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Wireless: Put Service First


After Marissa Whitley won the Miss Teen USA contest in August, she left Springfield, Mo., moved to an apartment in New York, and traveled regularly around the country to appear at events. She was thrilled with her new life, but, as an 18-year-old who had lost both of her parents as a child and was now far from friends and family, she was also lonely. One day in September, she got a text message on her mobile phone from her best friend. "It said, `Don't forget about me in the Big Apple. We miss you. Love, Morgan.' That was probably the most memorable text message I've gotten," says Whitley.

If you want to know about the future, look to the young. What Whitley's experience shows is that mobile phones are not just for talking anymore. The major providers of wireless phone service, including Verizon Wireless (VZ), Cingular Wireless, and AT&T Wireless (AWE), are rolling out a new generation of mobile phones with new services, including text messaging and wireless Internet access. "Messages are really easy and quick," says Whitley. "My phone is a lot more reliable for sending me a message than a computer, especially because I don't have a computer at home."

THE BASICS. Not that you should forget about voice communication. Clearly, the primary reason anyone gets a mobile phone is to gab away. Most people want to pick the coolest phone they can find and then choose a service plan. My advice is to do the opposite. Choose a wireless service provider first, because the differences in the offerings are much greater than the differences in phones--and not every phone works with every wireless network. Once you find the service that's right for you, then pick a phone from the provider that suits your fancy--Nokia (NOK), Motorola (MOT), Samsung (SSNLF), or some other manufacturer.

Choosing a wireless service plan can be a baffling experience. All the major players run promotions that trumpet features or advantages that you may or may not care about. Never mind all the marketing fluff. The key is to answer some basic questions: Are you going to use your phone primarily in and around your own city, or do you travel enough that you want to use it around the country? And will you use your mobile phone mostly during normal business hours, or do you plan to use it mostly on evenings and weekends? Once you answer these questions, you can make smart choices about which service is best for you.

For people who want to use their mobile phones near home, there are lots of good options. Let's assume you want to keep your mobile bill reasonable--say, $40 a month. If you're going to use your phone during business hours, most of the per-minute rates are around 10 cents.

Since prices are so similar, it makes sense to go with the phone companies that rank highest on quality. J.D. Power & Associates publishes an annual ranking of wireless carriers for 25 different markets, which can be found at www.jdpower.com. It measures a host of factors, including coverage, call quality, and customer service, and then ranks the phone players on overall satisfaction. AT&T (T) ranks tops in customer satisfaction in 13 of the markets, including Los Angeles, Chicago, and Dallas. That's due to the company's customer service and call quality, among other things, according to J.D. Power. Verizon Wireless ranks highest in eight of the markets, including Boston, Philadelphia, and Seattle. The top-ranked carrier in New York is Sprint PCS (PCS), a positive sign for the company since customers in the past have complained about poor coverage in some areas.

DISCOUNTS. If you're using your mobile phone around town and you expect to make lots of calls outside of business hours, you can get much more for your money. Wireless providers offer discounted service at night and on weekends, but the discounts vary greatly. With AT&T and Cingular Wireless' $40-a-month plans, you get unlimited free calling on nights and weekends. Verizon, Sprint PCS, and VoiceStream (VSTR) offer 2,000 to 3,650 minutes.

If you're a big traveler, you're probably going to pay more for your mobile-phone service--but at least you can get widespread service. The wireless industry has consolidated into five major players--six, if you count Nextel Communications Inc. (NXTL), which caters mostly to businesses--and all offer some kind of national service. The best options for national coverage are AT&T, Sprint, and VoiceStream. Sprint and Voice-Stream are good low-cost choices, charging 11 cents and 8 cents per minute, respectively, for $40-a-month plans. Their coverage is spotty, though, since both are new providers that haven't had as many years as other carriers to put up radio towers across the country. AT&T is the best option for people who don't mind paying a little more for higher-quality service--the lowest price national plan is $60 a month. It charges 13 cents a minute for nationwide roaming and long distance.

Verizon and Cingular, a joint venture between BellSouth Corp. (BLS) and SBC Communications Inc. (SBC), offer national plans, but they're more expensive than rivals' plans. Their rates are 23 cents a minute for packages that cost about $40 a month--perhaps because they don't want to cannibalize their local phone business. Verizon and Cingular are more competitive with national plans that run $50 or more per month.

Which company is best for people who like sending and receiving text messages? Whitley uses AT&T, but all of the wireless players have decent messaging features. Often, you get a few free messages each month and additional messages typically cost 10 cents each. If you sign up for a bucket of messages, you can pay 3 cents a message or less.

There's one big drawback, however. None of the wireless companies lets you send messages to the phones of other wireless companies. In other words, AT&T customers can't send text messages to Sprint or Verizon customers. Why not? The mobile players simply haven't installed the technology to let their networks trade text messages. Clearly, this is a big drawback. It would be like AT&T Wireless customers not being able to call anyone who doesn't use AT&T Wireless service. The result is that only 5 or 6 million of the 120 million mobile-phone customers in the U.S. use messaging, according to estimates from researcher Gartner Group Inc. Text messaging will get more useful as carriers start to deploy technology next year for swapping messages among themselves. Most of the rollout should be complete in 2003.

Wireless Internet services are still a bit disappointing. Sprint and Verizon have some of the most interesting offerings, but even from them what you get is pretty simple and only marginally useful. I like using mobile Web services for quick access to restaurant reviews from Zagat Survey LLC and Fodor's LLC and to get news clips if I'm traveling someplace where I can't get a newspaper. You also can get stock quotes, sports scores, weather, horoscopes, and travel information. But you have to be determined and incredibly patient. Typically, it takes 10 to 15 clicks to get anything useful--and Net connections on your mobile phone are just as unreliable as voice calls, so you regularly get cut off.

UPGRADES. Never fear, though--mobile Internet services are going to get better next year. In November, VoiceStream Wireless Corp. plans to introduce high-speed data services around the country, and other carriers have bumped up their data speeds in certain markets. Just as important, the phones and software are being refined so customers can get more useful information from the Net more easily. Motorola Inc., in particular, has been rolling out good phones that take advantage of the higher data speeds. "Motorola is clearly No. 1 in high-speed data phones right now," says Robert R. Stapleton, president of VoiceStream, based in Bellevue, Wash.

If you're looking for a mobile phone today, seek out the wireless carrier offering the voice plan that best suits your needs. But if you're after really good wireless Internet services, you may want to wait a year or two. By Peter Elstrom in New York


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