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JULY 15, 2003
By Jane Black Portability: Survival Tips for Cell-Phone Outfits [Page 2 of 2] To date, only Verizon Wireless is taking this approach. On June 24, its CEO, Dennis Strigl, ended his fight against the new rule. He also pledged to make things "easy, automatic, and quick" for customers who want to change carriers. That could help Verizon Wireless keep existing customers and garner new ones who want a wireless company that has their interests at heart, says Pettit. End hidden fees and simplify pricing. To cover the cost of portability, many wireless carriers are already beginning to charge customers monthly fees. Sprint is now asking customers to pay $1.10 per month for number portability and so-called number pooling, which helps free up numbers so new area codes aren't needed. AT&T Wireless customers will pay $1.75. Cingular and Nextel (NXTL ) have announced smaller fees. And though that's perfectly legal, experts say it will engender more ill will among customers. If you're paying anyway, why not go ahead and switch? Simpler pricing plans also will attract new customers. The cell-phone business exploded in 1997 when wireless carriers began offering "buckets" of minutes for a flat rate. More recently, Virgin Mobile's prepaid phones have made success of simplicity. Calls cost 25 cents a minute for the first 10 minutes of daily use and 10 cents for each minute after. Compare that to Verizon Wireless' pre-paid plans that charge a different per-minute fee depending on whether the call is made during a weekday, after 9 p.m., or on the weekend. On Jan. 1, just six months after its launch, Virgin had attracted 350,000 subscribers -- as many as 2,000 per day. The trend is already beginning to spread to new services. Sprint PCS recently changed its pricing for data services -- including games, fancy ringers, and e-mail -- to a flat rate of $15 per month. Market Mom, not minutes. Finally, experts say, carriers need to connect emotionally with their customers. That's what MCI's "Friends and Family" campaign was about back in the 1980s. And it's the same principle behind the new "Neighborhood" plan, where customers pay a flat rate for unlimited local and long distance calls. "The key is to stop people worrying about minutes and start them worrying about their mom," says Pettit. "Show them how a text message can deliver joyous news -- like the birth of a new baby -- or how a picture phone can show grandma the new baby. With a commodity service, it's all about finding ways to connect." One thing customers won't likely see is a price war. If the wireless industry learned anything from the competitive long-distance business, it's not to cut rates so low that it's difficult to upgrade the network for new services. Instead, analysts expect wireless carriers to finally improve customer service, compete on new, advanced services, which keep customers loyal and provide far more revenue than voice service, and create sophisticated marketing campaigns that create customer loyalty. "Without something to hold over consumers' heads, [carriers are] going to have to shape up," says analyst Kagan. "Somehow, they've got to find a way to bond with consumers."
 Black writes for BusinessWeek Online in New York Edited by Beth Belton Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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