1 Number, 1 Phone: That’s No Line
After years on the phone world’s fringes, wireless communication is making its way into the mainstream as lower prices, improved service and new features have helped to blur the line between wired and wireless services.
One of the more interesting trends is the idea of anywhere-anytime communication.
“The whole one-number, one-phone concept has been spoken about for quite some time,” said Jerry Kaufman, president of Alexander Resources Corp., a wireless consulting firm in Dallas. “This is the grand vision for wireless, and it’s a very important future capability.”
More companies are using wireless phone networks, which allow them to avoid the hassles and cost of wiring to add phone lines. Such networks also help reduce missed calls because workers have one number to use whether on the road or in the office.
“I think the inter-operability of wireless and wire line is where the next huge sea change is coming, particularly in the business world,” said Dan Hesse, president and chief executive at AT&T; Wireless. “In the consumer world, I think you’re going to see personal base stations where as soon as you walk in your house, your wireless phone becomes a cordless phone.”
With that in mind, many companies are eyeing further price simplification and “family plans,” according to Bruce Kasrel, consumer communications analyst at Forrester Research. In two years, he predicts companies will sell packages with free local calling and long-distance service costing 10 cents per minute.
In Plano, Texas, AT&T; is already offering two such plans on a trial basis.
Under one plan costing $39.99 per month, for example, Plano customers can make and receive unlimited wireless calls within the city without incurring per-minute charges.
“Most residential wireless callers spend their time within 25 miles of their house, so this could be an interesting trend to watch,” said Kaufman, the Dallas consultant.
Another company, Bellevue, Wash.-based Western Wireless, has been offering wireless home phone service in the small town of Regent, N.D. That service competes with the incumbent local phone company, which has responded by suing Western Wireless.
Technological advances will mean more phones will come equipped with e-mail and other computer functions, as well as devices and service packages that provide coverage around the world.
“Over time, more and more of voice traffic will go over wireless with a big package of bundled minutes,” said Stan Sigman, president and CEO of SBC Wireless Inc. in Texas. Still, Sigman says wireless will never completely displace traditional wires “because the quality of the service just isn’t there.”
Experts concede that while the U.S. mobile industry has grown rapidly in the last few years, the majority of calls are still carried on traditional wire lines. Less than a third of Americans have a cell phone, versus penetration rates topping 50% in Finland, according to figures from London-based Baskerville Communications.
Mobile phone use in Europe has been higher in part because of a billing structure that requires callers to pay for all connections they make, even to wireless phones.
Telecommunications regulators in the U.S. are looking into adopting the “calling party pays” concept. This would be a controversial reversal of the current system, which requires mobile phone users to pay for both inbound and outbound calls.
While that trend may not catch on, one that has is the move toward eliminating the “roaming” and long-distance charges. These typically push costs toward $1 a minute for travelers making calls outside their home region.
The industry’s move toward single-rate national pricing started with McLean, Va.-based Nextel Communications and took off last summer when AT&T; Wireless--the nation’s largest wireless carrier--adopted and expanded on the concept with its Digital One Rate plans.
Those plans, with their flat monthly fees and set per-minute pricing (without long-distance or roaming add-ons) sparked a rush to offer national service and plans with a large allotment of minutes per month.
Now nearly all the major wireless providers offer flat-rate service and high-usage plans. In California, that includes GTE Wireless, AirTouch Cellular, Sprint PCS, Nextel, Pacific Bell Wireless and AT&T; (formerly L.A. Cellular).
Under the old price system, “we were killing the ‘killer app’ for our product--the killer application being mobility,” AT&T; Wireless’ Hesse said.
Combined with expanded coverage and the industry’s adoption of better-quality digital service, the pricing shift has helped wipe out a powerful disincentive for out-of-town cell phone use. In recent months, customers have been galvanized by the realization that taking their mobile phone on trips can now save time and reduce hotel phone bills.
“If I’m going to travel, I will get [a single-rate plan]. It’s the only rational thing to do because it’s the no-roaming and no long-distance that’s important,” said Matt Weinstein, a technology consultant who lives in West Los Angeles. Weinstein estimates that with a flat-rate plan, he could save from $150 to $600 dollars a month on extra charges during periods when he spends one week a month on the East Coast.
Still, it pays to read the fine print. Some plans come with high monthly fees, some waive extra charges only in cities in which the company owns the network. Others may drop roaming charges but not long-distance or extra toll costs or may require subscribers to buy a special phone.
Many of the plans are geared toward people who make heavy use of their mobile phones. But the industry is alive with advances and experimentation, including many improvements for new and average cell phone users.
The cost of phones, for example, still ranges from “free” (with restrictions) to $200 for a standard unit. But the average phone now comes with features such as voicemail, caller ID and call waiting--capabilities once associated only with wired service.
The devices also continue to get smaller, lighter and more durable, and battery life and recharging methods have improved radically. Some phones include voice activation, while others have buttons that behave like dials or a computer mouse.
Phone makers, led by Nokia, have begun to offer U.S. customers more personality with their purchase, straying from the traditional black to add colors and patterns to the phones. Satellite phones have become portable, and business-oriented Nextel now sells a sleek version of its phone and two-way-radio device.
More changes could be in the offing as consolidation of wireless companies continues both in the U.S. and overseas. The January sale of AirTouch Communications to Europe’s Vodafone is expected to be just the first of many deals among firms seeking to gain strength and reach both in their home countries and abroad.
In the coming year, wireless companies expect prepaid wireless plans to pick up, allowing them to extend service to America’s youth--a technology-hungry group that has remained relatively untapped by the cellular industry.
On the data side, wireless service remains a poor substitute for wired access to the Internet, corporate networks and even e-mail. Because of that, the industry is pushing hard to provide reliable connections on the go.
Still, limitations on speed, ergonomics and battery life will keep the most innovative data concepts at bay for at least a year, experts say.
“It’s limited today,” SBC’s Sigman said. “But out 24 months, it will really accelerate.”
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Subscribers Up, Bills Down
As the number of wireless telephone service subscribers has skyrocketed, the average monthly bill has fallen by more than half.
Subscribers, in millions
1988: 1.61 million”
1998: 60.83 million
Average monthly bill
Note: Figures are for June of each year.
Source: Cellular Telecommunications Industry Assn.
Elizabeth Douglass can be reached via e-mail at email@example.com.