March 5, 2002 2:35 PM PST

AT&T readies network for the masses

AT&T Wireless introduced two low-priced cell phones along with a low-priced calling plan Tuesday in an effort to lure more customers onto its new, expensive network.

So far, use of the new network is limited to a handful of people in cities like Seattle, where AT&T Wireless has been offering trials. These customers are mainly businesses, whose employees don't think twice about using a cell phone to shuttle e-mails with attachments, one of the network's more hyped new features.

But most of the nation's 140 million cell phone owners use their phones for more mundane purposes such as simply making a call. AT&T Wireless said its new subscription plan takes this into account. The plan lets people use the new network to only make voice calls, which is less expensive but eschews most of the network's other features.

"This helps us sell it to the mass market," said Ritch Blasi, an AT&T Wireless spokesman.

Most U.S. carriers, including AT&T Wireless, are about to find out if the last few years and billions of dollars spent building next-generation phone networks will pay off. These networks can handle a greater number of calls at one time--which could mean fewer dropped calls--and allow faster Net access, more advanced games and other services.

AT&T Wireless' new network uses a cell phone standard called general packet radio service (GPRS) and is only offered in a handful of states. GPRS is generally less expensive than rival standard code division multiple access, but does not offer as fast data speeds as CDMA.

The pair of phones introduced Tuesday work on the network and include AT&T Wireless' first color-screen phone. They are priced around $200, which is less expensive than the two other GPRS handsets already being sold by the company.

Though AT&T Wireless is offering voice-only service plans for the phones, experts like Mike McGuire, research director at Gartner, said cell phone companies are hoping to recoup the costs of building next-generation networks by selling services such as sending text messages from a phone.

Use of text messaging--which most carriers already offer--is lagging in the United States, though it is very popular in Europe and Asia. "Here in the U.S., we still look at our phones as voice terminals--not a lot of messaging," McGuire said.

Voicestream Wireless has already launched a service on its GPRS network called "iStream," which lets customers connect to the faster network and access their Microsoft Outlook and Lotus Notes e-mails.

Cingular offers GPRS service in the Seattle area, Las Vegas, parts of coastal Georgia, and part of Tennessee. It plans to offer service in New York by midyear, according to a Cingular representative.

Cingular subscribers pay $5 a month to be able to send and receive a megabyte of data on the GPRS network. For $7, customers get the megabyte of data, plus the ability to send 100 messages a month.

 

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