New Technology `BREW'-ing for Alltel Cellular Phone Users

Arkansas Democrat Gazette
November 27, 2002
Article by Dan Zehr

Alltel Corp. will roll out a new technology platform Friday that allows customers to download a range of software applications - from Tiger Woods golf to Forbes.com financial news - for use on their cell phones.

The Little Rock-based telecom company says it will begin offering the downloads based on Qualcomm Corp.'s BREW platform, which acts much like the basic operating system on a home computer. Customers with a BREW-equipped phone will be able to download a game and use it for about $2 a month, or $5 for an unlimited time. Premium offerings like Forbes.com will cost more.

The full roll out of Qualcomm's Binary Runtime Environment for Wireless® (BREW) comes after Alltel ran successful tests in three of its markets. Alltel also will begin selling the new BREW-enabled Toshiba CDM9500 phone, which comes complete with an enhanced color screen. The phones are expected to cost less than $200, according to Alltel.

The service works only in areas covered by Alltel's digital network, or regions covered by companies that employ the same type of digital network.

Most of the currently available applications are games, including Sega Snowboarding, which is an exclusive offering from Alltel. Other downloads include picture sharing software and e-mail access. The company might offer a camera phone in the next few years, said James Darcey, staff manager of Alltel's portal management group.

"On the Web and now with wireless, games were the first thing to take off," Darcey said. "Now we're adding different pieces to fill out the product line."

The move into wireless applications puts Alltel in the midst of a young but already competitive wireless applications market. Different carriers have selected a number of competing technologies to run software downloads.

Alltel joins at least 15 other wireless carriers worldwide using the BREW platform, including Verizon Wireless, the largest U.S. cell phone company. Verizon rolled out its BREW offerings with a massive "Get It Now" marketing campaign in September.

A Qualcomm official in September told Wireless Week magazine that 1.9 million subscribers were using 23 different BREW-enabled handsets.

Sprint PCS immediately countered with Openwave System's wireless application platform, or WAP system. And AT&T Wireless plans to soon offer handsets that accommodate both WAP and another platform called Java 2 Micro Edition.

About 30 million phones use the Java platform in the United States and millions more do overseas, according to the Wireless Weekreport, which quoted an official from Sun Microsystems.

Alltel's Darcey said the WAP platforms will likely settle into the lower-end phones. BREW- and Java-enabled phones will likely run in the middle range, from $50 to $400.

The upper end of wireless data services will likely continue to be covered by the $500-plus pocket PC devices, he said.

Alltel felt the BREW platform stood a step ahead of other systems, Darcey said. Qualcomm's BREW was more easily integrated with Alltel's technology and billing systems, he said.

"The consumer doesn't care what's behind the applications," said Zach Wagner, telecom analyst for Edward Jones. "They want good and useful applications that are free or very cheap. The most user-friendly [platforms ] are going to win."

Neither Darcey nor Wagner expect wireless data applications to push telecom sales in the near future. Wagner, who has a "buy" rating on Alltel stock but doesn't own any, said he expects only 10 percent of wireless users to use application platforms such as BREW.

"There's got to be some content that people are willing to pay for, and it's not out there yet," Wagner said.

But as technologies and applications develop, he said, it will help wireless companies bolster the average monthly bill. Microsoft has shown a rather keen interest in the market, and many analysts have predict a killer application - the product so popular it drives the technology into the mainstream - is in the not-too-distant future.

"It's something they [Alltel officials] have to do to remain competitive," Wagner said of the company's move into wireless software applications. "[Alltel] has a national network. They have to keep up with the national competition."