Wireless Seen As Land-Line Competition

By Joseph Palenchar On Dec 18 2000 - 8:00am

NEW YORK CITY -Wireless phones will continue to steal more minutes of use (MOU) from land-line phones if marketed properly, according to carriers speaking at a recent Bear Stearns conference.

To compete with land-line service, carriers such as Western Wireless, Centennial Communications and AT&T Wireless are marketing fixed-wireless phones as a direct land-line replacement, while carrier Leap Wireless positions its Cricket service as a wide-area cordless-phone service, carriers said at the conference. But traditional mobile-phone service itself is shifting land-line minutes to wireless networks, they contended.

To accelerate the shift, carriers must develop targeted programs, one of the carriers said. "We price ourselves for the business and personal sector to make sure this migration happens," said Dan Eldar, VP of Israeli carrier Partner Communications.

For example, Partner promotes plans for families and soldiers in which airtime is priced 90 percent less than usual for calls made among family members. "Most calls," he noted, "are not made between family members."

Eldar also pointed out that there is "less and less need to use other means of communication if it [wireless] does data, faxes, and works worldwide."

In some overseas markets, scattered land-line deployment is firing up demand for a wireless alternative, but the shift is also occurring in the United States, some U.S. carriers said.

Western Wireless president Mikal Thomsen said that in his markets, he "sees a direct shift of wire-line use to wireless" as subscribers increase their wireless minutes of use.

Thomsen also pointed out that, in offering fixed-wireless services to homes, it can become "the only high-speed data network available to most customers within our [rural] markets." As a result, "data will open the door to voice traffic."

In its markets, Western Wireless' "biggest barrier" is the psychology of rural consumers who are "less apt to view technology as a good thing," Thomsen said, but "we are making great inroads" because more consumers are seeing their neighbors use wireless phones. Nonetheless, "it will take more and more years of increased usage ... to entice people to use [wireless] as their primary phone."

Thomsen drew a distinction between his fixed-wireless service and Leap's Cricket service. "Leap is wide-area cordless," he said. "Their coverage is in very tightly defined metropolitan areas and not much coverage to areas outside. One of our cell sites has the radius of their entire network [in a metro area]."

Leap "has some mobility but doesn't compete with mobile; it competes with land-line," Thomsen said. Leap's deployment "does not encourage people to use Leap as they use a cellular phone."

For its part, Centennial offers service in Puerto Rico and in rural U.S. markets, and president Michael Small said "we have just begun to accelerate minutes of use dramatically" in the United States. The company has already done so in Puerto Rico, he said, where Centennial offers a "simple islandwide offering with less complex pricing plans."