Survival Tips from Wireless Pioneers

By Lauren Gibbons Paul

PAGE 6

At the time, there were about 200 independent cellular carriers (each market had the local phone company plus a private carrier) covering about 90 percent of the geographic area of the North American United States. In the beginning, UPS was under contract with more than 100 cellular carriers. The cost was high. Vendors charged a lot to their few customers in order to recoup the costs of building their own networks. And managing 100 different providers was a nightmare. In order to get a reasonable price for the services and reduce the management headaches, Fields decided it would be best to get their top cellular carriers to band together in a consortium to serve UPS. The value proposition to the vendors was that it was a painless way for them to add more than 65,000 daily users to their service without much in the way of incremental cost of sale. UPS would get lower costs and less paperwork.

So Fields and other UPS IT managers approached their top cellular carriers--GTE, McCaw Cellular, Pacific Telephone and Southwestern Bell--and asked them to form a consortium called the JVMC (joint venture management committee). Asked what the initials stand for, Fields jokes, "The consortium from hell."

The rub was that the carriers operated under anti-price-fixing federal regulations that forbid collaboration among cellular carriers. Therefore, the UPS team was required to negotiate separately with each carrier. The idea was to end up at the same price without letting any carrier know exactly what price they’d reached with the others. Eight people from both sides were present at each negotiation, and UPS had to negotiate with four separate companies. Not surprisingly, the process ate up an entire year.

In the end, however, the cellular service was solid, the prices came down, and UPS was able to grow. "It was a remarkable thing. Going into it, I don’t think we had that much confidence it could be done," says Fields. The consortium still exists. Today, UPS uses the national Motient satellite network from Motient Corp. as its primary wireless provider, but it also uses the consortium as a backup when the Motient network is down and in the few areas Motient doesn’t cover.

Like Feld and Fields, Stephenson is proud of what his company built during the early days of wireless, when most companies’ field service representatives were tethered to their head offices as if by an umbilical cord. "Society was not used to wireless then. There were no cellular phones, even. It was a whole different era back then," says Stephenson.

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