$30 Prepaid Phone Makes Debut At CTIA`

By Joseph Palenchar On Apr 2 2001 - 6:00am

LAS VEGAS -Telespree of San Francisco unveiled a pen-shaped keypad-less prepaid 1.9GHz GSM phone that can be marketed for over-the-counter sale by carriers or airtime resellers, now known in industry jargon as "virtual network operators (VNOs)." The company expects fourth-quarter availability to consumers.

The device, shown at the CTIA show, is targeted at $30 retail, including an unspecified amount of airtime.

The phone uses voice recognition to allow subscribers to dial by name or number, but the voice-recognition engine and other service intelligence resides on a network server to reduce the device's cost well below that of traditional prepaid phones.

To reduce the cost of activating and provisioning a phone, the device itself lacks a phone number, said CEO Alon Segal. Anyone who wants to call the user must dial an 800 number and then, as if sending a message to a pager, punch in the user's 10-digit PIN code. The lack of a phone number also frees up phone numbers for carriers to use for traditional post-paid service.

To buy more airtime, users attach a replacement "clip" that contains a digital key corresponding to a preset amount of airtime. The device also features a 911 button and operates on standard alkalines.

The handset and airtime costs of traditional prepaid services are high, Segal said, because they use standard phones and must cover setup costs such as those associated with provisioning a phone with a phone number. Carriers and resellers also increase device and airtime prices to cover the cost of churn.