity Asian cellular systems, are heavy
usage CDMA systems designed around a convention cellular usage
model, of the type known prior to the present invention. For
example, the Seoul, Korea system features up to 6 carriers, on a
CDMA network, using a substantial number of frequencies. The system
is operated by SK Telecom and serves the metropolitan area in
Seoul. Hong Kong had an AMPS and TDMA network. Hong Kong deployed
the first CDMA network system. It, too, features numerous carriers
and extremely high call capacity, due to the density of downtown
Hong Kong.
[0051] Both of these known, high capacity systems, however,
employed a conventional business model, operations method, network
and systems approach. They are designed and operated based upon
coverage, rather than capacity. They do not employ the "wireline
call model" of the present invention. They do not include the
business method, operations, network, and/or systems improvements
to address capacity, namely, providing service primarily where
people live, work, and play. Although these high-capacity networks
in Seoul and Hong Kong featured multiple carriers and substantially
more capacity than prior known systems, they did not include other
of the unique features of the present invention. They are both
"metered capacity" models, in which usage is billed based upon the
number of minutes used.
[0052] As a result of the extensive experience of the cellular
industry, by early 1998, the generally accepted business model for
operating a wireless communications network involved: primary
business users, numerous additional features for which surcharges
applied, relatively high ARPU, and widespread system coverage to
secure additional revenues from roamers passing through the system
and paying higher roaming surcharge rates.
[0053] Neil J. Boucher, in THE CELLULAR RADIO HANDBOOK (1990),
which is incorporated herein by reference, discloses a typical
demand curve for a wireless system of the type known prior to the
present invention. That curve is depicted in FIG. 4. Such a prior
known wireless system has two peak times during the day. These
occur at approximately 11 am and 7 pm, as illustrated in FIG. 4. In
addition, the changes in demand from peak time to low-usage time
are significantly high. In contrast, the demand curve for a
wireless system according to the present invention, as shown in
FIG. 5, is relatively flat and does not have the peaks and
significant deltas in demand that occur in prior known wireless
systems. FIG. 5 illustrates a typical busy hour utilization of a
preferred embodiment of a wireless system according to the present
invention.
[0054] In 1997, the present inventors began development of a new
business model for delivering wireless communications services. The
present inventors developed a new method, operations, network, and
system for delivering wireless communications services. This
invention offered low cost cellular service to a more numerous mass
market, rather than merely to a limited submarket of relatively
price insensitive business users.
[0055] Prior known wireless communications operators typically
targeted only high-end market segments, namely, heavy users and
business users, and not the consumer or mass markets. ARPU values
in the consumer ($25 to 40) and mass market ($15 to 25) were
generally understood to be substantially lower than ARPU's for
business users ($40 to 75) and heavy users (>$75). There was no
motivation to target lower ARPU customers prior to the present
invention. Addressing these consumer and mass markets through prior
business models would result in higher capital and customer
acquisition costs, lower revenues, and lower profitability. Nor was
it obvious that increasing market penetration in these consumer and
mass market segments would increase revenues. Particularly in view
of the, high initial cost of acquisition and high operating costs
of most cellular systems, customers at the low ARPU levels
associated with the consumer and mass markets would have to be
retained for long periods of time. Thus, the prior known business
methods, operations, networks, and systems failed to address the
unique problems addressed and resolved by the present
invention.
[0056] The present inventors conducted extensive studies of the
demand for cellular services. Based upon these investigations, the
present inventors discovered that there were several basic flaws
and omissions in the prior known business methods for delivering
cellular services. Specifically, rather than being an unprofitable
customer segment, the mass market and consumer markets could be
viable, provided sufficient costs were driven out of the cellular
operation.
[0057] This had not been done by prior known business methods. The
present inventors discovered that, contrary to the conventional
view, as unit price and monthly service fees fell, consumer
interest (in the mass market and consumer market segments)
increased to relatively high levels of penetration that would
support a viable business model.
[0058] In order to be profitable, however, additional costs must be
driven out of the traditional method of delivering cellular
services. Specifically, the high operating costs, high capital
costs, and relatively low capacity utilization characteristic of
prior known systems each impeded the efficiencies necessary to
serve these additional market segments. As the market had already
demonstrated, the requisite degree of cost savings was not possible
using the prior known methods of rendering cellular services.
[0059] The present inventors identified several critical factors in
achieving the cost savings necessary effectively to expand cellular
service to these additional market segments: improved capacity
utilization and reduced peak system capacity; targeted area
coverage; unproved capital utilization; channels; reduced
interconnect costs; improved back office operating efficiency; and
improved network operating efficiency.
[0060] Particularly in view of a number of recent technical
advances, capacity is highly dependent on the network technology
employed. Webb, at 101-149, which is incorporated herein by
reference. Several advances in recent years have enabled operators
to enhance capacity from existing bandwidth and use bandwidth more
efficiently, although other operators preferred legacy technology
and the associated capacities. The present inventors believe that
CDMA technology offers certain capacity advantages relative to
rival technologies. Specifically, through the use of CDMA
technology, the capacity of the system could be increased by a
factor of two in terms of calls per sector, relative to rival
technical formats. Similarly, the data rate can be increased from
about 8 k to over 100 k, with projections of up to 2.4 Megabits per
sector. The present inventors anticipate continued advances in
network capacity.
[0061] Coverage is one of the primary design criteria for any
cellular network. Prior known networks are designed to provide
extensive coverage for the basic service area, as well as for the
surrounding area and major transportation arteries. Although the
cost of this additional coverage is substantial, revenues from
roamers entering the system and using this extended coverage area
typically defray the added cost and generate substantial additional
revenues in prior known cellular systems. The capacity and signal
strength are optimized for coverage, and in particular, in-vehicle
use. In addition, the capacity of prior known systems is typically
built out to the peak demand of the system, throughout the service
area. Although this results in higher capital cost, that capital
cost is typically recovered through roaming charges.
[0062] The present inventors, however, have designed the system
coverage based upon extensive market studies identifying patterns
of living, working, playing, shopping, and schooling ("live, work,
and play") of the primary service area. The system is designed to
provide strong signal coverage, tailored to the usage pattern in
each cell in the primary service area. The system of the present
invention is preferably designed for in-building, as opposed to
merely in-vehicle use. No capacity is built into an extended
service area or arteries. System coverage is designed specifically
for local service, without regard to roaming. Nonetheless, major
interconnection arteries are covered by the service of the present
invention.
[0063] This provides two benefits. First, the coverage area of the
present invention is typically more limited than coverage of
systems of the type known prior to the present invention, FIGS. 8
and 9 are maps depicting coverage patterns of a system prior to
implementation of a system according to the present invention and
after such implementation, respectively.
[0064] Second, rather than building peak system capacity throughout
the coverage area, the present invention tailors capacity within
each cell to expected local traffic patterns. This allows a
reduction in system cost. Fewer cells are built and the capacity of
the cells that are built is increased relative to prior known
systems. The present inventors believe that this approach enables
the system to achieve effective coverage for the service area with
only about 80% of the number of cell sites of prior known systems,
when sites that are related primarily to highway and roaming
coverage are removed.
[0065] Capital utilization is also enhanced by the present
invention as the reduced coverage sites are provided and the cost
of capacity is reduced through the use of CDMA technology. In a
preferred embodiment of the present invention, the capital
expenditure per subscriber is reduced, from 12 to 25% of the
capital expenditure per subscriber in year 1 relative to prior
known systems, to 25 to 50% of the cumulative capital expenditure
per subscriber in year 10. Moreover, due to the higher capacity
utilization of the present invention, the difference between the
present invention and prior known systems in terms of cumulative
capital expenditure per unit of usage is even more substantial. The
present inventors estimate that cumulative capital expenditure per
unit of usage (Erlang) in year 1 preferably is only about 5% to 15%
of prior known methods. In year 10, it is as low as one half.
[0066] Based upon these factors, the break even point for a network
of the present invention is substantially sooner than for a network
of the type known prior to the present invention. In the preferred
embodiment of the present invention, the break even point is 12
months, as shown in FIG. 19. The calculations illustrated in FIG.
19 are based upon the "Typical PCS Company" model, as disclosed by
the firm Donaldson, Lufkin & Jenrette IN THE GLOBAL WIRELESS
COMMUNICATIONS INDUSTRY (1999), which is incorporated herein by
reference: The present invention may achieve break even at the end
of year one, relative to year three in systems of the type known
prior to the present invention.
[0067] Channel costs of marketing cellular services comprise one of
the most significant cost elements for a cellular network. Cellular
services of the type known prior to the present invention are
typically highly diversified and segmented, featuring highly
complex pricing plans and usage models. The selling activity
requires highly trained customer service representatives to explain
the various phones available, their features, and the relative
benefits and disadvantages of the various service plans relative to
a particular customers usage pattern. All of this adds substantial
selling cost to a wireless operator. The present invention, in
contrast, features one or two phones, a simple plan, and high
volume usage. Rather than selling through specialized channels, the
present invention may sell through mass merchandise outlets.
Advertising and marketing efforts are oriented to the point-of-sale
and limit sales personnel involvement. Each of these features
further reduces the selling expense associated with the present
invention.
[0068] Interconnect costs represent a significant cost factor to
the system operator in systems of the type known prior to the
present invention. Specifically, when users are charged by the
minute, they tend to leave their phones off when they are not
placing a call in order to avoid receiving charges for unwanted
calls, or they avoid giving callers their phone number. This
results in the system operator generating far more outgoing calls
than are received within the system. In a typical cellular system
of the type known prior to the present invention; the balance
between calls generated by the user and calls received is
approximately 75% outgoing; 25% incoming. This means that there is
a greater chance of the user making a call to a number outside the
service area than of receiving one from outside the service area.
Interconnect charges, therefore, tend in the direction of the
system operator having to pay to operators of other systems fees
for outward bound calls made from users within the system.
[0069] The present invention, however, seeks to reduce
substantially interconnect charges by modifying the user's calling
patterns. As the user enjoys unlimited use, without any additional
charges for that higher use, the user tends to leave their phone
on, even when they are not making a call. The present inventors
have observed that usage patterns tend to be more balanced, in the
range of 60/40 (20 point difference), in contrast to the 75/25 (50
point difference) balance observed in prior known systems. The
present inventors believe that, over periods of several years,
usage would migrate toward a balance of 55/45 or 50/50 in a
preferred embodiment of the present invention. At that point, the
interconnect charges will offset one another, eliminating this cost
from the system.
[0070] Enhanced network operating efficiencies are another feature
of the present invention providing a benefit relative to prior
known systems. These benefits may include: reduced direct labor
costs; reduced lease costs as a result of fewer, higher capacity
cell sites; simplified operations; and improved back office
operating efficiencies.
[0071] The present invention allows the operator to reduce the
total number of cells in the system. This employs less expensive
capital equipment and improves the efficiency of maintenance and
repair activities, as both fewer cells are used and distance for
traveling to the outlying cells that have been eliminated is
reduced. As fewer cells are built into the system, lease costs are
reduced for cell towers and cell sites. The cost of the fixed
network and facilities are reduced relative to systems of the type
known prior to the present invention.
[0072] The operating model of the present invention is preferably
based upon monthly, bill-in-advance, pay-in-advance service, which
is different then the pay-in-arrears system generally used for
credit-worthy business customers or the prepaid system typically
used for consumers. The operator, therefore, is not dependent on
variable usage patterns, which result in fluctuating revenues.
Revenues are based upon service and not the specific features
employed from call to call. The revenue stream is leveled, offering
the operator greater predictability and certainty.
[0073] Back office expenses are reduced dramatically, relative to
prior known systems. One of the largest operating cost elements in
prior known systems is customer service to handle billing
inquiries. A typical cellular billing statement itemizes every call
and details the various features (roaming, call waiting, etc.)
accessed. This level of detail typically generates billing
questions and challenges, all of which must be handled in a
person-to-person discussion with the customer service department.
The cost of handling this call volume can be one of the largest
single cost elements in the back office operation of a typical
prior known system. The present invention, however, eliminates
these expenses. Credit checks are unnecessary. Account receivable
balances are not permitted to accrue. As service is flat rate and
pre-paid, there are no charges based upon the number of calls,
length of calls, and features accessed. Itemized billing statements
may be eliminated and replaced by simple flat rate hills. Accounts
receivable and collection activities eliminated, further
simplifying back office operations.
[0074] Further, the present invention substantially reduces
activation-related costs. The phones of the present invention are
sold preactivated. Each phone already has loaded into it a unique
cellular number upon leaving the factory. This reduces the effort
required to activate. Rather than supplying skilled customer
service personnel to assist in activation, activation may be
conducted by the customer upon leaving the store. This Over the Air
(Activation) Subscriber Provisioning (OTASP) feature of the present
invention substantially reduces operations costs, and simplifies
the customer's role in activating the phone. OTASP results in
substantial cost savings to the system operator.
[0075] None of these improvements were obvious at the time the
invention was made. In contrast, the incumbent business model has
been and remains based upon minutes of usage, the time of day, and
features accessed. Absent substantial elimination of costs from the
existing model, the shift to lower ARPU users is not desired by
system operators.
[0076] By combining these features in various combinations, to
expand capacity utilization and reduce systems, capital, and
operating costs, the advantages of the present invention are fully
achieved.
[0077] In his recent book, Webb presents a simple and accessible
primer on wireless communications systems. William Webb,
UNDERSTANDING CELLULAR RADIO, Artech House, Inc. (1998), which is
incorporated herein by reference. Webb describes a number of
generally accepted network design factors prior to the present
invention. Webb notes that prior known systems provided only enough
capacity for the expected number of subscribers; if needed,
additional capacity would be built into the system at a later date.
Webb confirms, that prior to the present invention: "[t]o minimize
system cost and rollout time, operators need to insure that they
use the fewest number of cell cites possible to provide the
required coverage. The problems would be familiar to the cellular
operators who expend considerable time and effort planning their
networks to use the minimum number of base stations for the
required coverage." Id. at 95. Webb further teaches that in cases
where there was not sufficient capacity in the network, "the cells
had to be made smaller." Id. at 98. Webb amplifies that "microcells
are the only way to improve capacity in city centers." Id. at
99.
[0078] Yet, the present inventors have adopted a different approach
to network design. By designing for capacity, rather than coverage,
the present inventors have been able to further reduce the number
of cells, without deploying substantial numbers of microcells. The
present inventors have found that, by aggressively managing the
cost of their wireless communications services and deploying
appropriate technology, preferably CDMA technology, they have been
able to increase capacity utilization of the network, dramatically
reduce their operating costs, pass substantial savings on to the
consumer (who enjoys not only greater access to their wireless
communications service, but does so at a lower price), and enjoy
ample margin to run the business profitably on a sustaining
basis.
OBJECTS OF THE INVENTION
[0079] It is therefore an object of the present invention to
provide a low cost wireless communications service.
[0080] Another object of the present invention is to provide a low
cost wireless communications service that is targeted to market
segments beyond the traditional heavy and business users.
[0081] A further object of the present invention is to provide a
low cost wireless communications service that is attractive to mass
market users.
[0082] An additional object of the present invention is to provide
a low cost wireless communications service that is based upon flat
rate pricing.
[0083] Yet another object of the present invention is to provide
wireless communications services at a high level of capacity
utilization of the cellular network components, relative to prior
known systems and networks.
[0084] It is an object of the present invention to provide a high
quality wireless communications service.
[0085] Another object of the present invention is to provide a
wireless communications service at a low flat rate monthly
charge.
[0086] A further object of the present invention is to provide a
wireless communications service that enables higher capacity
utilization of the wireless network.
[0087] An additional object of the present invention is to provide
a wireless communications service in a fashion that reduces peak
capacity utilization relative to prior known networks.
[0088] Yet another object of the present invention is to provide
wireless communications services that are preactivated.
[0089] Another object of the present invention is to provide
wireless communications services while substantially reducing the
customer service requirements of prior known wireless networks and
systems.
[0090] It is an object of the present invention to adapt prior
known wireless communications services to improve capacity
utilization of the network or system.
[0091] An additional object of the present invention is to reduce
peak calling capacity. Another object of the present invention is
to adapt the wireless communications services to a targeted
coverage area.
[0092] Yet another object of the present invention is to achieve
improved capital utilization from the wireless communications
network and system.
[0093] A further object of the present invention is to broaden the
channels through which wireless communications services are
marketed.
[0094] It is another object of the present invention to extend the
channels for marketing wireless communications services to mass
merchandisers.
[0095] An additional object of the present invention to reduce
system or network interconnect costs to other system operators.
[0096] Another object of the present invention is to improve back
office efficiency.
[0097] Yet another object of the present invention is to reduce
back office operating costs.
[0098] A further object of the present invention is to improve
network operating efficiency. It is an object of the present
invention to reduce network operating costs.
[0099] It is an object of the present invention to bundle long
distance service with local wireless communications services.
[0100] Another object of the present invention is to combine free
unlimited long distance service with local wireless communications
services.
[0101] An additional object of the present invention is to offer a
variety of enhanced features with wireless communication
services.
[0102] A further object of the present invention is to provide
voice mail. Yet another object of the present invention is to
provide call waiting. It is an object of the present invention to
provide paging.
[0103] Another object of the present invention is to provide data
services.
[0104] An additional object of the present invention is to provide
Internet services.
[0105] A further object of the present invention is to provide
tailored information services adapted to the individual user.
[0106] Yet another object of the present invention is to model
subscriber behavior and adapt the services delivered to the user
based on heuristic studies of the subscriber's preferences and
behaviors.
[0107] It is an object of the present invention to provide position
location information.
[0108] Another object of the present invention is to provide
advertising to users or subscribers.
[0109] An additional object of the present invention is to
facilitate mCommerce.
[0110] A further object of the present invention is to safeguard
users' and subscribers' privacy.
[0111] Additional objects and advantages of the invention are set
forth, in part, in the description which follows and, in part, will
be obvious from the description or may be learned by practice of
the invention. The objects and advantages of the invention will be
realized in detail by means of the instrumentalities and
combinations particularly pointed out in the appended claims.
BRIEF SUMMARY OF THE INVENTION
[0112] As illustrated in the accompanying diagrams and disclosed in
the accompanying claims, the invention is an improved wireless
communications service, business method, operation method, and
network and system for delivering the same.
[0113] In one embodiment, the present invention is an improved
business method for a wireless communication system, comprising,
either alone or in various combinations, the steps of: [0114] Flat
rate billing, not based on individual minutes of use (MOU) or
number of individual calls; [0115] Unlimited use, not packaged
based on individual minutes of use or number of individual calls;
[0116] Providing service where users "live, work, and play"; [0117]
Achieving wireline phone functionality, as a replacement for the
standard wire-line phone (>800 MOU/month); [0118] Mapping
customer demand geographically, by where users "live, work, and
play" and by demographics of key market segments; [0119] Providing
service only in a pre-determined area (no roaming), along with the
potential for exchange services with other markets; [0120]
Bill-in-advance; [0121] Pay-in-advance; [0122] No service contract
required; [0123] Limited hand set and features; [0124] No detailed
billing;
[0125] Operating expense at or below about 85% of the flat monthly
fee; [0126] ARPU equal to or below about $40.00 per month; and
[0127] Deploying "islands" of service.
[0128] In an alternative embodiment, the present invention is an
improved operations and selling method, comprising, either alone or
in various combinations, the steps of; [0129] Flat Rate billing;
[0130] Bill-in-Advance; [0131] Pay in Advance; [0132] No detail
call record; [0133] Service in predetermined calling area, with no
roaming; [0134] Pre-paid long distance ("gas tank"); [0135] Simple
service offering; [0136] Centralized systems which enable
aggressive and effective cost reduction; [0137] Cost-driven (vs.
revenue-driven) operational model; [0138] Reduced churn rate to
less than 4% after three months or more (increased stickiness);
[0139] Operating expense per subscriber per month less than or
equal to about $26; [0140] Cash cost per unit less than or equal to
about $20;
[0141] Acquisition costs per subscriber less than or equal to about
$230; [0142] ARM less than $40.00 per month; [0143] Margin greater
than or equal to about 15%; [0144] Single-rate plan; [0145]
Achieving better balance in the mix of incoming and outgoing calls
to reduce interconnect charges; [0146] Reducing or eliminating
collection and bad debt expense; [0147] Reduced sales cycle time;
[0148] Phone-in-a-box, containing all the information you need on
the outside of the package; [0149] Pre-programmed phones; [0150]
Limited handset selection; [0151] Single-band phones; [0152]
Customer Activation; [0153] Wholesale discount only--no commissions
or residuals; [0154] Limited service features; [0155] Familiar
features requiring no training; [0156] Inventory kept with
distributor; [0157] Phone bundled with service; [0158] Simplified
sales process; [0159] Reduced Cost per Gross Add; and [0160]
Separate branding of an "all-you-can-eat" service (flat
rate/unlimited service).
[0161] In a preferred embodiment, the present invention is an
improved network and system for delivering wireless communications
services, comprising, either alone or in various combinations, the
steps of: [0162] Generating Erlangs per subscriber per square mile
greater than or equal to about 0.03 E; [0163] In building coverage
greater than or equal to about 12 db; [0164] Tailoring the network
to capacity; [0165] Targeting cell site deployment; [0166] Covered
Population per site greater than 4,000; [0167] Second Carrier
frequency, upon or within about three months after launch; [0168]
Frame error rate less than about 2%; and [0169] Enhanced capacity
network offering unlimited use (>800 minutes per-month).
[0170] It will be apparent to persons of ordinary skill in the art
that various modifications and variations may be made to the
business method, operations method, network and/or system of the
present invention, without departing from the scope or spirit of
the invention. For example, although service is preferably
unlimited by number of minutes of use or number of calls, service
may also be bundled in predetermined amounts, such as 400, 600,
800, or 1,000 minutes a month, or any other level of minutes per
time period. Margin may be maintained at any level that supports a
sustainable business.
[0171] Prior known bundled minute of use service offerings have
ranged up to several hundred dollars a month (ARPU) for 2,000 or
3,000 minutes of use. ARPU values of the present invention,
therefore, may be set at any level sufficient to distinguish prior
service offerings, for example, at $30, $35, $40, $45, or $50 per
month. Similarly operating expense per subscriber may be maintained
at any sustainable level below ARPU, such as $26 at an ARPU of $30
or any comparable level on the cost continuum. Similarly, the time
period of the service offering is not critical and the present
inventors intend to cover offerings at comparable rates (ARPU per
month or minutes of use per month) that may be offered for shorter
(hours, days, or weeks) or longer (multiple month, quarter, year or
longer) periods of time.
[0172] Churn may be reduced below levels experienced by unlimited
service offerings such as PHS, at any time after a subscriber has
been added, whether at 3, 4, or 12 months, or at any other time.
Acquisition costs per subscriber may be less than or equal to about
$500 or any lower level, such as $230.
[0173] The level of Erlangs per subscriber, per square mile, may be
maintained at any level greater than or equal to about 0.03 E of
prior known systems, such as 0.04, 0.05, 0.055, or higher.
In-building coverage may be maintained at greater than or equal to
about 12 db, 15 db, or 18 db, or any other level that distinguishes
the in-building coverage of the present invention from prior known
systems. Covered Population per Site may be greater than or equal
to about, 4,000, 6,000, 8,000, 10,000, or any level along a
continuum greater than 4,000. Similarly, the average number of
minutes of use per month may be maintained at any level grater than
about 400, such as 600, 800, 1,000, or any other level along that
continuum.
[0174] The Frame Error Rate may be relaxed from 1%, to 2%, or 3%,
or any other level that continues to provide effective service. The
equipment used is not critical, provided that it provides the
requisite capacity, quality, and reliability. Thus, it is intended
that the present invention cover the modifications and variations
of the invention provided they come within the scope of the
appended claims and their equivalents.
[0175] It is to be understood that both the foregoing general
description and the following detailed description are exemplary
and explanatory only, and are not restrictive of the invention as
claimed. The accompanying drawings, which are incorporated herein
by reference, and constitute a part of the specification,
illustrate certain embodiments of the invention, and together with
the detailed description, serve to explain the principles of the
present invention.
BRIEF DESCRIPTION OF THE DRAWINGS
[0176] FIG. 1 is a schematic diagram showing the relationship of a
cellular network of the type known prior to the present invention
to the public switched telephone network.
[0177] FIG. 2 is a schematic diagram showing the interrelationship
of the principal components of a cellular system adapted for voice
communications of the type known prior to the present
invention.
[0178] FIG. 3 is a schematic diagram showing the interrelationship
of the various components of a cellular system adapted for both
voice and data services, of the type known prior to the present
invention.
[0179] FIG. 4 is a graph illustrating a typical demand curve for a
wireless system of the type known prior to the present
invention.
[0180] FIG. 5 is a graph illustrating the busy hour utilization of
a wireless system of the type known prior to the present
invention.
[0181] FIG. 6 is a graph depicting the predicted change in System
RF Blocking Rate upon conversion of a system of the according to
the present invention.
[0182] FIG. 7 is a graph of estimated demand vs. capacity upon
conversion to a system according to the present invention.
[0183] FIGS. 8a-8d are maps depicting system coverage of a cellular
system prior to implementation of a system according to the present
invention.
[0184] FIGS. 9a-9d are maps depicting system, coverage of a
cellular system according to the present invention is a graph
depicting actual network performance of both a system known prior
to the present invention and a system according to the present
invention with respect to combined dropped and blocked calls.
[0185] FIG. 10b is a graph depicting actual network performance of
both a system known prior to the present invention and a system
according to the present invention with respect to dropped call
percentage.
[0186] FIG. 10c is a graph depicting actual network performance of
both a system known prior to the present invention and a system
according to the present invention with respect to blocked call
percentage.
[0187] FIG. 11 is a graph of the usage distribution for the teen
segment, as contemplated by the present inventors.
[0188] FIG. 12 is a graph of the usage distribution for the college
student segment, as contemplated by the present inventors.
[0189] FIG. 13 is a graph of the usage distribution for the
secondary income spouse segment, as contemplated by the present
inventors.
[0190] FIG. 14 is a graph of the usage distribution for the new
wage earner segment, as contemplated by the present inventors.
[0191] FIG. 15 is a graph of the usage distribution for the blue
collar segment, as contemplated by the present inventors.
[0192] FIG. 16 is a graph of the usage distribution for all other
users, as contemplated by the present inventors.
[0193] FIG. 17 is a graph of the usage distribution for all users
comparing predicted data with the actual data.
[0194] FIG. 18 is a slide illustrating the break even point for an
implementation of a system according to the present invention.
[0195] FIG. 19 is a Table comparing the expected relative Capital
Utilization requirements between GSM and CDMA systems of the types
known prior to the present invention and the present invention.
[0196] FIG. 20a is a chart illustrating the re-engineering of the
cost structure of a wireless system according to the present
invention.
[0197] FIG. 20b is a chart illustrating the re-engineering of the
cost structure of a wireless system according to the present
invention.
[0198] FIG. 21 is a flowchart depicting the process flow through
the back office of a preferred embodiment of the present
invention.
[0199] FIG. 22 is a flowchart depicting the process of set up and
activation of a preferred embodiment of the present invention.
[0200] FIG. 23 depicts a process for adjusting the financial
aspects of an account, for a preferred embodiment of the present
invention.
[0201] FIG. 24 is a flowchart depicting how to add a phone to an
account in a preferred embodiment of the present invention.
[0202] FIG. 25 is a flowchart depicting how to change general
information on an existing account in a preferred embodiment of the
present invention.
[0203] FIG. 26 is a flowchart depicting a process for changing a
phone number and adjust acceptance of optional features in a
preferred embodiment of the present invention.
[0204] FIG. 27 is a flowchart depicting a process for changing
credit card information in a preferred embodiment of the present
invention.
[0205] FIG. 28 is a flowchart depicting a process for changing
recurring credit card payment information in a preferred embodiment
of the present invention.
[0206] FIG. 29 is a flowchart depicting a process for transferring
a phone in a preferred embodiment of the present invention.
[0207] FIG. 30 is a flowchart depicting a process of "hotlining"
and the process of restoring hotlined service in a preferred
embodiment of the present invention.
[0208] FIG. 31 is a flowchart depicting a process for removing a
phone from a multi-phone account in a preferred embodiment of the
present invention.
[0209] FIG. 32 is a flowchart depicting a process for disconnecting
a phone in a preferred embodiment of the present invention.
[0210] FIG. 33 is a flowchart depicting a process for dealing with
frequently asked questions in a call center of a preferred
embodiment of the present invention.
[0211] FIG. 34 is a flowchart depicting the steps involved in
handling billing questions in a preferred embodiment of the present
invention.
DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENTS
[0212] Reference will now be made in detail to a preferred
embodiment of the improved business method of the present
invention, an example of which is illustrated in the accompanying
drawings. First, the basic concept of the service offering of the
present invention will be discussed in broad, functional terms.
Next, examples will be given of the operation of the invention with
respect to various embodiments, namely: a business method, the
operations method, and the network and system of the present
invention, identifying preferred elements of each embodiment.
Additional detail will be provided with respect to the operations
method of the present invention with particular attention to a
preferred embodiment of the customer service functions of the back
office. Third, the conversion of a system of the type known prior
to the present invention to incorporate features of the present
invention will be discussed.
Basic Concept of the Service Offering
[0213] The present invention comprises a realigned service offering
for wireless communications services. One objective of the present
invention is to develop a high-value, fixed-price, wireless
communication service offering that features high voice quality, is
directed to the mass market, and succeeds in realigning the service
offering to the lowest cost position. Specifically, the present
inventors have developed a new business model that is targeted at
achieving high subscriber penetration, namely greater than 10 or 20
million nationwide. This level of penetration, however, cannot
readily be achieved by focusing only on high-end business
users.
[0214] One component of the present invention, therefore, is to
develop an "every day" wireless focus by attracting a mass market
subscriber base. The business method of the present invention
relies upon the unique combination of technology, operations, and
network engineering to achieve the objects of the invention. In a
preferred embodiment, the invention employs CDMA one technology in
an optimal manner, to gain maximum competitive advantage from the
technical features and advantages that CDMA offers. CDMA technology
greatly enhances the capacity of the network. By providing a flat
rate unlimited access offering, the present inventors are able to
exploit the inherent technical advantages of CDMA to achieve higher
capacity utilization than was typical of systems of the type known
prior to the present invention. This provides a vehicle for
wireless mass communication.
[0215] The networks of the present invention may be deployed as
"islands"--isolated from sister systems by a geographic area where
service is not available. The "islands" of the present invention
may be determined based upon market studies. By deploying the
network on an "island" basis, the present inventors are able to
exploit the latest developments of the technology building an
incremental installed base in each new service area in which they
offer their services. This allows the present inventors to
capitalize on future technical gains, on a local, regional, and/or
national basis, and to improve isolated islands without widespread
disruption of a larger network.
[0216] The present inventors anticipate that the business method,
operations method, and network of the present invention will evolve
as their service offering matures. Initially, local and toll
calling, voice mail, and long distance service (to be provided by
others) are offered in a local metropolitan area. Additional
features may be provided, such as call waiting, call forwarding,
call barring, and call conferencing. In addition, data products may
be available in the form of information, sports, stocks, weather,
and any other information of interest. This could be based on
Internet-provided content or content from any other source that is
housed on or linked into the wireless communication network.
Advertising feeds could be supplied over Short Message Service
(SMS) or other methods.
[0217] In the next phase of evolution of the invention, the present
inventors anticipate internalizing long distance service within the
product offering and providing a unified message product on a
regional basis. One of the features that enables the present
inventors to hold costs down is the lack of "roaming." Nonetheless,
exchange services could be offered between networks of the present
invention on a regional or national basis.
[0218] As was the case with the initial stage, call waiting, call
forwarding, call barring, and call conferencing may all be offered
at this stage. In addition to basic data information (information,
stocks, sports, weather, etc.), the present inventors anticipate
that enhanced information download services would be provided at
this next stage. In addition to providing advertising feeds over
Short Message Service (SMS), advertising feeds could be provided
over voice, or alternative technologies. In addition, greater
customization could be built into the subscriber unit, providing
the customer additional options.
[0219] The present inventors anticipate that in the third stage of
evolution of the invention, long distance service would be provided
over IP protocols, across the footprint of those networks deploying
the invention. This could occur on a national basis. All of the
call waiting, call forwarding, call barring, call conferencing, as
well as additional features may be included. Further, mobile data
product offerings may be developed to enhance the information
download service and basic information services. Advertising may
continue to be provided, as appropriate. In addition, as the path
of evolution progresses, the present inventors anticipate handset
exchanges and upgrade programs would be implemented in order to
allow consumers to continue to exploit the most advanced technology
and service offering.
[0220] The realigned service offering of the present invention
features a number of discrete components that enhance its
attractiveness to the customer and its effectiveness as a network,
as a method of operation, and as a business model. These include,
without limitation: [0221] Designing the network for capacity,
rather than merely geographic coverage. [0222] Providing coverage
primarily in the areas where the users substantially live, work,
play, shop, go to school, and undertake most of their day-to-day
activities, and principal small corridors between them. [0223]
Achieving efficient capital utilization of the network. [0224]
Pursuing an enhanced channel strategy in order to reduce the cost
of selling and delivering the services to the lowest reasonable
point. [0225] Managing variable interconnect costs to eliminate he
net outflow of interconnect charges that might otherwise occur.
[0226] Improving back office operating efficiency. [0227] Enhancing
network operating efficiency. [0228] Increased capacity is an
important function of many of the embodiments of the present
invention. Table 4 provides some approximations of the capacity, in
terms of simultaneous calls per sector/carrier for various
telephony applications.
TABLE-US-00004 [0228] TABLE 4 Simultaneous Calls Per Sector Carrier
Capacity By Application Application Present Future Mobile 15 18
Mixed 19-20 23-24 Fixed 24 28 Present Invention 19 19-28
[0229] As can be seen from Table 4, the present invention provides
in the setting of a wireless communication network some of the
capacity advantages that are available today only through a
wireline or Wireless Local Loop (WILL) telephony system and would
be available to other wireless carriers only at some date in the
future.
[0230] The present inventors believe that the use of the CDMA air
interface provides distinct advantages in achieving the preferred
capacities of the present invention. The air interface has evolved
from the IS-95A Standard (19 calls per sector) in 1998 to the
IS-95B Standard (22 calls per sector) to the current IS-95C
Standard (39 calls per sector). Present inventors anticipate
further evolution of the IS Standard to implement additional
improvements. All of these standards are backward compatible. In
addition, while the data rate available under IS-95A was only 8K,
IS-95B offered 64-115K. Is anticipated further improvements will
offer substantially higher rates.
[0231] In order to optimize the coverage of the network of the
present invention, the design objective in a preferred embodiment
of the present invention is to cover a greater metropolitan area
with a strong signal and provide a capacity advantage over systems
to the type known prior to the present invention. The signal is
designed to achieve effective levels of in-building coverage,
rather than in-vehicle coverage typical of prior known systems. The
coverage objective is to cover substantially those areas where the
lifestyle of the user leads them to work, live, play, shop, or
attend school. This is in distinct contrast to systems to the type
known prior to the present invention, in which the system was
designed for geographic coverage to enhance service to mobile users
who travel through the area. Nonetheless, the present invention
also covers, in preferred embodiments, the major interconnection
arteries within the geographic area.
[0232] In a preferred embodiment of the present invention, this
results in fewer cell sites being required to provide the requisite
level of service. For example, the present inventors anticipate
that for an example market, such as the San Diego market,
substantial reductions in the number of cells could be achieved,
while also achieving the goals of the present invention. Table 5
summarizes this effect:
TABLE-US-00005 TABLE 5 San Diego Marketplace Air The Present Touch
Sprint PBMS Invention Anticipated 181 c. 190 c. 280 155 Number of
Cells
[0233] As a result of the business method, operational methods, and
network of the present invention, the present inventors anticipate
that overall capital expenditures, both on a per subscriber and on
a per Erlang basis, can be reduced dramatically. FIG. 19 provides
information regarding the anticipated capital expenditure per
subscriber. (All dollar values used in this application are in
approximately 2000 dollars. The present inventors expressly
intended that these values would be adjusted by the user to
accommodate changes in the time value of these amounts and/or
improvements in technology that may alter the relative values of
various elements of the present invention.)
[0234] As can be seen from FIG. 19, capital expenditure is high in
the early years and fails off as each of the systems mature. The
height of the initial peak for systems such as the Power Tel (GSM)
and Sprint (CDMA) systems depicted in FIG. 19 are higher in the
earlier years than that of the present invention. The commutative
capital expenditure per subscriber for each system is anticipated
to be lower in the succeeding years as the systems mature. Yet, the
present invention retains a distinct advantage. The same pattern
appears with respect to Capital Expenditure per Erlang. The Power
Tel and Sprint systems are substantially higher in early years from
system launch than is the present invention. Similarly, the present
invention may be able to secure savings of up to two thirds in
later years, relative to the commutative Capital Expenditure per
Erlang of these prior known systems.
[0235] Channel costs are reduced in a preferred embodiment of the
present invention in a number of ways. The product offering is
preferably simple, namely, one phone featuring a limited number of
rate plans. Sales are preferably oriented to mass merchandising and
mass retail outlets, rather than dedicated specialty stores that
require higher investment in real estate and operating expense.
Advertising is directed at mass channels. Similarly, marketing
efforts are directed in areas where traffic generation is high,
such as mass merchandising retailers. Limiting the involvement of
sales personnel substantially reduces selling expenses. By
packaging the "phone-in-a-box" with all of the material marketing
information contained on the outside of the packaging, most of the
consumers questions can be answered by a review of the product
offering. The first month's service is preferably included. No
extensive and lengthy explanations are required by a specialty
sales force, further reducing selling expense.
[0236] In contrast, most operators of wireless communications
systems of the type known prior to the present invention offer the
consumer a bewildering array of options, which also serves to
increase the operator's direct selling expense. For example,
Cingular Wireless, formerly Bell South, offers several series of
wireless calling plans at the "home," "region," and "nation" level.
At the time of filing of this application, for example, Cingular
offered nine different home calling plans, six different region
calling plans, and six different nation calling plans. Each has
different monthly costs, numbers of included minutes per month,
costs of additional units per month, and included features.
Similarly, AllTell Cellular offers three local plans, five regional
plans, and six national plans all of which have different pricing,
features, and number of included minutes per month. AT&T and
Sprint offer comparable levels of diversity. Even Nextel.com, a
service provider that presents itself as offering progressive
plans, including an unlimited service plan for about $99 per month,
a price point substantially higher than that of the present
invention, offers a wide array of plans. For example, Nextel's
offering includes digital cellular service (locally, national, and
worldwide), a digital radio, business network, business
directories, messaging services, online wireless, worldwide
service, and additional service features such as: one second
rounding, caller ID, call waiting, call forwarding, voice mail, no
roaming, additional lines, three-way calling, and call restriction.
At each of its levels of rate plan, Nextel offers several options
with different pricing, numbers of included minutes, and features.
In addition, virtually all of these cellular operators offer an
array of handsets, featuring numerous features and options.
[0237] The net result of the diversity of handsets, rate plans, and
service offerings, is not only consumer confusion and bewilderment,
maintaining this array of options increases the operators' direct
selling expense. It requires the operator to maintain a highly
trained workforce at the point of sale, in order to answer and
resolve the consumer's questions. It requires substantial
inventory. The present invention avoids this complexity and its
attendant effect to complicate the sales process and increase
direct, as well as indirect, selling expenses.
[0238] The present inventors anticipate that better balance can be
achieved by the present invention on inter-connect costs than was
available through systems of the type known prior to the present
invention. The present inventors further believe that their flat
rate pricing encourages balance by eliminating minute of use-based
pricing. Specifically, the present invention may allow the
inter-connection cost balance to migrate from approximately 65/35
to 65/45 or a number closer to 50/50 over a period of years.
Although the present inventors initially anticipated that this
process may take about 4 years, the present invention has achieved
unexpected results, in which a 53/47 inter-connect balance has been
achieved within approximately a year and a half.
[0239] The present invention also obtains numerous network
operating efficiencies. In a preferred embodiment of the present
invention, direct labor cost is reduced. This is, in part, a result
of deploying fewer cells, larger cells, and using less equipment.
Similarly, lease costs are reduced. This is a result of the
reduction of the number of cell sites and towers, as well as a
reduction of the level of investment required for fixed network and
facilities. The simpler operating model of the present invention,
relative to prior known systems is enhanced by the use of larger
cells, flat monthly rate structures versus minutes of use
revenue-based structures, and basic services versus feature-driven
pricing. Back office operating efficiencies are enhanced and cost
reduced due to simplified prepaid product offering.
Components of the Business Model; Operations; and Network and
Systems Embodiment
[0240] The present invention comprises various embodiments, that
may be used separately, or in combination with one or both other
embodiments. Viewed generally, the embodiments of the present
invention are as: a business model; operations; and network and
system. In turn, those embodiments each comprise one or more
functional elements. These elements may be used separately, or in
combination with one another, or elements of one type of embodiment
may be used in combination with elements of the others.
[0241] The business method embodiments of the present invention
comprise innovations in one or more of the following areas:
business method; economic model implementing that method; capital
utilization; "all-you-can-eat" pricing model; capacity driven
service; "wireline" design for capacity rather than coverage; based
upon where people live, work, and play; and various operational
features and functions.
[0242] The operational embodiments of the present invention
comprise one or more of the following features: marketing; brand
strategies and implementation; selling channels; sizes,
configurations, and locations for selling; product design and
selection; phone selection; phone activation; appropriate staffing
in each functional area and balance between each functional area in
order to achieve the cost advantage of certain embodiments of the
invention; driving substantial cost components out of, or at least
down relative to prior known cellular systems; financial modeling;
back office operations; billing; financial models; call center;
customer service; maintenance; and Network Operations Center
("NOC").
[0243] The network and systems embodiments of the present invention
comprise: network design; equipment; systems; traffic modeling;
growth; deployment; systems integration; maintenance; and financial
modeling.
[0244] Turning now to each of these basic embodiments, it will be
apparent to persons of ordinary skill in the art that each of such
embodiments may in turn be embodied in various ways. The assignee
of the present inventors has embodied various aspects of the
present invention in a service offering in the Chattanooga, Tenn.
market, that is sold under the "CRICKET" brand. The business
method, operations, and network and systems of the present
invention have been referred to by the present inventors as the
"Cricket Model."
[0245] The business method of the "Cricket Model" features any one
or more of the following improvements: simplified back office;
network design for in-building coverage; lower marketing costs; and
flat-rate fee for service. The Cricket Model offers "wire line"
type service on a cellular network, namely, it provides service
where people "live, work, and play." The system is designed for
"capacity" rather than "coverage." This business model, however, is
very different in many respects from the model for cellular systems
of the type known prior to the present invention. Consequently, the
Cricket Model was received skeptically by persons skilled in the
wireless industry, who were experienced with more traditional
cellular models.
[0246] The operations of the present invention differ in any one or
more of a numerous respects from the operations of cellular systems
of the type known prior to the present invention. These operational
features have been referred to by the assignee of the present
invention as the "Cricket Differentiators". These include, but are
not limited to: call center; customer operations; internal
infrastructure; long distance; voice over IP; billing; trouble
ticketing; and Network Operations Center (NOC).
[0247] The operations of the present invention involve a number of
improvements relative to prior known cellular systems. The billing
system is modified and improved. The format, customer service
screens and interfaces, and return and repair functions are
improved. Simplified "one-line billing" is preferred. The billing
is based upon a flat rate for cellular service. Preferably, the
rate is low enough to attract additional users who are eliminated
by traditional metered billing formats based upon minute of use
charges. Payment is requested in advance, eliminating or
substantially reducing accounts receivable. Service is terminated
for non-payment, eliminating or reducing collections
operations.
[0248] The present inventors anticipate serving market segments
that operators of wireless communication systems the type known
prior to the present invention have either failed to serve, or in
which they have shown limited or no interest. In particular,
individuals residing in households with incomes less than
approximately $75,000 per year, generally have not been a target of
marketing efforts by prior known cellular system operators. This is
primarily because the targets of those systems have been business
and heavy users who are relatively insensitive to price.
Individuals who do not have credit or whose credit is challenged
are also not well served by systems of the type known prior to the
present invention. Many system operators require credit checks as
well as execution of a formal cellular services contract with
consumers. Credit checks alone may eliminate 30 to 60% of potential
customers.
[0249] The present inventors have identified a number of
demographic segments that they believe have been under served or
not been the subject of significant interest by operators of prior
wireless communication systems. These include, without limitation:
New wage earners (age 25 to 35); Blue collar workers; Secondary
income spouses; College students; and Teenagers. The present
inventors have developed demographic profiles of each of these key
market segments and have found certain features that tend to
characterize these various segments. New wage earners are likely to
move residences frequently. They likely spend discretionary time
outside of their primary residence. They focus on convenience and
usage. In addition, the present invention may readily become their
primary phone.
[0250] Blue-collar workers tend to have a more stable residence.
The present invention allows easy and convenient outbound
communications. Business usage tends to be limited in this segment
and usage instead tends to focus on friends and family. The present
inventors anticipate that, in this market segment, the present
invention will evolve to become the primary phone in approximately
18 to 24 months of usage.
[0251] Secondary income spouses also tend to have stable
residences, Nonetheless, they tend to be very mobile within a local
area, particularly with their children. They are looking for
affordable convenience. Although they may expect limited usage of
the phone, they tend to evolve into a pattern of primary usage of
the wireless phone of the present invention in a period of 24 to 36
months.
[0252] College students tend to move their residence frequently,
and are unlikely to be in any one place for an extended period of
time. This market segment was generally overlooked by operators of
conventional systems prior to the present invention due to the high
churn rate at the end of semesters. This group tends to use
wireless communication services for convenience and tends to use
the phone heavily. It quickly becomes their primary phone.
[0253] Teenagers also tend to exhibit a stable pattern of residence
but are looking for ways to assert their independence. The present
invention provides convenience and privacy and quickly becomes
their primary phone.
[0254] Some of the features of traditional wireless communication
systems are particularly ill-suited for these market segments. For
example, traditional operators tend to require extended (for
example, one year) contracts. Credit checks may prove problematic
for certain individuals. The present invention, eliminates these
disadvantages. As a result of the realigned service offering of the
present invention, neither pre-subscription contracts nor credit
checks are necessary. Although they could be employed, they tend to
increase costs and limit the demographic segment to whom the
services may be extended.
[0255] In the present invention, training procedures are modified
and implemented. In addition, improvements are implemented to bring
cost per gross add down to preferred levels. The sales strategy
approaches high volume, low value channels that were typically
shunned by conventional cellular operators. Indirect selling is
implemented.
[0256] In a preferred embodiment of the present invention, company
stores are modified and adopt a unique look and feel as well as
format and style. Indirect costs are managed, in order to drive the
cost of selling to the lowest possible level. Mass merchandising
channels may be used. In addition, the offering of products
(phones) service packages, accessories, and functions is curtailed
to simplify the offering and reduce costs. The processes and
procedures employed in selling are modified to reduce the cost to
convert a new customer to the service of the present invention.
[0257] Customer service is improved to lower acquisition cost.
Over-the-air activation is implemented to enable mass merchandising
channels and reduce or eliminate activation costs. In order to
overcome the substantial biases of the industry toward the prior
known models and methods, the present inventors implemented
orientation, training, and educational materials and programs.
Office space costs were reduced in view of the favorable cost
structure the invention offers.
[0258] The assignee of the present inventors has also included long
distance service within the present invention. The long distance
service of the present invention is preferably pre-paid. The
assignee of the present invention accepts payment by credit card
and cash, and envisions that various alternative payment plans may
be included within the present invention, including, without
limitation: monthly billing; automatic debiting of credit cards;
over-the-air purchase authorization and payment; and any other
appropriate billing and payment mechanism. Long distance traffic is
routed from the user's phone, to the switch of the present
invention, to a dedicated long distance service box, the balance in
the user's pre-paid account ("gas tank") is then checked and, if
the user's balance is adequate, the call is routed through a long
distance service provider.
[0259] Some preferred embodiments of the present invention include
an internal network to facilitate the operational improvements of
the present invention at reduced cost. These may include: billing;
hot lines; call center; trouble ticketing; NOC; and engineering.
The internal network of the present invention offers substantial
advantages. It is preferably a "voice over IP" network. It operates
as a Frame Relay network. Market hubs are connected to regional
offices, which are in turn connected to assignee's operation center
San Diego. This internal network provides data and opeational
support, as well as Voice over IP service, within assignee's
operations. The present inventors anticipate that this internal
network could also carry local or long distance traffic relating to
the "Cricket" business model, operations, and network and system of
the present invention.
[0260] The network and systems of the present invention are adapted
to provide capacity to service users where they live, work, and
play, rather than coverage of a geographic area, as in prior known
cellular systems. These features are depicted in the maps, as shown
in FIGS. 8 and 9. To accomplish this coverage pattern, the
footprint of the system is modified relative to prior known
cellular systems. Specifically, the coverage footprint of the
present invention is a function of density, competition, and
locations and attractions where those users live, work and play
within the service area. The system design was adapted to provide
high capacity in those areas, at the expense of low usage portions
of prior known cellular networks where capacity may have been
maintained for roaming use. This can be seen by comparing FIG. 8
(pre-cut coverage) with FIG. 9 (post-cut coverage). Although
various of the embodiments of the present invention could offer
roaming, it is not a critical or essential element of the present
invention and is eliminated from preferred embodiments.
[0261] The "capacity" vs. "coverage" feature of the present
invention is implemented through various design criteria: adding
cells in downtown areas; rework of network design to focus on
traffic patterns; modification of the equipment; modifying the
geographic extent of coverage; and altering the amount of traffic
various cells are carrying in the system. In order to implement
some of these improvements, some users' phones were changed out to
enable the system to enhance capacity.
[0262] The network modifications of the present invention, relative
to prior known inventions, include a number of modifications to
improve capacity. For example, the "in-building" coverage of the
network is improved, relative to "in-vehicle" bias of most prior
known systems. The present invention pays particular attention to
improving capacity at malls, buildings, intersections, and other
locations where people live, work, and play. Cell sites and their
placement are improved. The system is tailored to "capacity,"
rather than "coverage" based upon load analyses, switch statistics,
and other functional aspects of the system. These improvements.
were arrived at empirically and through the use of various modeling
techniques that are unique to the present invention.
[0263] The specific improvements comprise various stages and types.
The inventors implemented Enhanced Variable Rate Code (EVRC)
technology. According to the present invention, high usage
subscribers are offered improved equipment to enable the network to
exploit these capacity improvements. The present inventors have
selected Lucent equipment for various reasons, including
reliability, and capabilities of that equipment, relative to other
network components. The inventors have added a second carrier
signal and anticipate adding additional carriers as the need for
additional capacity grows.
[0264] When the present inventors deployed the "Cricket" business
model in the Chattanooga, Tenn. market, they took over from the
prior system operator, ChaseTel, That system incorporated a
traditional design of the type that was known in the art prior to
the present invention. The "Cricket" business model, however,
requires increased capacity to handle a higher anticipated number
of users and higher levels of use than anticipated by prior known
metered-use based systems. The present inventors, therefore, found
the existing business model, operation, and network and system of
the ChaseTel system to be poorly adapted to the present
invention.
[0265] Some of these shortcomings exhibited as a high rate of
dropped and blocked calls, as shown in FIGS. 10a-c. These failures
resulted because the prior system was not adapted to optimal
placement and sizing of cell sites, inadequate capacity, and an
existing design bias toward coverage and in-vehicle use, in
contrast to capacity and in-building use. This resulted in
substantial over-subscription of the switch and high blocking
levels.
[0266] The present inventors implemented various modifications to
adapt the existing Chase network to the "Cricket" business model,
operations, and network and system. Erickson's proprietary "Smart
Rate" III service version of EVRC was instituted, increasing
capacity modestly. The present inventors subsequently implemented
Dickson's "Smart Rate" IV service which provided additional
capacity improvements. The Frame Error Rate was relaxed.
Traditional operators maintain a Frame Error Rate at about 1
percent. The present inventors believe that the Frame Error Rate
may be relaxed to about 2 percent (or potentially 3%), increasing
systems capacity, without significant degradation of signal quality
and quality of service.
[0267] The present inventors modeled the behavior of the network
and modified the size and location of cells. The present invention
employs various modifications and variations in the design of the
service area to improve the capacity of the wireless services
offered. Specifically, new sites were defined, some sites were
moved or modified, sites were removed from service, and new sites
were added. The present inventors also replaced equipment to add an
additional carrier and anticipate that further additional carriers
may be added as capacity demand grows.
[0268] The improvements of the present invention enable the
wireless network to achieve increased capacity utilization. The
present invention tends to increase substantially individual user
call volume. By eliminating the increased cost of additional calls
and service at particular times of day, users tend to use their
phone more and at more varied times throughout the day. This
increase in overall call volume enables the network and systems
components to be utilized more fully, throughout a greater
proportion of the day, resulting in increased capacity
utilization.
[0269] Although user demand is increased in the present invention,
that demand is spread more evenly throughout the day, reducing the
peals calling capacity of the system relative to prior known
wireless communications networks and systems. As peak demand is
reduced, so too are the capital and operational constraints in
meeting the former peak demand.
[0270] The present invention targets the coverage area to a more
limited geographic area. Rather than emphasizing coverage
throughout as wide an area as possible, the present invention
emphasizes capacity to handle the demands of the local area. In a
preferred embodiment, the present invention is adapted to a local
calling area, based generally on the Rand McNally Trade Area (RMA),
rather than seeking extensive coverage of the surrounding area.
This more limited coverage reduces the number of cell sites and
reduces the capacity of the fewer remaining cells to levels needed
to service the local traffic demand, rather than building in
substantial over capacity to handle roaming.
[0271] These improvements, individually and collectively, enable
the business method of the present invention to achieve higher
capital utilization. Cells are not built in anticipation of demand
and are instead adapted to demand as it develops. Building fewer
cells reduces capital demands. Higher capacity utilization enables
the capital that is expended to be employed more efficiently.
[0272] Cellular services have traditionally been sold through
various relatively high cost channels, prior to the present
invention. Specifically, large advertising campaigns are met on the
customer end by specialized equipment and service offerings. The
present invention adapts the services to the most popular types of
cellular phones and reduces the variety of service offerings. The
need for specialized selling is eliminated. Simplified in this
manner, the services of the present invention may be sold through
mass merchandising channels that have not been exploited by prior
known wireless offerings.
[0273] Interconnection is roughly balanced in the present system by
shifting the balance of call volume from outgoing calls to other
operators to a more even balance between called made and calls
received outside the system. This is accomplished by the pricing
structure of the present invention, which eliminates or at least
reduces the disincentives of prior known systems to leaving the
phone on so that it can receive unexpected calls.
[0274] The present invention improves back office efficiency
dramatically. By simplifying billing and instead issuing a single
flat rate bill, the costs of billing are reduced from prior known
systems in which complex, detailed bills are rendered. Accounts
receivable are eliminated in certain embodiments in which the
services are pre-paid. Moreover, customer service costs are
dramatically reduced by eliminating detailed billing, and the
numerous questions and complaints that follow from message unit
pricing.
[0275] Finally, the network and system of the present invention
improve system network operating efficiency. The present invention
combines any of a number of improvements to enhance the pool of
available customers while driving costs from the system: improved
capacity utilization; reduced peak system capacity; targeted area
coverage; coverage generally based upon Rand McNally Trade Area
(RMA); improved capital utilization; channels; mass merchandising
and simplified direct sales; reduced interconnect costs; reduced
back office operating efficiency; and improved network operating
efficiency.
[0276] Several of the figures provided depict the improvement in
performance of the present invention. FIG. 6 depicts the predicted
change in System RF Blocking Rate upon conversion of a system
according to the present invention. FIG. 7 estimates demand vs.
capacity upon conversion to a system according to the present
invention. FIG. 10a depicts actual network performance (in terms of
dropped and blocked calls) of both a system known prior to the
present invention and a system according to the present invention.
FIG. 10b depicts actual network performance (in terms of dropped
and blocked calls) of both a system known prior to the present
invention and a system according to the present invention. FIG. 10c
depicts actual network performance of both a system known prior to
the present invention and a system according to the present
invention with respect to blocked call percentage.
[0277] In general, the present inventors anticipate that at no time
during any 24-hour period will the system of the present invention
be unused. Each user segment is expected to use at least 1/4 minute
of service during any given hour. Busy hour usage was spread only
between the hours of 6 AM and 10 PM. Usage patterns from 11 PM to 5
AM are expected to be lower. Table 6, below, illustrates the
population by user segment, as contemplated by the present
inventors for a typical installation.
TABLE-US-00006 TABLE 6 Population by User Segment Segment Number
Percentage Breakdown Teens 23,601 4.30% Ages 15-17 College Students
30,724 5.60% Ages 18-21 Spouse 65,086 11.85% 1/2 of Married People
>35 yrs. Old New Wage Earner 92,890 16.92% Ages 22-34 Blue
Collar 96,450 17.57% Ages 35-64 with House Hold income <$75K
Other 240,291 43.77% Ages 0-1(108,697) Retired .gtoreq.65 (77,997)
Ages 35-64 with income .gtoreq.$75K (23,452) Ages 35-64 with
roommate (30,145) Total 549,042 100.00%
[0278] FIG. 11 illustrates the usage of the teen segment. In the
teen segment, the inventors contemplate that the primary use is
after school and into the later parts of the evening. When teens
get on the phone, they will stay on it for extended periods of
time. They will use their phones in the morning to arrange rides to
school, during the clay in general, and during lunch times. As
illustrated in FIG. 11, the peak usage is between approximately 3
pm and 5 pm.
[0279] FIG. 12 illustrates the usage of the college student
segment. The users in this segment tend to awake later in the
morning than other users, and typically stay up later at night than
other segments. Accordingly, their phone use reflects this pattern.
Typically, these users will use their phone during the later
periods of the day and scattered throughout the day depending on an
ever changing schedule. As illustrated in FIG. 12, the peak usage
is between approximately 4 pm and 8 pm.
[0280] FIG. 13 illustrates the usage of the segment represented by
secondary income spouses. The primary usage in this segment occurs
while children are in school between the hours of 8 AM and 2 PM,
when users talk to friends and run errands. The users in this
segment will also have sporadic usage in the evenings to
communicate with other working family members and friends. As
illustrated in FIG. 13, the peak usage is between 4 pm and 8
pm.
[0281] FIG. 14 illustrates the usage of the segment represented by
new wage earners. This group is typically compromised of young
professionals. These users do not hesitate to use the office phone
during the day, but will use their Wireless phones on the way to
work, during the lunch period and directly after work to stay in
contact with a large group of friends. As illustrated in FIG. 14,
the peak usage is between 4 pm and 8 pm.
[0282] FIG. 15 illustrates the usage of the segment represented by
blue collar workers. This segment will use their phones on their
way to and from work, during the noon period and in the early
evening. They will not hesitate to use the office phone, if
available, during working hours. As illustrated in FIG. 15, the
peak usage is between 3 pm and 8 pm.
[0283] FIG. 16 illustrates the usage of the segment that can best
be described as "other." This segment is comprised of a mix of
people. Their usage is spread across the day with heavier usage
during the noon and evening hours.
[0284] FIG. 17 is a graph of the usage distribution for all users
comparing the modified model with the actual data.
[0285] FIG. 18 is a chart illustrating the unexpected success of
the present invention. FIG. 18 illustrates some of the substantial
advantages of a preferred embodiment of the present invention over
systems of the type known prior to the present invention. When the
Chattanooga system was deployed as a Cricket system in early 1999,
it included very few improvements and enhancements of the present
invention. During the course of the first year of deployment,
numerous improvements and enhancements were made to implement the
present invention in the Chattanooga market. Specifically, numerous
additions to the operational features were added during mid- to
late-1999, and the network components were cut over to a network
operating system of the present invention at the end of January
2000.
[0286] In spite of the fact that many of these features were
present for only a portion of the first year of operation, the
Cricket system achieved a 7.7 percent market penetration in 12
months of operation of the Chattanooga market. The costs were less
than $230.00 per customer. The support costs per average subscriber
were approximately $5.60 and the operations costs per minutes of
use was 1.3 cents. These results amplify the substantial and
unexpected results achieved by the present invention. On each of
these criteria, the performance of the present invention, both on a
market penetration basis and a cost reduction basis, far out strips
the performance of systems of the type known by the present
inventors prior to the present invention.
[0287] Part of the reason for the unexpected and substantial
success of the present invention is that it meets a long felt and
unmet need of the market for wireless communication services. While
operators of systems of the type known prior to the present
invention have focused primarily on price-insensitive business and
heavy users, large segments of the market who would use wireless
communication services at a lower price point have been ignored or
under-served. Most of this under-served segment readily uses
wireline telephony of the type offered by the Incumbent Local
Exchange Carriers (ILEC) and Competitive Local Exchange Carriers
(CLEC). The price point, however, for these types of services is
traditionally much lower than that of wireless communication
services of the type known prior to the present invention.
[0288] Table 7 illustrates a comparison of the pricing and services
and depict some of the reasons why the present inventors believe
their business method, operations method, and network have been so
successful. FIG. 7 compares the services, typical minutes of use
per month, and average revenue per user of various types of
telephony systems, namely, Cellular, PCS, the present invention,
and traditional fixed wireline service available through ILEC's and
CLEC's. This comparison reveals that, on these criteria, the
present invention approximates the level of service available from
traditional wireline service at a cost that approximates
traditional wireline service, while offering many of the same
features of other wireless communications networks. The present
inventors believe that these features explain, at least in part,
the long felt need, and substantial and unexpected success of the
present invention in the market place.
TABLE-US-00007 TABLE 7 Product Comparison Pricing Product Service
MOUs ARPU Cellular Wide footprint with feature-rich service in
digital footprint 100 $20-22 coverage area and analog services in
the rest of the covered 200 45 area. Nationwide roaming available.
Voice quality varies 500 100 and coverage is highway-focused. 1000
200 PCs Reasonable digital footprint with rich feature set. Large
100 $20-22 roaming footprint available with good voice quality. 200
40 500 90 1000 160 PCP Regional digital coverage (local and toll)
of areas where the 100 $28 user lives, works, shops, and plays with
attaching major 200 28 artery coverage. Limited feature offering of
those services 500 28 most wanted. No roaming. 1000 28 ILEC/ Fixed
traditional wireline service with local service and rich 100 $22
CLEC feature set. Toll services and extra - although nominal charge
200 22 and low penetration of services (call waiting, call
forwarding, 500 22 conference and voice mail). 1000 22
The present inventors believe that the unique combination of the
business method, operations method, and network enables the user to
derive a level of service that closely approximates that of their
wireline telephone service, at a cost that is close to their
wireline service, yet with enjoying the features of a wireless
telecommunications system. These benefits have not been offered or
obtained from any of the systems of the type known by the present
inventors prior to the present invention.
[0289] The cost efficiency of the present invention is gained in
four discrete ways. First, the technology employed by the present
invention is, in the view of the present inventors, the best
available technology for running a wireless communication system.
Second, the present invention uses the inherent advantages of CDMA
technology at its best. Systems capacity is loaded and operated at
a high level. This allows the system to exploit the air interface
at an optimal level. Third, CDMA system closely tracks minutes of
use from a wireline operation model. This allows the CDMA
technology to achieve several of the advantages of fixed
applications. Fourth, the CDMA system avoids many of the issues
that plagued prior attempts to introduce high capacity service,
such as the PHS system discussed above, Instead, CDMA provide high
voice quality and coverage similar to mobile service offerings of
the type known prior to the present invention.
[0290] Table 8 compares mobile systems of the type prior to the
present invention, standard wireline systems, and the system of the
present invention on a number of criteria.
TABLE-US-00008 TABLE 8 Comparative Performance Present Mobile
Wireline Invention Busy-hour Erlangs Business 20 me 80 me 0 me
Residential 10 me 50 me 50 me Minutes of Use (Average/Month)
Business 200-300 ~2000 0 Residential <150 ~900 950 Peak-hour
System 17-20% 10-12% 10-12% Traffic
[0291] In certain preferred embodiments to the present invention,
the present inventors consider the link budget of the network of
the present invention to be a key network planning parameter.
Another feature of the present invention that distinguishes the
invention from prior known systems is the deployment of a second or
third carrier frequency upon launch of the network or shortly
thereafter. As noted by Webb, the generally accepted approach of
wireless system operators prior to the present invention was to
install the minimum capacity necessary to service the expected
subscriber base and not to boost capacity until demand had
saturated the system, requiring capital improvements. The present
inventors, in contrast, designed their system for capacity, as
opposed to geographic coverage. In order to achieve the highest
capacity utilization, particularly in densely populated areas of
the network, a second or even a third carrier frequency may be
added from launch of the network of shortly thereafter. The link
budget of the network of the present invention reflects these
facts.
[0292] In a preferred embodiment of the present invention, the
EB/NO equals 5.5 db. This assumes reduced mobility and increased
network capacity. The maximum number of users per sector is
normally 15 for a mobile phone system of the type known prior to
the present invention. In contrast, the maximum number of users per
sector of the present invention is 19 and the average number
12.6.
[0293] Similarly, the coverage design conditions of the present
invention entail the use of a higher decibel level than in prior
known systems. In a preferred network of the present invention, the
in-home design coverage condition is 12-15 db. Similarly, in
building coverage is preferably designed at 18 db.
[0294] The present inventors have also been able to contain costs
through the use of centralized cost control techniques. By
centralizing the operation of a number of the cost centers of the
wireless communications network, the present inventors have been
able to isolate costs and procedure. In various preferred
embodiments of the present invention, procedures are standardized,
which enables the operator to reduce costs in order to achieve some
of the advantages of the present invention. FIGS. 21 through 34
depict various standardized processes of the back office operation
of a preferred embodiment of the present invention. FIG. 21 depicts
one such method of standardization. FIG. 21 is a flowchart
depicting how the cost center of the back office of an embodiment
of the present invention routes and handles call traffic. The
invention incorporates a series of process flows addressing various
issues such as: adding phones; removing phones; transferring;
suspending; long distance; restoring phone service; activating and
reactivating a phone; returns; and purchases.
[0295] FIG. 22 is a flowchart depicting the process for set up and
activation. The goal of the process is to provide service in
one-call resolution wherever possible. FIG. 23 depicts a process
for adjusting the financial aspects of an account, including
posting credit card payment, accrediting an account, crediting
phone service, or adding a charge to an account. FIG. 24 is a
flowchart depicting how to add a phone to an account in a preferred
embodiment of the operation method of the present invention. FIG.
25 is a flowchart that explains how to change general information
on an existing account in a preferred embodiment of the present
invention. The process is complete when the subscriber's
information has been verified for accuracy and the system has been
adjusted. FIG. 26 depicts the process for changing a phone number
and adjusting acceptance of the optional features offered by the
wireless system operator in a preferred embodiment of the present
invention. FIG. 27 depicts the process for changing credit card
information in a preferred embodiment of the present invention.
Similarly, FIG. 28 depicts the process for changing recurring
credit card payment information in a preferred embodiment of the
present invention. FIG. 29 is a flowchart depicting the process for
transferring a phone, in a preferred embodiment of the present
invention.
[0296] One of the features of the present invention that enables
the system operator to maintain at cost is the elimination of
accounts receivable and collections. This is accomplished through
billing and payment in advance of receipt of the services.
[0297] The present inventors have found that it is not sufficient
simply to prebill and require prepayment. In the absence of
affirmative steps to prevent accrual of bad debt, back office costs
can still become unnecessarily high. In a preferred embodiment of
the present invention, service is terminated within a short period
of time after the beginning of the month, if the user has not in
fact prepaid their service for that month. Typically, in a
preferred embodiment of the present invention, if a user has not
paid by the fifth day of the month, services terminated and the
account is "hotlined." FIG. 30 depicts the process of hotlining and
the process of restoring hotlined service to an account. Since the
hotlining and restoration is strictly a payment process on the part
of the caller, security code verification is unnecessary, further
reducing back office costs. An account may be hotlined either
voluntarily or involuntarily in the preferred embodiment of the
present invention.
[0298] FIG. 31 depicts the process for removing a phone from a
multi-phone account. FIG. 32 depicts the process of disconnecting a
phone from a single phone account. Another key feature that the
present inventors have found has helped reduce back office costs is
to detail as many of the frequently asked questions as possible,
and enable the call center to anticipate inquiries. FIG. 33 depicts
a process for dealing with frequently asked questions and updating
the standardized list of frequently asked questions when call
center personnel encounters issues that have not been previously
covered.
[0299] Another key component for reducing back office costs and
achieving the cost advantages of the present invention is a
reduction in the number of billing inquiries. This is accomplished
in a preferred embodiment of the present invention by eliminating
detailed call records. Most of the call center call traffic relates
to questions about specific calls. Elimination of detailed records
eliminates that call traffic and of the associated costs. FIG. 34
is a flowchart that depicts the steps involved in handling billing
questions, in a preferred embodiment of the present invention.
[0300] The present inventors believe that by standardizing as many
of the back office and call center processes as possible, and
imposing rigorous quality control, the costs associated with
operating the back office component of the wireless communications
network can be reduced dramatically providing a number of the
advantages of the present invention.
Adapting an Existing Network Infrastructure to the Business Model
of the Present Invention
[0301] The present inventors anticipate that in view of the
distinct and substantial advantages of the present invention,
operators of networks of the type known prior to the present
invention may adapt their existing network to the business model,
operation method, and/or network design of the present invention,
thereby expanding their level of service to customers and deriving
substantial additional revenues. Due to some of the differences in
the operations method in network design of the present invention
relative to prior known wireless communication systems,
re-engineering the cost structure of an existing network has
certain distinct advantages. The Assignee of the application is
aware of several competitors who have, after launch of Assignee's
services, attempted to copy Assignee's fixed price, unlimited use
offering.
[0302] FIGS. 20a and 20b depict several of the discreet steps that
may be used in a preferred process of re-engineering the cost
structure of an existing network to achieve some of the advantages
of the present invention. For example, the improvements in network
build-out would result in lower capital costs. Improvements in
network operations of the present invention would reduce
substantially the back office and call center costs, which results
in lower network operating costs. Customer acquisition costs would
also fall, due to the rapid, simple sales cycle and direct
distribution to a larger pool of prospective customers. This too
would result in lower cost per gross add. Similarly, with respect
to customer service, the high capacity and quality of the network,
simplified billing, and reduced reliance by the customer on the
back office operations results overall in lower back office
costs.
[0303] Nonetheless, upgrading an existing PCS-type network to
provide adequate capacity for the expected first year subscribers
for the wireless communication service of the present invention may
require substantial capital investment. Assuming approximately 6
percent penetration, in addition to the existing mobility
subscribers, upgrading may require incremental capital expenditures
equal to approximately 70 percent of the network's original
cost.
[0304] Implementing an offering of the type of the present
invention in addition to an established brand of wireless service
would tend to dilute and devalue the existing brand. Creation of a
separate brand for the offering of the present invention, on the
other hand, would avoid dilution to and devaluation of the existing
brand. It tends to be very difficult for a single organization to
effectively implement different marketing strategies aimed at
different audiences. Creating a separate brand and distinct
organization, therefore, would more likely succeed by virtue of its
single market focus. The offering of the present invention,
however, may lead to migration of high ARPU mobility customers to
the lower ARPU plan of the present invention. In addition; the
service offerings of existing wireless communications networks of
the type known prior to the present invention are focused in a
different manner than that of the present invention. Existing
mobility services tend to require broader geographic coverage and
enhanced features. In contrast, the wireless communication services
of the present invention require narrow geographic coverage,
relatively limited features, and high capacity.
[0305] Table 9 depict some of the assumptions and differences
between the present invention and a typical PCS based system
TABLE-US-00009 TABLE 9 Key Assumptions in Converting a PCS-Type
System to the System of the Present Invention Present
Assumption/Criterion PCS-Type System Invention Covered Pots 1.0 m
1.0 m Covered Area 1,200 km sq. 1,200 km sq. Cell Sites Coverage 96
96 Cell Sites Highway 10 0 Minutes of Use 325 1000 Busy Hour Days
22 24 Percent of Calls Blocked 12% 8% Erlangs Per Subscriber 0.030
Erlangs 0.055 Erlangs
[0306] Table 10 depicts some of the capital expenditure required to
convert an existing network of the type known prior to the present
invention to the business method, operation, and/or network of the
present invention.
TABLE-US-00010 TABLE 10 Capital Expenditure to Convert an Existing
PCS-Type System to Wireless Communication Network of the Present
Invention PCS-Type PCS-Type System System Present Invention Present
Invention Cell Sites Coverage 96 Additional Carriers 155 Highway
Sites 10 Additional $2.6M Optimization Total Capital $473M Total
Capital $33.6M Expenditure Expenditure
Therefore, the present inventors anticipate that it could cost 70
percent more in terms of capital expenditure to convert a wireless
communications network of the type known prior to the present
invention to the business method, operation method, and/or network
of the present invention.
[0307] In fact, other operators have attempted to copy the business
method, operations method, network, and/or system of the present
invention. In the Fall of 2000, BellSouth, AllTel, and US Cellular,
each announced the launch of unlimited service plans in the
Knoxville, Tenn.; Tucson, Ariz., and Albuquerque, N. Mex.; and
Knoxville, Tenn. markets, respectively. AllTel's offering, in
particular, provides evidence of secondary considerations
supporting the patentability of the present invention.
[0308] Although Angel had previously stated that they would not
launch an offering of the type of the present invention, upon
learning details of the Assignee's success using the business
method, operations method, network, and system of the present
invention, AllTel copied some of the critical features of the
invention.
[0309] In particular, AllTel abandoned its prior skepticism of the
invention and adopted several features of the invention including,
without limitation: flat rate billing for unlimited service at a
low level of ARPU; bill-in-advance and pay-in-advance service; and
separate branding, along with other features.
[0310] Applicant does not assert that all prepaid plan offerings
would use the present invention. For example, Freedom Wireless, the
assignee of U.S. Pat. No. 6,157,823, recently sued a number of
operators for use of a prepaid subscriber account feature.
Nonetheless, prepaid service for a predetermined number of minutes
of use could be employed along with other of the elements or
embodiments of the present invention, in lieu of the flat rate,
unlimited use elements of the present invention.
[0311] It will be apparent to persons of ordinary skill in the art
that various modifications and variations may be made to the
business method, operations method, network and/or, system of the
present invention, without departing from the scope or spirit of
the invention. For example, each of the principal embodiments of
the invention may be used separately or in conjunction with one or
another. Further, each of the various elements identified with each
embodiment may be used either separately, in conjunction with one
another, as well as in conjunction with elements of other or both
of the remaining embodiments of the present invention. Moreover,
depending on the type and disposition of the system an operator is
running, certain of the embodiments and/or elements may provide
substantial or little relative additional benefit. The present
inventors do not intend that it is necessary to adopt any
particular embodiment or all or any particular elements of any one
or more embodiments of the invention. Rather, depending on the
functionality and benefits desired, the operator may use the
inventions in various combinations of the embodiments and elements
of the invention. Various changes may be made in the network
architecture, systems, and components of the present invention, as
well as in the technology employed and standards governing the
operation of the system. The present inventors intend that their
invention would provide a viable business model to improve wireless
communication services, in spite of any differences in network
architecture, technology standards, or components, either as they
exist today or as they may be developed in the future. Thus, it is
intended that the present invention cover the modifications and
variations of the invention provided they come within the scope of
the appended claims and their equivalents.
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