InterCel Inc. wants to learn if cellular customers who are familiar with rate plans will behave differently when let loose on a 1900 MHz system for a flat $50 a month.
“We’ll be able to analyze usage in an unlimited threshold,” said Ed Horner, chief operating officer of Powertel Inc.
The company also will quickly load a new system with users and begin to build brand identity. No contract, no per-minute charges, no roaming fees. Customers just buy a single-mode phone, sign up and they can use the service throughout Powertel’s entire coverage area for $50 a month until the end of the year.
Powertel operates a cluster of personal communications services networks in Tennessee, Alabama, Georgia and Florida. It is a wholly owned subsidiary of West Point, Ga.-based InterCel.
InterCel said more than 50 percent of the 14,892 customers on its Powertel networks were previously high-use cellular customers.
“We hope to change customer behavior and get customers in the habit of giving out their number, keeping that handset on and receiving calls,” said Allen E. Smith, Powertel president and chief executive officer. The carrier doesn’t expect capacity problems; it is using Global System for Mobile communications technology.
Neither does the operator expect a strong drop in subscribers at the end of the year, when the $50 program ends. “It will be too difficult for them to give up the short messaging, and they’ll recognize how feature rich the system is,” InterCel said. And by year’s end, “We will convert to a rate plan that will offer the value they are looking for.”
BellSouth Mobility operates cellular systems in most of Powertel’s licensed areas. BellSouth already has converted Atlanta to digital technology and expects to convert other Powertel markets to digital service early this year. BellSouth also is launching text messaging in its markets as well. It uses Time Division Multiple Access technology.
“Eighteen months from now, you won’t know the difference” between cellular and PCS, said BellSouth Mobility spokeswoman Nicole Lipson. “Except we have the reputation, we have 14 years of capacity and we have all the same options. We can meet what they do. Customers who leave us will come back,” Lipson said.
Powertel is a bidder in the D- and E-block spectrum auction now winding down in Washington, D.C. The company estimates it will have a 36 percent market share in the future, when there are three or four carriers per market.
Until manufacturers can offer dual-frequency handsets, Powertel handsets support only GSM service. The company hopes to switch to handsets that combine GSM and analog technology at a later time. Because Powertel is partially subsidizing handsets today, the cost of customer acquisition has been about $175, InterCel said.
By the end of the first quarter, Powertel will offer service in a 180,000-square-mile coverage area, covering 16 million people. Powertel’s PCS licenses cover four major trading areas-Birmingham, Ala., Memphis, Atlanta and Jacksonville, Fla. Service has been launched gradually throughout the cluster. Commercial service began in early October in Montgomery, Ala., and Jacksonville, Fla., followed at the end of the month by Tuscaloosa, Ala., and Memphis. Birmingham, Ala., and Jackson, Tenn., were launched in December. All other markets for which Powertel currently holds licenses will be turned on by the end of this year’s first quarter, the company said.
