Get Unplugged

by David Schloss

For the first few decades of its life span, cellular telephone use was the exclusive privilege of the rich and extremely important. Large and conspicuous telephones could be seen tethered to Ferraris and carried by the assistants of movie producers and media moguls.

While the promise of instant, affordable communication always seemed to be lurking around the corner, it was not until a few years ago that a telecommunications infrastructure was in place that allowed prices to plummet. Now when you walk down the street, every other person you see is using a cell phone.

According to the Cellular Telecommunications Industry of America, wireless subscriptions have soared in the last decade. CTIA’s most recent comprehensive survey, released in December 1999, shows that there are more than 86 million wireless subscribers in this country, compared with just 3 million in 1985.

In the last year a flurry of mergers helped consolidate the wireless industry, leaving just a handful of major players. Verizon (formerly Bell Atlantic Mobile) has staked its claim on the East Coast after buying out GTE Wireless, Vodafone, and Airtouch. AT&T is still standing as a national player with a wide customer base and competitive calling plans. Sprint PCS and VoiceStream (formerly Omnipoint) exist in the all-digital realm, and Nextel continues to offer its own service based on its iDEN technology.

Consumers can now take advantage of expanded and upgraded network infrastructures, as well as healthy competition that has kept the cost of calling plans low. Providers like AT&T, Sprint, and Verizon all offer options where all calls in the U.S. are billed as local, regardless of the distance, allowing people to use their cellular phone over a landline phone for long distance calls.

Such a wealth of choices creates confusion and the occasional rip-off. Selecting the right rate and service can be crucial to getting the most communication for the buck. Even small businesses can have dozens of phones, adding up to a hefty recurring expense.

Picking the right combination of service and phone (see Web Phones BUYER’S GUIDE in this issue) can feel like playing darts while blindfolded. Factor in the additional regional calling plans, direct phone-to-phone services, and wireless Internet rates, and it seems nearly impossible to be sure that money isn’t being thrown down the drain.

So how does the average business user select the right plan? With the variety of programs available, we decided to look at national service plans from AT&T, Verizon, Sprint, and Nextel. Our research provides some practical answers for business users.

Most consumers now turn to the major carriers for their wireless service, and for good reason. With affordable rates and widespread coverage, the major companies are a good choice. Sprint, AT&T, and Verizon all offer similar rate plans with nationwide coverage, but some differences make shopping around vital.

While discounts are available for corporate customers, rates are based on the company’s personal plans, with discounts based on user volume. To get an idea of what a plan will cost, look first to the costs for personal use. For example, Sprint offers its Free and Clear plans ranging from $20 for 20 minutes to $400 for 4,000 minutes. AT&T’s One Rate ranges from $60 for 300 minutes, to $200 for 2,000 minutes (that’s 33 hours).

Verizon’s rates are slightly more confusing because (as of press time) its price model still includes plans inherited from its regional roots. Customers can choose between the SingleRate national plan, the DigitalRate regional plan, and SingleRate East, which is a cross between the two. For national coverage, Verizon plans range from $35 for 150 minutes to $200 for 2,000 minutes.

Similarly, Nextel offers nationwide service, though its rate plans are initially more costly than the other providers. Starting at $70 for 400 minutes, Nextel is on par with the other three providers near the 2,000-minute mark, at $200 a month.

The base minutes are only half the story, since most carriers run discount and bonus programs, and all have varying per-minute overtime rates.

An alternative to choosing a nationwide flat rate plan is selecting a regional plan from any of the carriers. Typically, customers who call from a localized area (such as a single state or “metro area”) enjoy savings anywhere in the range of 5 to 20 percent. The disadvantage is that a hefty charge applies for any calls made from or to places outside the home region.

The most recent trend in cellular communication is the inclusion of a micro-browser on the phone with wireless access to the Web. Many phones use Wireless Access Protocol (WAP) or similar standards to provide users with low-bandwidth access to the Internet.

n order to provide services out of the box, the major carriers have begun to team up with Internet companies and portal sites to ensure that content is available for subscribers. Sprint, AT&T, and Verizon all offer Web phones that support data and transactions from a variety of providers including Amazon, Barnes and Noble, Ameritrade, AOL, Bloomberg, CNN, eBay, etrade, ABC News, and ATM Finder.

Small Business Computing Staff
Small Business Computing Staff
Small Business Computing addresses the technology needs of small businesses, which are defined as businesses with fewer than 500 employees and/or less than $7 million in annual sales.
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