As if the Texas wireless market wasn’t hot enough-with Leap Wireless International Inc. launching its Cricket Communications service left and right, and T-Mobile USA Inc. responding aggressively-a new, flat-rate wireless carrier recently set up shop in San Antonio and hopes to expand service elsewhere in the state.
Local wireless company Pocket Communications is offering calling plans to customers in the San Antonio area at prices that undercut even Cricket’s flat-rate plans, which is targeted at value-conscious customers.
Pocket customers can get a flat-rate local calling plan for $28 per month before taxes and surcharges-beating Cricket’s cheapest local calling plan for San Antonio by $2 per month. For $38 per month, Pocket offers unlimited local and domestic long-distance, plus basic features such as voice mail, compared to a similar plan from Cricket at $40 that does not include voice mail. Similar to Cricket, Pocket service does not require a contract or security deposit and has no termination fee. Pocket activation is free, as is the first month of service; Cricket is running an offer that makes both of those services free as well.
Pocket is owned and run by Paul Posner-and neither name is new to the industry. Posner is a 17-year telecom veteran who used to own a paging business, then started a company called Allegheny Communications in order to participate in spectrum auctions. Posner came out of the 2001 C- and F-block auction empty-handed, but ended up “buying distressed assets in spectrum during the [telecom] downturn,” as Posner puts it, and several 1.9 GHz spectrum licenses that belonged to the former AT&T Wireless Services Inc.
Since then, Posner said, Allegheny sold some of its spectrum blocks and is using the money to fund an expansion into the cellular business: Pocket. He recalled reading about a wireless company called Pocket Communications and liking the name; the old Pocket went out of business, the name changed hands a few times, and Posner acquired the rights to it a couple of years ago, he said.
Pocket’s CDMA network uses technology from Nortel Networks Ltd. and utilizes 10 megahertz of spectrum in the 1.9 GHz band. The carrier’s handset lineup includes about a dozen models from Nokia Corp., Motorola Inc., LG Electronics Co. Ltd. and Kyocera Corp.; according to the company’s Web site, the Razr V3c and Palm Treo 650 should be added soon. Handset prices range from $110 to $600 for the Treo, with most falling under $200.
“We subsidize handsets minimally,” Posner said. “We try to get our money back on the phone when it goes out the door.”
Posner said that his new cellular business is based on a paging model-perhaps not surprising, given his background in that business-and takes its cues from Southwest Airlines.
“They’re low-cost, they don’t over-promise, they deliver and they have very, very efficient business systems,” said Posner, adding, “They have an irreverent attitude-but they back it up.”
Pocket has kicked off a blitz of radio, TV, print and billboard advertising campaign featuring a “pitch chimp … who saves the world from the deceptive practices of `the other’ wireless phone companies.” Posner said that in addition to consumers, Pocket will target the business-to-business market in San Antonio.
Pocket has opened about 60 company stores, has signed up independent dealers and has formed a partnership with H-E-B grocery stores in which Pocket phones will be offered in 42 San Antonio-area locations.
“I think that our strength in the market is based on our strength in distribution,” Posner said.
For Posner, the chance to be a wireless operator is a goal he reached after long years of working his way up to it.
“I spent seven years working out of a 10-by-10 mini-storage office trying to get here, and Providence shined upon me,” Posner said. “It was a combination of hard work and good luck. We’re very fortunate to be here and we’re trying to make the most of it.”
Competition in Texas in general has been heating up of late, with T-Mobile USA putting money into promoting a Texas/Louisiana regional plan that includes 3,000 minutes and stepping up its policing of independent dealers as it responds to new market launches from Cricket.
Cricket has launched service in Houston, Bryan and College Station in addition to San Antonio, and plans to expand into the Austin and Temple-Killeen markets soon. At one point, Posner said, he was in talks with Cricket to do a joint venture, but the deal fell through.
“Obviously, our competition is Cricket,” Posner said. “But we are surprised by the lame operation they’re running here.” He noted in particular that Pocket’s network covers more of the area surrounding San Antonio than Cricket’s does. According to coverage maps from both operators, Cricket’s coverage is mostly concentrated within a rough circle defined by state highway 1604, while Pocket’s extends considerably outside that area.
“They don’t do anything well,” Posner said. “They’re a big company and they’re smart people and they will eventually get it together. … I think we’re going to beat the pants off Cricket.”
Posner said Pocket also plans to expand its service area, relying on wireless licenses that cover the Texas areas of Laredo, Brownsville-Harlingen and McAllen, along with Providence, R.I. and Worcester, Mass. According to RCR Wireless News’ 2006 Wireless Carrier Database, a Posner company called Punxsutawney Communications L.L.C. actually owns those spectrum licenses. But first, Posner says, the new carrier wants to make sure it doesn’t overextend itself.
“We’re looking to roll south from San Antonio as quickly as possible,” Posner said. “We need to make sure that our network and our business systems are functioning perfectly before doing any further expansion. After six weeks [since launch], we’re very pleased with the way things are going, but we do not want to over-expand before we’re sure that things are rock-solid.”
