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More consumers opting for wireless as principal phone
Thursday, March 02, 2000 By Kalpana Srinivasan, The Associated Press
NEW ORLEANS -- John Dunn, who spends much time on the road and has loved ones scattered throughout the country, decided last year the time had come to cut the cord.
On his telephone, that is.
In a sign of the growing acceptance of wireless technology, thousands of consumers have made their mobile phone their primary phone. Wireless companies that gathered here this week for the Cellular Telecommunications Industry Association meeting say they increasingly are seeing consumers reach for a cell phone -- rather than a traditional wireline receiver -- to make a call.
In Dunn's case, he figured he could save money by purchasing a wireless plan with a set number of long-distance minutes that he can use at home or while traveling. "I've got the same phone number in my pocket day in and day out," said Dunn, of Clarksville, Tenn. "It makes it very convenient."
About 2 percent of 86 million wireless subscribers use their mobiles as their only phone, according to the Yankee Group research firm. Some users say they end up saving money by purchasing hundreds of minutes for one flat rate compared with their monthly local and long-distance bills combined.
More commonly, consumers are using their cell phone to make calls when they could have opted for a wired phone instead, said Ed Reynolds, president of BellSouth Mobility Inc. Rather than paying 35 cents for a pay phone call or waiting for someone else in the house to get off the line, people are dialing on their cell phones.
"We're seeing a very significant amount of that," Reynolds said.
In parts of the country that have limited landline service because of their remote location or sparse population, wireless also can offer a way to "leapfrog" old technology.
Tom Wheeler, president of the cellular association, said American companies are just beginning to wake up to what developing countries have long known: "Wireless is the most cost-efficient and quickest way to get 21st century service to remote areas."
Federal regulators, for example, are looking at ways to entice wireless carriers to expand their services to underserved areas, particularly American Indian reservations, that may not have regular phone service.
Wireless companies are even putting pressure on traditional phone companies in some places to lower their prices. In Regent, N.D., a wireless company has become a formidable challenger to the local carrier.
"Customers like that they're not locked into one choice," said Dave Friedman, vice president of marketing for U.S. Cellular Corp. His company has had success in offering residential cellular service to some New England customers.
Leap Wireless International, a California-based company, offers a service in markets such as Chattanooga, Tenn., called "Cricket." That plan costs callers a flat rate of $29.95 for all local calls and incoming calls from anywhere in the world. The company says it is capturing an underserved market through this product. Consumers who use it have an average income 50 percent less than traditional wireless users.
There are practical limits to the number of consumers who can go the cell-phone-only route. Some wireless carriers are facing serious strains to their network capacity, particularly in dense urban areas.
For that reason and others, some analysts say they see wireless not so much as a replacement for regular phones as an added option for consumers seeking to expand on their telecommunications services.
"We don't look at wireless as better than wireline," said Darryl Sterling, senior analyst at the Boston-based Yankee Group. Instead, he said he looks at mobile phones more as a complement to traditional phones.
Companies say that in many markets, people are interested in wireless services for their second line, since they may want one landline to hook up their fax or Internet access.
According to the cellular association, 43 percent of all wireless subscribers have more than one regular phone line at home and 44 percent of those people said they would like to be able to convert that line to wireless.
Young professionals, who may be moving into a new place and haven't already paid for their wireline connection, are among those most likely to take the cellular-only route in the future, Wheeler said.
"If you have family and friends spread out over a wide area, and you travel, it makes the most sense," Dunn said.
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