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Strategies & Market Trends : The Thread Formerly Known as No Rest For The Wicked -- Ignore unavailable to you. Want to Upgrade?

To: Glenn who wrote (8088)	1/17/1999 8:45:00 PM
From: Junkyardawg	Respond to of 90042

News: AT&T MADE NATIONWIDE coverage fashionable last May by introducing its Digital One Rate. Customers on the innovative monthly plan can call anywhere in the country for 15 cents a minute. Sprint PCS first introduced flat-rate plans in 1997, but AT&T went a big step further by eliminating all roaming and long distance fees. The attractive pricing scheme has been a big hit, attracting 100,000 new customers a month to AT&T, according to consulting firm the Yankee Group. But before you run into the arms of one of the national big boys, take a long, hard look at how much time you spend on the phone and who you call. “Some people don't have a need for nationwide coverage,” says Jane Zweig, executive vice president of Herschel Shosteck Associates in Wheaton, Md., a wireless consulting firm. The biggest reason for caution is price. AT&T customers must plunk down $89.99 per month for 600 minutes of calling time to reach the Digital One Rate's 15 cents per minute. If you do not spend a lot of time traveling — or if you don't spend a lot of time on the phone, period — such a high monthly fee may not make sense. “Only about 13 percent of [wireless] usage is roaming,” says Kent Olson, a wireless consultant with the Strategis Group in Washington, D.C. The majority of wireless traffic travels within a small radius of a caller's home or home office, Olson says. Cheaper by the minute The best wireless rates are available to callers who spend lots of time on the phone each month Minutes of use per month Lowest available cost per minute* 20 $1.05 60 $0.43 100 $0.30 300 $0.16 500 $0.13 1000 $0.11 *Rate is an average for the country's top 30 markets as of December 1998. Includes monthly access fees and per-minute charges, but does not include roaming or long distance charges SOURCE: The Strategis Group Executives at Powertel, a wireless carrier serving a large chunk of the Southeast, back up those numbers. “Less than 10 percent of our customers leave our 12-state area to roam,” says Kevin Inda, vice president of investor relations at Georgia-based Powertel. Most of Powertel's customers either work for small to mid-sized businesses with a focus on the Southeast, or they are residential callers using the phones for personal use, Inda says. He concedes that the national carriers have an edge “when it comes to the Fortune 500-type plans, with people who are all over the country.” But he insists that Powertel's Southeast focus means that the company has seen “very little impact” from the national competition. Regional carriers such as Powertel, BellSouth Mobile and Omnipoint are well advised to play up their status as the “local guy” in their respective markets, analysts say. “Regional carriers offer more comfortable dealings with their local populace,” says Court Lorenzini, co-founder of wirelessdimension.com, a Web site that allows shoppers to survey and compare the wireless plans in their local area. U.S. West customers in Seattle, for instance, can get their wireless and local phone charges on the same bill and can take service complaints to local U.S. West offices, Lorenzini says. “Typically, if you look at a one-rate plan versus a local plan, it's going to be cheaper for the consumer to go with a local plan,” says Olson of the Strategis Group. That's because few consumers come close to matching the amount of usage minutes bulk plans allow. Regional carriers are also coming up with hybrid one-rate plans to steal some of the national companies' thunder. Bell Atlantic's Single Rate East offers no roaming and no long distance fees on the Bell Atlantic Mobile network that runs from Maine to Georgia. Pacific Bell Mobile Services, likewise, offers free roaming anywhere in its California and Nevada coverage areas. In the end, wireless markets are likely to stratify as regional carriers are forced to reign-in their ambitions. “Typically, all wireless companies have wanted to be everything to everybody,” says Olson. “If you're one of these regional companies, you have to decide: Are we in a financial position to offer these [nationwide] plans?” For most, the answer is no. But that is good news for wireless customers who stay close to home, since regional carriers will likely improve service and craft attractive pricing plans to maintain their appeal to customers close at hand.