At&T Plays The Field On Cellular Phone Standards

Hedging your bets may be a conservative strategy, but it's reaping surprising rewards for AT&T. Back in 1987, AT&T engineers couldn't agree on which one of three possible standards was most likely to be chosen for a new generation of digital cellular phones. So they built a computer-like switching system that could be cheaply adapted to handle any type of cellular transmission. In 1991, there's still no digital cellular standard. But AT&T doesn't mind: It's racking up sales from cellular-phone companies that don't want to take a chance on committing themselves to one of the competing standards.

Kenneth Leon, a Bear, Stearns & Co. analyst, predicts that AT&T's flexible technology will enable it to regain lost share quickly in the U. S. cellular-switch market. On the other hand, Motorola Inc., which resells cellular switches made by Digital Switch Corp., may lose share. Case in point: GTE Corp., traditionally a Motorola customer, picked AT&T for a $600 million digital cellular contract in December. AT&T's Jesse E. Russell, research and development manager for cellular equipment, says of his company's technology hedge: "In retrospect, we think it was a fairly good decision."

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