October 8, 2002 3:10 PM PDT

Cell phones: Hot in the city

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A majority of Americans living in major metropolitan areas now own a cell phone, a new study shows.

More than 51 percent of people residing in 44 of the United States' major telephone markets now report owning a handset, according to a survey of more than 5,000 people. And nowhere is the percentage of wireless customers higher than in Greenville, S.C., where 68 percent of the city's 200,000 residents own a cell phone, according to the study from Telephia, a phone market research company.

"If you pull up to a stop light, the people in the cars on either side of you will be on cell phones," said Greenville resident Scott Garrison, 39. "And if they aren't, you probably are."

The survey backs up earlier findings by the Cellular Telecommunications and Internet Association (CTIA). The CTIA, the telephone industry's biggest lobbying body, believes there are about 140 million U.S. cell phone owners--about half the U.S. population.

The majority milestone was reached after years of carriers' deeply discounting the price of cell phones to attract new customers. But hitting this mark gives carriers the clearest evidence yet of a slowly shrinking pool of potential new customers. So instead of trying to lure in new customers, they've begun working to keep the ones they already have.

Most carriers are now banking on customers' upgrading to pricier phones and phones services that feature picture messaging, camera attachments and other new designs. Carriers have also been trying to lure customers with new billing plans, such as Cingular Wireless' rollover plans that let subscribers keep their unused minutes from one month to the next, analysts say.

It's still an open question whether consumers have an appetite for fancy features, particularly if they must pay more for the handsets and incur higher monthly fees.

"It depends on how good a job the carriers do on educating you, (and) how good a job carriers do to tell you about these new applications like color games and why you should use them," said Alan Reiter, a wireless analyst with consultancy Wireless Internet & Mobile Computing.

Other cities where more than 60 percent of residents own a cell phone include Raleigh, N.C., with 65 percent; Orlando, Fla., with 63 percent; and Boston and Washington, D.C., with 61 percent each. The lowest percentage of any urban area surveyed during the third quarter of 2002 was 43 percent, according to Telephia. The company declined to identify that city.

Telephia's study also shows Americans are using their cell phones more than ever. About 48 percent say they made or received more than five calls a day during the third quarter of 2002, up from 38 percent during the same period a year ago, the company said.

Garrison is among those using his cell phone more, sometimes even inside his house, where he has a traditional landline phone. He estimates he uses his cell phone 15 times a day, compared with just five or six times a month for his landline phone.

"It's the convenience," he said of his cell phone. "It's always in my hand."

 

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