Cutting the cord for all-you-can-eat wireless plans
Wireless operators hope all-you-can-eat pricing will prove appetizing to consumers still using their landlines.
The new pricing model could also help them in the protracted battle for customers with the cable industry.
Two weeks ago, Verizon Wireless was the first major U.S. wireless operator to announce a $99.99 unlimited voice plan. Within days, AT&T and T-Mobile followed with their own plans. And last week, Sprint Nextel announced its plan, which also includes unlimited data and a slew of premium wireless services.
These new plans naturally appeal to today's heaviest cell phone users. Road warriors who are constantly on their cell phones and who consistently go over their allotted minutes every month will be among the first people to sign up for these plans. But the services could also appeal to a much wider group of consumers looking to consolidate their communications bills by cutting the cord on their home phone.
"These new plans give consumers a much more realistic option for cutting the cord on the home phone," said Roger Entner, senior vice president at IAG Research. "Besides, voice services are going wireless anyway. Even if you have a phone at home, it's likely cordless. And if you're like me you have your home phone or office phone ring through to your cell because it's always with you."
The trend to cut the cord is already well-established. Over 12.8 percent of U.S. households today use a cell phone instead of a traditional wireline phone in their home, according to the CTIA, the wireless industry's trade organization. This is up from 7.7 percent in June of 2005.
Cable operators have also been putting pressure on local phone companies by offering their own version of residential telephony service, which they bundle with Internet and TV services. The phone companies have fought back by offering their own bundles. Verizon and AT&T have even upgraded their networks to start offering their own TV services.
As a result, phone companies have seen rapid declines in traditional land lines. Qwest Communications, which operates in 14 states, lost a total of 738,000 phone lines in 2007.
But with nearly 85 percent of the U.S. population now owning a cell phone, it makes more sense for people to simply cut the cord rather than sign up for home phone service from a cable operator. While the cable companies' phone service offers some enhanced telephony features that the traditional phone companies don't offer, cell phones offer complete mobility, something neither local phone companies nor cable operators offer.
But until now consumers looking to cut the cord had to be careful about using more than their allotted amount of voice minutes. These new unlimited plans put those fears to rest.
While a $99.99 unlimited voice and whatever other cell phone services are included might sound expensive for a cell phone-only service, it starts looking like a bargain to customers also looking to ditch their home phone service.
For example, Verizon charges between $42 and $47 a month for its traditional unlimited local and long distance residential calling service that includes voicemail, caller ID, and call waiting. Verizon Wireless charges $40 a month for its lowest tier of wireless service, which includes 450 minutes of anytime voice calling. If someone is already looking to ditch his home phone, he can get an unlimited plan from Verizon Wireless, which ensures he won't be sneak-attacked with extra overage charges, for only an additional $13 a month.
The deal becomes even more compelling if more services are added or if the total price on the unlimited packages drops. Sprint's plan offers unlimited voice as well as unlimited data, text, e-mail, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, and push-to-talk service, all for $99.99 a month. T-Mobile includes voice, unlimited text messaging, and picture messaging for the same price.
AT&T's plan is only for unlimited voice calls. AT&T customers can get additional messaging plans starting at $5 more a month with an unlimited messaging plan costing an additional $35 a month on standard phones.
Verizon Wireless's $99.99 plan includes unlimited voice and Internet access, and Web-based e-mail. Customers can tack on additional services for a fee. For example, for $119.99 a month, Verizon Wireless customers can get unlimited messaging. And for $139.99 a month, they can get VCast video, VZ Navigator, and Mobile E-mail functions.
Even at the higher prices, it could be argued that Verizon and AT&T are cannibalizing their traditional phone services with this strategy. But the reality is that regardless of whether they introduce a new pricing plan or not, people are still going to ditch their traditional home phone services. For Sprint Nextel and T-Mobile, these plans give them a way to compete with the cable operators.
There is already some evidence that all-you-can-eat cell phone plans really do entice people to cut the cord.
A small regional cell phone company called Cellular South, based in Jackson, Miss., started offering an unlimited, flat-rate plan last year. Unlimited voice for regular cell phones costs $79.99 and the plan costs $99.99 for unlimited voice and data services for smartphones. So far almost 70 percent of their customers have chosen one of these flat rate plans, according to Jeff Kagan, an independent telecommunications and wireless industry analyst. And of those who have subscribed to the services, about 25 percent have dropped their wireline connection, which is double the national average, Kagan added.
"If that holds true for AT&T Wireless, Verizon Wireless and Sprint, we can expect an enormous shift in customers and the technologies they use," he said. "The lower the monthly price, the larger the number of customers will choose it."
Indeed, consumers have a finite amount of money. And as the U.S. economy heads toward a potential recession, consumers' budgets are likely to get even tighter. AT&T has already said that it's seen some pressure on its traditional land-line business in the fourth quarter of 2007 because of the weakened economy. It used to be said that people would never give up their home phones even if in bad financial times. But that isn't necessarily true anymore. Home phones may be one of the first things cut as people rely more on their cell phones, which are with them where ever they go.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie. 
For local service, plans start around $25 a month, and with all features added, top out around $45 or $50 monthly.
I'll wait for some of those big guns to bring their prices more into line with this, as Metro PCS continues to expand their footprint.
They told me that they are building New York which helps me.
Without the above bundle, my DSL would be $70 month.
I cannot see ditching my E911 line with DSL to go strictly cellular. It is not cost effective.
probably minor one as well) would go to something similar to
this.
I have put my home phone on call-forwarding and use my cell
phone all the time anyway. All I need is the same number, and I
suspect I could get that number if I worked at it. I find having
both cell and land phones on same device, extremely handy as I
live in the country, and am often outside during the day. Even if
I am inside, it is still handy.
I am on AT&T and have no choice for living in the area I do, the
only service available in the foothills is AT&T. But, beats not
having it.
This whole thing with trying to attract customers that want to drop their landlines only works with people that don't have DSL. Then again, AT&T was trying to get as many customers as they can to switch to their DSL service lately... which needs a landline...
Either these companies' business models are out of whack or I'm missing something, seems like they try to rid people of landlines and get more people to have them at the same time...
i'm not sure if the $99 deal includes it or not.
but if they do, time to ditch DSL line.
I don't know where these wireless companies are really getting their prices from, in all honesty. My parents are paying nearly 40 dollars a month for only 600 minutes of talking time...... while still paying nearly 50 on top of that for regular phone service and long-distance, which I have been trying to talk them into dropping because I am the only one at home most times and 911 still works WITHOUT a phone company.
My biggest hang up on cell plans is their pricing. The ONE time I went over the suprise was 200.00. Not 17.00. The fee's on variouse services is far to high. I broke down and paid 20 for unlimted texting. That's a rip off, but the one service that I felt that I could affort. Turns out even that wasn't really unlimited and I got a suprise on my bill.
Far too expensive for me to trade my 99 a month bill for 300 a month in bills for essentially the same service.
i'm pretty sure this is meant for the diy entrepreneur or the on-the-road salesperson, or even the small business person.
tmobile has 1000 anytime minutes and free nights/weekend minutes for $40.
just another feature of many email servers, nothing more.
It's like charging per message for regular email. What a rip off.
The phone companies need to grow a back and just take control instead of the Telcos dictating what shud be done!
Do us all a favor AT&T mafioso err employee, shut your damned mouth and fess up to the fact that you and the company you work for are corrupt and are fleecing the public on a daily basis. Oh yeah you work for a TRAITOROUS organization as well. Maybe you should switch jobs. I for one will be shouting down any employee of your company anytime and anywhere i see them. I will also be dropping their service as soon as i can afford to pay off their cancellation fees. (more racketeering)
Finally i reiterate if you work for the fascist company shut your mouth.
you unlimited minutes WITHIN THE U.S.! Uh, I have relatives in
Canada. We're not talking about crossing any oceans, it's a false
boundary. Yet it's not included in the "unlimited" plans?
Funny, that sounds like a limit to me. But I guess when you allow
these wireless companies to lie year after year, you just get used to
it.
Alarm.com and NextAlarm.com
http://www.uplink.com/RESIDENTIAL/default.asp
voip:
https://nextalarm.com/index.jsp
Hrm, well, check with
homesecuritystore.com Better to go with them, haven't heard any bankruptcy rumors about them.
Bottom line, cell phone reception is still spotty and unreliable regardless of where you live! Until this is corrected, you can keep your other add ons and your attempts to convince me to drop my land line. Vonage is the best deal going in this regard.
drawbacks. Specifically, if you receive unwanted or harassing
phone calls, landline phone service typically offers "selective call
blocking". That is blocking phone calls from specific numbers.
Not so with wireless. At least not that I am aware of. Here's
another one. Have you ever received a call from a fax machine
with the call marked private ID or no caller ID? With a landline
phone, you can block calls labeled private ID. I recently received
30 fax calls from a private ID number within 60 minutes! My
carrier said that the only way to stop this is to change my cell
phone number. This is one reason why I would never list my
business number as my cell phone number. One last issue. How
about receiving porn text messages on cell phones. The only
way to stop it is by changing phone numbers
They could not block the number, but Cingular at least got the calls to stop.
as for radiation...
did you forget that radon, xrays, your tv, the cordless phone, your microwave, your computer and the sun all expose you to radiation?
# Unlimited National IN Calling to any Verizon Wireless Customer and Unlimited Night & Weekend Minutes.
# Unlimited Anytime Minute plans include unlimited calling with anyone on any network in the U.S.
# Data sent or received (incl. Mobile Web advertising) is $1.99/MB.
Verizon advertises customer service and technical support, does it not? Those two claims are more than sufficient to call "********" on your comment, "dude".
-R
How do users in the US overcome that problem?
Mike.
it was fine when i was divorced and my kids were young. when my oldest turned 9 she started calling her friends on the phone, and her friends started calling my cell because that was the only number she had for my house when she stayed with me on the weekends.
my ex and i decided that 9 was too young for a cell phone, so i got a cheap voip phone to use at the house. there are a few benefits that i didn't realize i missed:
1) it's hard to lose the house phone. i have found that the house phone is quite handy for locating my missing mobile by calling it. sure you can do that with another mobile if someone else is around, but if you are alone in the house and can't find the phone you have to get pretty creative, like emailing yourself at your mobile number.
2) you can't call "the house" without a house phone. with a mobile phone you can't just call the house to see if someone is there, like if you need someone to check something.
3) a mobile phone doesn't offer much in terms of redundancy. sure, if you have a carrier that uses SIM cards, you can keep your old phone around "just in case", but having a fully charged, fully functional phone available at all times is a real luxury.
i wouldn't call them necessities, but they do make life easier.
- Follow the money & regulations
- by tessieii March 5, 2008 11:55 AM PST
- Here in Maine, the ONLY telephone service regulated by the Public Utilities Commission is the basic land line service. I. E. call waiting, voice mail, etc. etc. are all UNREGULATED both in terms of what is delivered and what is charged. It is a "Wild West World" in the delivery of telecommunications here. When a phone company wants to raise its basic land line service or justify its pricing, the amount of investment in the infrastructure is determined and a "reasonable rate of return" is allowed. As far as cell phones, voice mail, call waiting, and any other service you can think of, the "sky is the limit" as to what can be charged. There is no approval process. Using good old fashioned monopolistic tactics, it is in the phone company's best interests to charge a rate that puts everyone else out of business and then raise their prices so that their return on investment (a few cell towers) approaches or exceeds 100%--Yes, that is ONE HUNDRED PERCENT. Since telcos are as close with their figures as the oil companies, who knows how profitable they really are - When we look at the incredible salaries that the executives pull down, it appears that they could be America's most profitable industry.
- Like this Reply to this comment
-
Showing 1 of 2 pages (46 Comments)Folks, Verizon charges $15.00 a month for a DSL line in Maine. Fairpoint Communications charges $37.00 in Maine. What do you think? Is Verizon giving away their DSL as a "loss leader"? Or. . .might FairPoint's price be whatever they think they can charge? (Keep in mind that Verizon is a "union shop" and Fairpoint is not.)
Gotta sign off, I will get sick if I keep thinking about this cell phone/other than basic land line services pricing model. T