Digital service may not be the carrot that attracts consumers to personal communications services and digital cellular providers.
According to a study by Economic & Management Consultants International Inc., 73 percent of existing wireless phone users in the United States believe they have digital wireless service. But only about 2 million U.S. subscribers actually use digital service, said Washington, D.C.-based EMCI.
“The primary reason for the misconception is that the majority of cellular users and people in general view the wireless industry as very high tech, and they immediately associate it with being digital,” said Tom Ross, EMCI consultant.
Ross said consumers’ beliefs will be a hurdle for carriers planning to offer digital services. Providers will need to concentrate on marketing the service’s enhanced capabilities, such as short messaging service, caller ID and longer battery life, rather than emphasizing digital technology.
“I think people really don’t want some technology shoved in their face,” said Ross. “They want a product that is useful for them to use. Consumers just want to be able to make a phone call … It surprises me that AT&T (Wireless Services Inc.) and others are marketing their services as Digital PCS. I think it confuses them (consumers) more.”
Ross recommends carriers approach marketing like American Personal Communications has by bundling enhanced services. Several PCS and cellular carriers have taken the same approach. BellSouth Mobility DCS is offering its cellular customers in Atlanta a digital communications services package that includes the first minute free on every incoming call, caller ID, voice mail and message waiting. Western Wireless Corp. has done the same in its PCS markets.
“There’s definitely a segment of the population that likes these services. But most aren’t willing to pay [extra] for it.”
Offering enhanced services also is a way to generate airtime, said Ross. As minutes of use continue to decrease, carriers will need to come up with ways to make customers use their phones, he said. EMCI’s study, “Cellular and PCS Consumer Trends,” revealed that monthly minutes of use have been declining considerably. In 1990, users averaged about 207 minutes per month, while in 1996, users average 89 minutes.
“There are so many new users that don’t use [wireless service] for business whatsoever, and they’re not mobile during the day,” Ross said.
Those people are afraid of the cost associated with the service, Ross added. Offering services like the first minute of an incoming call for free bundled with short messaging service will give users an incentive to give out their phone numbers, he said. And customers are less likely to churn after they have given out their phone numbers.
