Alaska connectivity expanding: Wi-Fi and wireless make inroads in roadless areas of the state.

• Author: Colby, Kent L.
• Position: TECHNOLOGY

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The race for leadership in the Alaska communications market continues from post-war days of telegraph and teletype. Cellular One-Dobson sold its cellular or wireless business in Alaska to AT&T and the fallout of that transition was GCI (NASDAQ: GNCMA).

GCI EXPANDING

Long accepted as an Alaska-based company that provided voice, data and video communications to government, commercial and residential customers, GCI has been in the cell phone business since it was first introduced in the state. In 1979, GCI introduced long-distance competition to Alaska and now holds a 45 percent share of that market. Sans the infrastructure of cellular, GCI first opted in as a reseller of the fast-growing niche market. Aligning early on with Cellular One, the companies were right for each other--one landbased, the other wireless. There was almost no conflict and the arrangement minimized hardware expansion and investment for both.

That is, until AT&T charmed Dobson. Even though GCI provides services throughout the state via company-owned fiber optic, satellite and metropolitan area network facilities (as well as cable television, which they have expanded to incorporate cable high-speed Internet modems and telephony services), the company has not built a huge cellular network.

The original Alascom merged with AT&T in the '90s and, since then, AT&T has evolved and merged with SBC and BellSouth to become AT&T Inc. A subsequent merger with Cingular a couple of years ago, instantly created the country's single-largest wireless provider, edging out Verizon. The acquisition of Dobson created a major conflict of interest in Alaska between GCI and AT&T.

Cellular or wireless is no longer a niche. In fact, it is becoming an industry slugfest for market shares. Data from TNS Telecoms, which tracks consumer telecom bills, shows wireless edging out wire line with a 9 percent growth last quarter, while traditional phone service dropped 4 percent. Comparable numbers are not easily tracked in Alaska, but all indications are that the trend may be even quicker in the Last Frontier.

GCI, not known to take a back seat in telecommunications, has quietly moved from a wireless reseller into the wireless provider arena in a big way. In September, it purchased Alaska DigiTel. That 10-year-old company provides digital service to the Greater Anchorage, Mat-Su Valley, Fairbanks, Juneau and Kenai Peninsula areas. Additionally the company is acquiring and building...