Operators with new 1900 MHz personal communications services networks need add-on services that are meaningful revenue generators and offer something customers repeatedly need, says one such service provider.
“The cost of acquiring a subscriber can be as low as $300 to $400 these days,” said Mark Lazar, chief executive officer of Toll Free Cellular. “Those costs have come down, but revenue per subscriber is down also. The payback can be very long for new subs.”
But additional revenue doesn’t have to come directly from subscriber bills. Airtime can be generated by the customer, but billed to the account of a local business which advertises “call us free, #800 on your cellular phone.”
Toll Free Cellular has created such a system, of which it is the middleman. It coordinates contracts between Godfather’s Pizza and AT&T Wireless Services Inc., for example. The pizza maker pays Toll Free a monthly fee and pays for all incoming airtime minutes. The average call is about two minutes, and generally translates into a sale.
AT&T is paid for the airtime. Everybody wins, Lazar says.
Toll Free has operated the service since November of 1995 in Seattle.
“The first year, we had over 100,000 calls. As of today, 140,000. That’s 25 percent penetration in the first year, better than any other add-on service I know,” Lazar said.
Two thirds of those people are repeat callers, he said.
Seattle-based Toll Free is the marketer, the idea company. It has contracted with two companies to build the network part of the system. Olympia, Wash.-based Illuminet is the network provider; Phoenix-based AG Communications Systems developed the software for the intelligent network solution.
“We make one-time changes in the carrier’s network that allows them to access our intelligent network,” Toll Free said.
Toll Free is expected to announce new carrier contracts at the Cellular Telecommunications Industry Association show in San Francisco this week. It recently received new funding that will allow it to expand the Toll Free concept nationwide.
