It’s been less than a month since PrimeCo Personal Communications jumped into Chicago’s wireless phone market, but the added competition already has prompted lower costs and new services for consumers.
Cellular services that once did little more than make and receive voice calls now are offering or soon adding voice mail, caller ID, short message paging and a host of other options previously available only on wireline phones.
Flexible pricing packages that enable customers to spend far less for wireless service also are available.
The existing cellular companies, Ameritech Cellular Services and Cellular One, say the added services and price options are certainly a response to competition, but also result from new technology that only now is making them possible.
Besides PrimeCo, newcomers to the wireless service business in Chicago include Nextel Communications Inc., which offers advanced wireless voice and data service primarily to commercial users, and AT&T Wireless, which plans to offer phone service here next year.
Another competitor, Pocket Communications Inc., has begun to build a wireless phone system for future deployment in Chicago, and the Federal Communications Commission is in the process of auctioning off more licenses for aspiring wireless phone competitors.
The multiplicity of competitors may provide so many choices as to confuse consumers, but they aren’t alone. The wireless providers themselves can find the complexity of possibilities daunting.
Because technology is spawning so many innovations in wireless phone service, the various competitors sometimes have difficulty deciding just which options to offer and how to package them.
For example, it is now possible for cellular phone owners to automatically reverse the charges on anyone who calls them, but that option has yet to catch on in the broad Chicago market.
The so-called “calling party pays” service became available in the Chicago area a year ago and has become immensely popular with paging customers. When someone calls a party who uses the service, he receives a message informing him that it will cost a specified amount to complete the call.
If the caller agrees, by punching the appropriate button on his phone, he’s billed, instead of the person receiving the call. In Illinois, callers must be informed if they’re going to be stuck with the bill.
In other places, such as California, phone companies and regulators are fighting over whether to put the feature in place without requiring such warnings.
Many Chicago-area paging customers are using this feature more and more, but few cellular-phone customers have it.
The wireless newcomer, PrimeCo, is taking a different approach, said Bob Johnson, president of PrimeCo’s Midwest region.
“The problem here is that people are reluctant to give out their wireless phone number when they know that they may get unwanted calls they’ll have to pay for. They want to retain control,” Johnson said.
“Our policy is that the first minute of every incoming call is free. That way you can get rid of unwanted calls without having to pay for them. So you can give out your number without worrying about it.”
The caller ID and voice mail features that are standard with all PrimeCo service also give customers more control, Johnson said, because they can choose to accept calls from numbers they recognize and let the rest go into voice mail to deal with later.
“We even have features where you can set a limit of how much you want to spend a month, and when you get to 80 percent of that limit, the system automatically lets you know,” he said.
PrimeCo is a partnership of four big Bell companies–Bell Atlantic Corp., Nynex Corp., U S West Inc. and AirTouch Communications Corp.–and has national reach. Because it is starting business in Chicago with new digital technology, all of its customers will be offered the full range of services as standard features.
The incumbent wireless companies are also well-financed. Cellular One is a division of SBC Communications Inc., formerly known as Southwestern Bell. Ameritech Cellular is part of Ameritech Corp., the regional Bell company based in Chicago.
Ameritech and Cellular One face the task of introducing advanced digital services to the market while continuing to serve traditional analog cell-phone customers.
PrimeCo is stressing simplicity by giving customers essentially one calling plan with two variations; Ameritech and Cellular One offer several plans.
PrimeCo customers can opt to pay $18 a month plus 25 cents a minute or pay $40 a month, get 100 minutes prepaid and then pay 20 cents a minute after that.
Ameritech and Cellular One both have a much larger selection. Ameritech’s basic plan designed for infrequent users costs $15 a month and 45 cents a minute for peak calling time and 35 cents for off-peak. The top-of-the-line plan designed for very frequent callers costs $220 a month and includes 675 minutes of peak calling time and 145 minutes off-peak. Calls beyond that cost 27 cents a minute for peak time and 11 cents for off-peak.
Cellular One’s plan for infrequent users starts at $25 a month for service and the first 15 minutes, and charges 38 cents a minute for peak calls and 24 cents for off-peak. Its plan for the most frequent callers costs $270 a month and includes 800 peak minutes and 200 off-peak minutes. Callers pay 28 cents a minute for peak calls beyond that and 12 cents for off-peak minutes.
Although the various plans make it difficult to easily compare one firm’s rates with another’s, cellular company executives say that having many different plans gives their customers flexibility to pick one that best matches individual calling patterns.
“I like being able to say that we’re offering lots of choices and many different rates to suit the needs of different customers,” said Robert Nelson, president and general manager of Chicago’s Cellular One office.
People who use wireless phones primarily for security may see a big difference in how much they pay thanks to competition, because they no longer have to sign up for long-term contracts to obtain service.
Traditionally, both Ameritech and Cellular One promoted their service by offering wireless phones for free or at very low prices in return for the customer signing up for a year at $30 a month or more as a minimum payment.
Customers who wanted the phones to use in case of car trouble or other emergencies would sign up for minimum payments of $15 to $25 a month.
Now both cellular companies offer prepay and no contract deals, whereby a person can buy a phone for $100 or more and then pay $20 or $25 upfront to buy air time in advance.
As long as they don’t have to use the phone, customers never receive another bill. For people who want their wireless phone only for emergencies, the savings can be significant.
The cellular companies want to keep current wireless phone customers who don’t use their phones a lot, said Jay Ellison, Ameritech Cellular regional vice president. The firm’s many new digital services, which are now being tested and will go on the market sometime next year, won’t distract the firm from its traditional market base, he said.
“We’re not going to degrade our analog product,” he said. “What we’re doing is making it easier for our customers to get the set of services that goes best with their lifestyles.”
Although some consumer confusion may be an inevitable result of adding more product lines, brand names and choices, the companies are striving to reduce the confusion stemming from technical jargon.
Traditional wireless phone services have been known as “cellular” because of the name of the radio architecture they use. The newer wireless technology also uses the same architecture but is called PCS, for personal communications services, largely to distinguish it from cellular.
The major difference between the two technologies is that they use different parts of radio spectrum, but this isn’t something the average customer needs to worry about. Sometime next year, the market will feature phones that will handle both cellular and PCS calling.
To emphasize its belief that distinctions intended by the technical jargon are largely meaningless to consumers, Cellular One has begun to refer to its offerings as “personal communications.”
“Our feeling is that there is nothing inherent in any of these technologies that makes a phone significantly more or less of a personal communication tool,” said Cellular One’s Nelson.
