The Next Hot Spots: Burgeoning Suburbs Dozens of cars, sports utility vehicles and minivans snake daily around what has become one of the most popular attractions in Lone Tree, Colo.: a new Krispy Kreme doughnut shop. Pastry lovers flocking to the shop–the first of its kind in the state–clog nearby arteries, forcing sheriff`s deputies to perform traffic-cop duties.

For longtime Colorado residents, the doughnut shop and the crowds around it are symbols of the hot-button issue of growth. Critics argue that recent arrivals are overtaxing the state`s resources and contributing to highway gridlock, smog and overcrowded schools. They point out that fast-creeping suburbs around Denver are replacing once open prairie that gave way to stunning Rocky Mountain vistas.

Lone Tree, a booming subdivision south of Denver in Douglas County, is just one example of how the nation`s larger cities are sprawling into once rural areas. These burgeoning suburbs pose new opportunities and challenges for everyone, including wireless carriers. Carriers are eager to fill in their networks to meet increased demand for services. Before they can beef up network capacity, however, they must convince detractors that wireless is here to stay and promises a new world of mobile products and services designed to simplify their lives.

Identifying major growth areas and meeting demand for voice and data services is an issue that concerns all of the major U.S. wireless carriers.

Antenna makers, tower companies and the carriers themselves say major metropolitan areas in the Northeast, the Southeast and the West Coast are still the biggest wireless hot spots. New suburbs are forcing carriers to fill in network capacity with more antennas and–when possible–new cell sites.

Carriers often find themselves justifying the existence of their equipment to residents who might not want towers in and around their neighborhoods, for aesthetic reasons or because of possible health hazards.

"We`re finding challenges with respect to zoning restrictions that two or three years ago we never expected to see," says Laura Altschul, national director of government affairs for Voice-Stream Wireless.

Increasingly, Altschul finds herself talking to state and local officials concerned with backlash against the placement of telecom equipment in new communities. The message she spreads is this: Local governments, citizens and telecom providers must work together to ensure that consumers don`t get the short shrift.

"Wireless is here to stay. This isn`t going away. The way that you deploy wireless is by putting up antennas, and you need to put antennas on something. The more people use phones for voice and data, the more facilities we need," Altschul says.

Adding Up The Costs
To accommodate growth, carriers will have to spend money.

While capital expenditures in the wireless industry dipped in the first quarter of this year–due in part to economic, regulatory and technological uncertainties–some analysts believe carriers will make up for it during the rest of the year as they forge ahead with network upgrade plans. Network operators are committed to 2.5-generation and third-generation upgrades that promise increased voice capacity and high-speed data services. As carriers add more subscribers, they will need to increase network capacity. That means they will need more equipment and cell sites. They also face rising sales, marketing, billing, customer service and distribution costs.

All this adds up to big spending. Raymond James & Associates Inc. calculates total projected wireless capital expenditures this year of almost $26 billion. That compares with capital expenditures of about $22.8 billion last year and $12 billion in 1999. According to the financial firm, the U.S. wireless industry will have spent about $60.9 billion between 1999 and 2001, slightly above the $60.5 billion spent over the entire 14-year period between its 1984 inception and 1998.

The industry saw a dramatic jump in capital expenditures between 1999 and 2000 "that was driven by additional new competitors entering the industry as well as existing competitors expanding coverage into new locations, either by themselves or through affiliate arrangements," according to Raymond James & Associates.

Because of increasing costs, collocation–or sharing tower space with other wireless providers–is becoming more attractive to carriers seeking a return on infrastructure investments. And with spectrum in short supply, carriers increasingly will need to coax all the capacity they have from their current networks, experts say.

Letting The Genie Out
Tony Bullard, marketing director for Pinnacle Holdings Inc., says more often than not carriers are seeking ways of building network capacity to meet growing demand in populated regions.

"People are still building in areas where there isn`t any network at all. But a lot of what we see is in that area of capacity improvement," he says.

As they seek to increase network capacity, wireless carriers go through several phases. They might start by adding more radios to their cell sites. Then they might try "cell splitting," or building additional cell sites to cover the same area. Next they might try collocation. The goal is to increase capacity by optimizing the spectrum available to them in a given market.

These efforts, however, can lead to other problems. Too many towers in one region can cause interference and a drop in service quality. In addition, hanging too many antennas on older towers raises the specter of structural instability, says Al Haase, CEO of SkyCross Inc., a smart antenna manufacturer. "These towers structurally aren`t able to handle the additional weight," he maintains.

Antenna makers such as SkyCross, ArrayComm Inc., Metawave Communications Corp. and Littlefeet Inc. contend that their products–which are smaller and smarter than older solutions–can increase spectral efficiency, thereby reducing the number of antennas needed in the first place.

Yuval Davidor, founder of Schema Inc., and like-minded developers believe radio-frequency engineers increasingly will be occupied by "network optimization."

Schema offers a software solution designed to allow network operators to run computer scenarios based on variables such as cell site placement and antenna direction. With the data collected, engineers would then ostensibly be able to tweak out as much capacity as possible within a given part of the network.

Recently, Schema announced it had successfully increased network capacity by more than a third in a major market test, the equivalent of adding several thousand new subscribers, without any additional cell sites or base stations.

"It`s magic, but we are not magicians. It`s just that you have so much hidden capacity in the network," Davidor says. "I`m not creating spectrum out of thin air. ... It`s in the lamp. I`m just shining it up to bring out the genie in the network."

As it is, carriers take regular snapshots of their networks to better gauge where and how they should optimize their resources. From high-tech operations centers that resemble mini-NASA command headquarters, they oversee thousands of cell sites and monitor weather and news reports for possible natural and manmade disasters.

Keith Radousky, Cingular Wireless` executive director of engineering, says the carrier runs frequent checks on its network capacity to ensure it is meeting demand. The carrier–which plans to deploy wideband-CDMA in its next-generation network–has even developed proprietary solutions to increase coverage without multiplying the number of cell sites in a particular region. Four or more times per year, engineers take a snapshot of network traffic to update their forecasts. "In addition to daily monitoring of the network, we are trending over time to make sure we have capacity," he says.

Radousky says Cingular also has deployed hundreds of microcells at suburban shopping malls and in other major traffic areas to increase coverage.

Among other reasons, carriers are migrating to 2.5G and 3G technology to improve network capacity. "We are always looking at new ways of optimizing the network," says AT&T Wireless spokesman Rich Blasi. "That`s one of the reasons we are moving to GSM. That network itself allows you to take advantage of capacity and greater speeds."

More Service, But NIMBY
For Mike Novak, CEO of CCI Telecom, a telecom infrastructure provider that deploys solutions in North America and South America, it`s no secret that wireless carriers are putting their efforts into increasing network capacity in and around large cities.

"When you talk about Houston, Dallas, Philadelphia or Boston, you can`t just look at the city limits. You`ve got to look at the surrounding areas," he says. "Obviously, when you look at the suburban areas, that`s where the cities are growing."

Novak says citizen opposition to the presence of new wireless infrastructure such as towers varies from region to region. He argues that wireless carriers, tower companies, antenna makers and others are finding innovative ways to build environmentally friendly cell sites to appease public criticism and combat the not-in-my-backyard, or NIMBY, syndrome. Well-publicized solutions include building cell sites in church bell towers or making them look like trees.

Carriers "are not just going out and saying `the heck with the neighborhood,`" Novak says. "They are working a lot better with neighborhoods."

SkyCross` Haase agrees. "I`ve been in the business for quite a long time. I`ve never seen so much attention on making antennas different colors, textures and shapes to solve that NIMBY problem," he says.

Douglas County, one of the fastest-growing suburban areas in the nation, saw its population nearly triple between 1990 and 2000, according to census figures.

Along C-470, a main east-west highway that cuts through Lone Tree and many other newer suburbs south of Denver, an antenna-laden tower looms on the horizon, sharing undulating prairie with half-million-dollar homes. Residents in the area tend to be status conscious, and Douglas County planner Brad Mueller acknowledges that the county has standards that address both aesthetic and health issues. Mueller says the county weighs requests to install telecom equipment on a case-by-case basis.

As she travels the country to lobby state legislatures and local officials, VoiceStream`s Altschul reasons for non-adversarial discussions about the placement of wireless communications towers and other equipment.

"We want everyone who wants wireless to have access to it," she says. "We need to get our digital network out everywhere where people are moving."

In Douglas County, Colo., that just might mean a long wait at a doughnut shop.

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Credit: Wireless Week