*Flat Rate Plans = Babes in the Wood* Message 7836997
Which is part of my answer to the following about Flat Rate Plans, which is okay as one plan option, but it will mean big peaks and troughs in demand. As well as flat rate plans there needs to be an auction of unused minutes like a Chicago Pork Bellies auction with the basestation handling the demand; high prices when demand is high, nearly free when things are quiet:
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wirelessdimension.com
Flat-rate plans gaining an audience
By David Whelan, Wireless Dimension
For three weeks each month, Jim Wagner criss-crosses the country as a national sales manager for a Seattle high-tech firm. Like many frequent travelers, Wagner was reluctant to use his wireless phone because he feared his carrier's hefty charges for long-distance calling and for roaming, which is industry jargon for making calls from outside his "home" calling area.
That all changed last year when Wagner began using a Digital One Rate service plan from AT&T Wireless Services. Unlike traditional wireless plans, One Rate plans never charge extra for domestic long-distance calls or for roaming. Those costs are included in the flat monthly fee.
Now Wagner pays about $120 each month for 1,000 minutes of calling, or about 12 cents per minute, regardless of whether he makes local or long-distance calls, or whether he calls from his own office or a customer's office in Miami or Minneapolis.
"I can use those minutes constantly when I'm on the road," Wagner said. "I don't even use hotel phones or airport pay phones anymore."
A new breed of "flat-rate" plans
When AT&T launched its Digital One Rate plans last May, it marked the first time any carrier had eliminated roaming and long-distance charges nationwide. The new flat-rate plans, starting at $89.99 for 600 minutes of calling, were a hit with business people and many other consumers, who began snapping them up at a rate of 100,000 each month, according to AT&T.
"Charges like roaming and long-distance tend to add unexpected costs to a wireless bill," said Fred Moran, a wireless analyst with Furman Selz. "By doing away with these costs, the plans are made more attractive to consumers."
An expanding market
AT&T competitors Sprint PCS, Bell Atlantic Mobile and GTE Wireless followed AT&T's lead by selling similar flat-rate plans. Prior to the Digital One Rate plans, Sprint had been offering no-roaming, no long-distance features as extra-cost options in some of its standard plans.
Sprint's Nationwide plans start at $69.99 for 600 minutes, and allow customers to make or receive calls from anywhere on the Sprint PCS network at local airtime rates. Sprint PCS serves more than 800 major cities in the United States. Sprint customers, however, may incur roaming or long-distance charges when calling from outside these markets.
Bell Atlantic's SingleRate plans, which start at $39.99, offer no roaming or long-distance charges within the carrier's East Coast coverage area, which stretches from Maine to Georgia. Depending upon where a customer lives, the $39.99 buys from 90 to 200 minutes of calling. Bell Atlantic also sells a flat-rate national plan, which costs $159.99 for 1,600 minutes.
Bell Atlantic "made a very effective counterstrike with their regional plans. They are outstanding plans, very appealing to consumers," Moran said.
Sprint and Bell Atlantic both claim strong sales from their national plans, but decline to release sales figures for the plans.
GTE's AmericaChoice national plans start at $95 per month for 650 minutes and allow customers to call anywhere in the country without incurring roaming or long-distance charges. GTE also introduced regional plans called HomeChoice that eliminate roaming but not long-distance charges within certain areas.
Nextel Communications, another national carrier, sells flat-rate Nationwide Business plans. Nextel differs from other carriers, however, because its phones don't work at all outside the Nextel network, meaning that users can't use Nextel phones in cities where Nextel does not offer service.
Choices, choices, choices
"You really have to look at your own usage," said analyst Kent Olson of the Strategis Group. "A lot of it depends on where you live and where you are likely to roam to."
About 80 percent of "business-user" calls and 85 percent of "personal-user" calls are made from within the user's home-service area, according to International Data Corporation's 1998 Personal Wireless Communications User Survey.
Olson suggests looking at billing statements to determine how much you spend on long-distance and roaming each month. If you need to make a lot of calls while traveling, as Wagner does, switching to a flat-rate plan might make sense.
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At a glance
Here are the flat-rate plans offered by AT&T Wireless, Sprint PCS and Bell Atlantic Mobile.
AT&T
Digital One Rate
What the analysts say: Ideal for frequent business travelers.
$89.99 for 600 minutes/month
$119.99 for 1000 minutes/month
$149.99 for 1400 minutes/month
Sprint PCS Nationwide
What the analysts say: For those who travel frequently between cities in Sprint's network.
$69.99 for 600 minutes per month
$99.99 for 1000 minutes per month
$149.99 for 1500 minutes per month
$29.99 for 120 minutes per month (available through March 7)
$49.99 for 400 minutes per month (available through March 7)
Bell Atlantic Mobile SingleRate
What the analysts say: Lower-end pricing attracts both business and consumer interest. Both national and East Coast regional plans.
SingleRate USA
$159.99 for 1600 minutes
SingleRate East
(Plan minutes vary depending on what part of the region you're in.)
$39.99 for 90 or 200 minutes
$59.99 for 400, 500 or 600 minutes
$99.99 for 1000 or 1200 minutes
$209.99 for 1800 or 2000 minutes (not available in all areas)
GTE Wireless AmericaChoice
What the analysts say: Similar audience to AT&T's plans, ideal for business travelers. GTE also features regional plans that have free roaming but not long-distance.
$95.00 for 650 minutes
$125.00 for 1100 minutes
$155.00 for 1500 minutes
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Back to the rant:
This flat rate plan nonsense is a lot of rot designed to try to extract more money out of subscribers without admitting that what people [mostly Luddite] really want is high quality calls at low prices with groovy little handsets which they can use anywhere.
Let's hope Q! doesn't get too far suckered into the 'Flat Rate' idea. They were able to figure out power balancing, near/far, coding of signals in Gaussian noise and stuff like that so they should be able to get on top of "Peripheral Processing of Pricing". Which is a novel concept whereby the customers set the price [well, they don't set it, the Base Station does but the customer accepts it or not at the time of the call in an auction among prospective callers].
If minutes were so cheap that nobody cared and they'd just push SEND when they felt like making a call [or they'd just leave the phone switched on, and logged on to the IP network permanently] then flat rate plans would make sense. But at the moment, most people are still hunting cheaper minutes. Flat Rate is a rort! Not long for this world in the current form.
Mqurice
PS: SurferM, I couldn't resist - Heh! Heh! Heh! |
