Cellular One of Washington, D.C./Baltimore is introducing an off-the-shelf, no-contract cellular service package called Speak Easy.
The package costs about $200, includes Motorola Inc.’s TeleTac phone and a free one-year subscription for analog cellular service. The monthly access charge is about $15 thereafter.
Calls made within the customer’s chosen “home zone” are billed at 39 cents per minute. Airtime outside of the zone costs 99 cents per minute. Emergency calls to 911 are free, the company said.
Six zones are available: Baltimore City, Baltimore Suburban, District of Columbia, Washington Suburban, Rural Virginia and West Virginia, and Eastern Shore.
“Through research, we learned that customers are often times hesitant about purchasing a cellular phone. They shy away from the contracts and don’t want the hassle of choosing from the myriad of rate plans,” said Steve Sitton, Cellular One Washington/Baltimore’s president and general manager.
“To meet their needs, we created Speak Easy, which simplifies the buying process and makes it easy for people to purchase and use a cellular phone,” he said.
The new service package compliments the company’s existing Safety Link product, said Director of Marketing James Carter. “Both Safety Link and Speak Easy are local-service oriented,” he said.
Safety Link costs $14 per month with 34-cent per minute and 99-cent per minute airtime charges for inside and outside the home zone, respectively. But it requires a two-year contract plus a credit check and deposit.
Potential subscribers are “concerned with length of contracts, the terms of contracts and contracts altogether,” Carter said.
He notes that between 25 percent and 35 percent of new customers industrywide are required to make deposits ranging from $250 to $1000.
“We’ve seen a strong desire from our customers for this kind of product that doesn’t require a contract,” he said.
“The main change over the last three years in the cellular industry is the equipment cost decline. We can now afford to do an off-the-shelf product that can be sold in non-traditional channels and still make a profit,” he said. “This gives us a product for the first time that can be packaged as a gift.”
And because the package includes an analog phone, it requires very little subsidization compared to a digital package.
“We build value back into the equipment so the customer knows what they’re getting. We have very little at risk. The phone has been paid for,” he said.
Cellular One of Washington/Baltimore-owned by Southwestern Bell Mobile Systems-has implemented digital Time Division Multiple Access technology in the market’s core service areas but Carter said the company has not decided on introducing a similar digital service package.
“We want to try Speak Easy first and look for market reaction before we try any `Sons of Speak Easy’-type products,” he said. “We’ll know better in six months.”
Both of Cellular One’s competitors in the Washington/Baltimore market-Bell Atlantic Nynex Mobile (cellular) and Sprint Spectrum L.P. (personal communications services)-also offer phone-in-a-box products but with varying contract, deposit and monthly access charge terms.
