AT&T Wireless Services Inc. is testing a new pricing plan in Texas aimed at the consumer considering a second phone line in the home.
The trial offer in Plano allows customers to choose from two digital pricing plans-one for $40 and the other for $60 per month-that include unlimited airtime within Plano. Once customers leave the Plano calling area and enter the Dallas/Fort Worth calling area, south of Plano, they can use a certain number of minutes allowed under each plan, 30 minutes and 300 minutes respectively, with additional airtime priced at 25 cents per minute.
Long-distance charges to other locations in Texas or across the United States are 10 cents per minute. Advanced calling features, including voice mail, caller ID and call waiting, are included in the monthly charge.
A roaming rate of 60 cents per minute is charged when customers use the service outside of the Plano and Dallas/Fort Worth calling areas.
AT&T is calling the offer Home Phone Option. The desire is to attract customers who are looking for a second phone line in their homes. Customers ultimately will use the landline phone for Internet access and fax service and the AT&T digital handset for voice service, AT&T believes.
Today’s wireless pricing already is encouraging subscribers to use their handsets as second lines or as their primary telephone, say analysts, but carriers have yet to specifically target this market segment. Some operators noticed the trend more than a year ago, as large bundled-minute packages and extended calling areas enticed customers to use their wireless phone only or as a second line. Now one-rate type plans like AT&T’s plan introduced in May that eliminates long-distance and roaming fees provide a another compelling incentive to use wireless only.
“Cutting the cord is an important next step that we collectively will take as an industry,” said Richard Siber, director of Andersen Consulting’s wireless practice in Boston. “As the rage for second lines continues, wireless provides a significant alternative with the benefits of mobility.”
Sprint PCS reportedly is looking at ways to target the second-line market as well, and PrimeCo Personal Communications L.P. last year said the idea was something it was studying.
“There are a zillion ways to do second line and move minutes from [landline] networks,” said Tom Murphy, director of media relations with Sprint PCS, who declined to comment on whether Sprint PCS was testing any such service. “It becomes more simple as more and more calls are moved to the mobile network because of the convenience of being mobile. Customers are saying they have had enough of Ma Bell and are beginning to take matters into their own hands.”
The economics of offering such a service are compelling for operators with new digital networks that have plenty of room for new customers.
“What you need to do is fill the pipes with as much traffic as possible, which ultimately gives a higher rate of return,” said Siber. “Idle capacity is of no value to any company. Carriers are trying to increase operating efficiencies by improving their margins and therefore their rate of return on their network investment.”
Still, carriers complain they are burdened with too many taxes to become competitive with wireline operators and are urging regulators to begin looking at wireless service as a true competitor to wireline service.
