THE CUTTING EDGE: SPECIAL REPORT / HOT TIPS : What’s Coming, When, and Why It’s a Big Deal : The Betting Continues on Wireless Revolution

WASHINGTON — In the wireless communications arena, the big news of 1994 was the government’s auction of airwaves in July, in which some of the biggest names in technology bet billions of dollars that a booming mass market in wireless will soon emerge.

And the big news of 1995--at least the first month of it--will involve another, similar auction, this one for licenses even more valuable than those sold in July. Winners in the current auction of licenses for so-called broad-band personal communications services will probably be announced in January, and the victors are expected to pay the government as much as $10 billion.

But don’t hold your breath waiting for the services that will emerge from this auction frenzy. While interactive video and data service (IVDS), personal communications services (PCS) and a new type of cable service called local multipoint distribution service (LMDS) all got the green light in 1994, it will cost billions of dollars and take several years for companies to build the necessary facilities.

Providers will spend 1995 running a regulatory gantlet that will include obtaining final licensing approval from the Federal Communications Commission, getting tower construction permits from City Hall and even securing the blessings of rival utility companies that may own the rights of way where wireless providers have to string cable.

“I do not expect major developments next year,” said Bob Foosaner, a senior vice president at Nextel Communications Inc., a Rutherford, N.J., company that operates a wireless mobile radio service that competes with cellular telephone service in Los Angeles and several other cities.

Even if the latest and greatest in wireless communications won’t be quite ready yet, those who sell cellular telephone and paging services with today’s technology should continue to do a land-office business. Cellular phone companies have been adding 1,000 customers a day as the increasingly mobile and computerized American work force demands always-in-touch communications.

Cellular services face a big challenge from the new wireless entrants because analog cellular providers now are short on capacity and do not have the flexibility to carry voice, data and other communications simultaneously in a single device. Cellular carriers are scrambling to deploy digital networks that will enable them to offer similar capabilities.

All of this--implementing new services and upgrading old--represents a rare opportunity to get in on the ground floor of a major new industry, but it also promises to be frightfully expensive. So all the big phone companies are involved, along with the cable companies and many others, but alliances are the order of the day. Look for many more in 1995.

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WIRELESS

What: Cellular phones

When: All year

Why it’s important: No longer a luxury item, mobile phones will keep getting cheaper and become tools for everyone.