Thursday, November 20, 2003

Cell phone blitz hits Monday

Heavy switching, big promotions likely

By Mike Boyer
The Cincinnati Enquirer

[IMAGE] Alliea Phipps, who operates a public relations firm, wouldn't want to change her cell phone number. With new rules starting Monday, though, she could change providers and keep her number.
(Michael Snyder photo)
| ZOOM |
With possibly the biggest event in the 20-year history of wireless phone service just days away, cellular service providers in Greater Cincinnati are gearing up for a marketing blitz to cell phone users who for the first time will be able to keep their phone numbers when they switch providers.

A Federal Communications Commission order, formally known as local number portability, takes effect Monday in 100 cities - including Cincinnati - and has accelerated the typically heavy year-end advertising of Cincinnati's six wireless providers. Consumers can expect a barrage of price-cutting and promotional offerings.

Industry observers say portability also might accelerate an emerging trend, particularly among younger customers: dropping wire-line service to rely solely on cell phones. If that wasn't enough for phone companies to consider, the FCC has expanded its portability order to allow home or office numbers to be transferred to cell phones.

And all of this creates issues for how phone numbers are listed in telephone directories.

"It's a watershed event,'' said Roger Entner, program manager for wireless and mobile services at the Yankee Group, a Boston consulting firm.

In Greater Cincinnati, an estimated 1.1 million cell phones are in use. J.D Power Associates, the market research firm, says Cincinnati residents spend an average of $48 a month for wireless service, fueling an industry that generates annual revenue in the hundreds of millions of dollars.

For consumers, portability provides not only practical options for selecting a wireless provider but also the opportunity to snag an attractive deal, at least in the short term.

For example:

• Cincinnati Bell Wireless has cut the cost of its 500-minute calling plan from $39.99 a-month to $35 and doubled the amount of minutes to 1,000.

• Sprint PCS has expanded its unlimited night minutes, starting them at 7 p.m. instead of 9 p.m.

InCode, a California wireless consulting firm, doesn't expect the price-cutting to continue. Carriers gradually will shift toward emphasizing service and features, spokesman Martin Dunsbyt said.

Still, the industry expects Cincinnati consumers to pay attention to price-based marketing for now.

Alliea Phipps loves her cell phone, but not her wireless service. She operates a public relations firm from her Norwood home, so her easy-to-remember cell number is the way she stays in touch.

"I have clients as far away as New York and California, and they all know the number. I'm just trapped by my service deal."

But the new options of portability also are raising fears that switching will be fraught with delays and confusion. That's because it comes in the midst of the heavy Thanksgiving and Christmas selling season, when as many as one-third of all cellular contracts are up for renewal.

"It should be great for consumers overall,'' Entner said. "But it could turn into a mess for the industry.''

Locally, nobody's quite sure what to expect come Monday, but they foresee some short-term hiccups and are hunkering down. Cincinnati Bell, for example, set up a hot line a week ago to handle customer questions about portability. The company said it has fielded a couple of hundred calls so far.

"We anticipate, in the beginning, there will be a significant bubble of people who want to take their number with them. But six months out, it should level out and won't be that significant," said Roger Tang, Ohio-Pennsylvania regional president of Verizon Wireless.

Cutting the cord?

The new FCC rules also might accelerate the trend among phone users to cut their phone cords - abandoning wire lines and using their cell phones exclusively.

Nationally, about 5 percent, or 7 million, cell phone customers use wireless exclusively, according to the Washington D.C.-based Cellular Telecommunications & Internet Association (CTIA), an industry trade association. The Yankee Group thinks that number could grow to 30 million in the next five years.

"You won't see a flood of people dropping their wire-line service for wireless in the beginning,'' Yankee's Entner said. For one thing, he said, customers still have concerns about the quality and reliability of wireless calls. And if a consumer uses more calling minutes than permitted under a calling plan, the additional time can be expensive.

Phipps said she considers her wireless number, which she's had for five years, more valuable than her wire line, which she's had only a couple years since moving from Covington to Norwood.

"No one ever comes to my business. I'm constantly going to them, so I practically live in my car,'' she said, explaining the importance of her cell phone. But she has no plans to drop her wire line. She said she needs it to send and receive faxes from clients. The industry expects many consumers to follow suit, at least for the foreseeable future.

Number, please

Historically, consumers have treated cell phones as highly personal devices and not listed cell numbers in printed phone directories. But that is changing, too.

"If a business wants a cell phone number as their primary contact, that's the way it will be listed in the Yellow Pages," said Douglas Myers, president of CBD Media, publisher of the Cincinnati Bell Yellow Pages and White Pages.

The company, spun off from Cincinnati Bell last year, is making business listings available in a variety of formats, including the Internet and via wireless in a test with Blue Ash-based Raco Industries. "We want to make it so that any way a person wants to retrieve the information, it's available," Myers said.

Less clear is whether there will be a boom in demand for listing both cellular and wire line phones, and what the costs might be to directory companies and consumers.

Meanwhile, the cell phone industry association is working with cell phone providers to develop a national directory of cell phone customers. The system, expected to be introduced next year, would allow wireless and wire-line customers to search for listings in any city by dialing 411, spokesman Travis Larson said.


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