Trio to handle $100M in wireless

Navy officials this week awarded one of the largest cellular phone contracts in the history of the mobile phone industry.

The deal for nationwide service with three domestic carriers has a potential value of $100 million over five years and possible larger contracts in the future. The Navy contracts with Cingular Wireless LLC, Nextel Comunications Inc. and Verizon Wireless, making it the third biggest cell phone buy in history, said Bill Marsh, chief technology officer for Traq-wireless Inc., an Austin-based company which helps enterprises manage their cell phone service and costs.

Each of the three vendors will compete for orders on the contract, which has an annual value of $20 million. Marsh said the price tag is topped only by an annual contact awarded by a "quasi-government" agency, which he declined to identify, running at $35 million a year, and a commercial enterprise with an annual wireless phone bill of about $30 million.

The Navy contract was handled by Fleet Industrial Supply Center (FISC) San Diego for Commander, Naval Installations, and will provide service to about 10,000 users, said Nannette Davis, a FISC San Diego spokeswoman. Davis said the contracts will allow the Navy to use "pooling" arrangements to get the most out of its cell phone dollars.

With cell phone pooling plans, enterprise users can control their costs by adding unused monthly minutes from individual cell phone accounts to a bucket of minutes that can be tapped by accounts that go over their allocated monthly minutes. Pooling plans are the most cost-effective way to manage wireless phone bills for an enterprise such as the Navy with thousands of users, Marsh said.

Though the FISC San Diego cell phone contract stands out as one of the largest phone service deals in history, it still leaves a large pool of Navy cell phone users unserved by an umbrella, cost-effective contract, said Rear Adm. James Godwin, director of the Navy Marine Corps Intranet. Godwin estimated that about 100,000 uniformed and civilian personnel may need cell phone service and NMCI is working with its contractor, EDS, to add cell phone service to NMCI.

While FISC San Diego estimated the number of users on NMCI at 10,000, Chris Hill, vice president of the government solutions group for Cingular Wireless, said the indefinite delivery, indefinite quantity FISC San Diego cell phone contract can accommodate about 20,000 users.

Cingular will also provide the Navy with phones, including tri-band and quad-band handsets capable of operating on the GSM standard used by Cingular in the United States and overseas, Hill said.

Verizon Wireless will offer the Navy an international phone to operate on the CDMA standard used in the company's domestic network and the GSM standard when users travel abroad, said John Johnson, a spokesman for Verizon. Verizon will also provide Navy users with secure Qualcomm Inc. phones certified to the National Security Agency TYP 1 wireless standard.

Nextel Communications did not immediately provide any details on the service or handsets it will provide to the Navy.