Changes Challenge Wireless Phone CompaniesChanges Challenge Wireless Phone Companies

With new federal rules on number portability taking effect Monday, they're working harder to keep their own customers and lure subscribers from rivals.

information Staff, Contributor

November 21, 2003

4 Min Read
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ATLANTA (AP) - Don't leave! Pick me! Mobile phone companies are blanketing the market with price cuts, extra minutes, premium services, and sleek handsets to lure customers from rivals and make sure their own subscribers don't bolt come next week.

In the works for years, Monday is the day when new federal rules will begin allowing legions of dissatisfied customers and bargain-hunters to switch wireless companies without losing their cell numbers.

Wireless phone companies tried hard to block the rule from taking effect, but now that it's here, they're trying to make the best of it--baiting customers with some of the most generous deals ever.

They're offering more minutes and cheaper rates, camera phones and other cutting-edge handsets, as well as enhanced features such as faster Internet connections and walkie-talkie services.

T-Mobile, for example, expanded its free weekend calling feature to include all day Friday, the busiest calling day of the week.

Sprint and Cingular have taken a similar tack, offering to roll back the start time for off-peak calling from 9 p.m. to 7 p.m. The option costs $5 a month at Sprint, and $7 at Cingular, which is also offering 500 extra minutes for customers to use if they exceed their monthly allotment.

This week, AT&T Wireless unveiled major upgrades in speed and features for its wireless data services. Next, the company plans to cut the charges for calls above a subscriber's monthly allowance to 8 or 9 cents per minute, down from 25 to 40 cents. Previously, it also halved the charge for extra phones on an account to $9.99 a month.

Also this week, Sprint launched an aggressively priced walkie-talkie service, an area long dominated by Nextel, which along with Verizon Wireless has generally stood to the sidelines of the marketing frenzy.

But even Verizon, which is the market leader and insists there's no need to go beyond its normal holiday offers, is pushing a 2-for-1 deal on a Nokia handset and cut the price on an LG camera phone to $100 after a $50 mail-in rebate.

The catch?

Most of these deals require an agreement to stay with the same company for a year or two.

"It's a lot cheaper to keep an existing customer than acquire a new one," said Cingular spokesman Clay Owen, noting that it costs about $350 in marketing and promotions to sign up each new customer.

If there's one reason that many would-be switchers may choose to stay put for now, it's that about 75 percent of the nation's 152 million cell phone users are under contract and subject to stiff penalty fees if they terminate early.

Even so, wireless companies are clearly eager to steal customers from their rivals, especially those subscribers with no contract or penalty fees to worry about. Many have wanted to switch for some time, but didn't want to give up an established cell number.

"It's a good idea, because you don't have to tell everyone your new number," said 21-year-old Kenny Richardson of Atlanta, the city with the highest percentage of households with mobile phones. "But then you have to deal with the new contracts."

And, if the competition turns especially fierce, today's bargains could prove a costly mistake compared with new deals down the road.

Verizon, Cingular and AT&T Wireless have set up Web pages where customers from other companies can pre-register to switch. Those customers can expect to receive phone calls or E-mails with cell phone deals. Other companies are providing information on their sites about how to switch over your number to them.

Other lures to retain customers include offering customer loyalty minutes, which are included in current customers' bills as a thank-you for staying with that company.

At Sprint, customer-service representatives will contact people who may be spending too much on their plan based on their current minute usage.

"If you're using too few minutes, or going over our allotted minutes, you're on the wrong plan," said Sprint spokesman Dan Wilinsky. "It might mean a happier customer because we're looking at keeping you longer."

Estimates of how many people will switch vary widely, ranging from several million to as high as 30 million in the first year.

For the most part, cell phone companies haven't pegged their promotions to the new phone number rules, which are mandated by the Federal Communications Commission. Instead, they're touting the deals as holiday sales pitches designed to offer the best service possible. Verizon, in particular, has tried to maintain a business-as-usual posture.

"I don't want to be arrogant here, but if you noticed, all of the other carriers are already doing their advertising and pre-positioning themselves," said Verizon CEO Ivan Seidenberg during an earnings conference call Oct. 28. "This is an issue for everyone else to worry a lot about and for us to keep doing what we're doing."

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