WIRELESS PHONE WAR HEATS UP : NEW TECHNOLOGY CHEAPER, CLEARER.

Byline: Mark Landler The New York Times

The wireless telephone war has begun. And if the industry scouting reports are right, it promises to be as clamorous as the wired war between long-distance carriers like AT&T, MCI and Sprint.

Omnipoint Communications began offering a new type of cellular service in the New York area last week for rates that are about 15 percent lower than those of conventional cellular. Primeco Personal Communications said it would introduce a comparable new service in 16 cities, including Miami, Chicago and Dallas, for monthly rates that are about 5 to 10 percent less than cellular prices.

Advocates of this new technology, called personal communications services, said it delivers crystal-clear sound quality and allows people to use their hand-held phones for everything from sending e-mail to reading the latest news headlines.

For the average phone-toting customer, however, PCS may make a splash for a more basic reason: It is cheaper.

``The long-distance industry exploded after prices fell and the number of choices increased,'' said Jeffrey Kagan, president of Kagan Telecom Associates, an industry consulting firm in Atlanta. ``Now the cellular industry will explode for the same reasons.''

With three or more new wireless companies swarming into New York City and every other large market to take on the two cellular companies in most cities, Kagan said that the wireless industry would be marked by the same fierce price competition that drove down long-distance rates since the breakup of AT&T in 1984.

The new technology is similar to cellular in most respects except that the signals are transmitted at a higher radio frequency and with lower power than cellular signals. As a result, PCS phones generally have clearer sound than cellular phones. They can also transmit substantial amounts of data, in addition to voice signals.

The influx of new competitors means cellular service - still largely a tool of business users or affluent consumers - is likely to expand well beyond the estimated 40 customers now toting wireless phones in the United States. Some industry forecasts see 125 million wireless subscribers by 2004.

``Our goal is to bring our prices closer to traditional phone rates,'' said George F. Schmitt, the president of Omnipoint.

The mere threat of new PCS rivals recently persuaded Bell Atlantic Nynex Mobile, the largest cellular provider in New York, to lower its monthly rates. The city's other big cellular carrier, AT&T Wireless, has rolled out a digital version of its existing cellular service that offers many of the features of the new technology and similar rates.

Omnipoint plans to sell its most basic package of service for $19.99 a month, plus a per-minute rate for calls that is roughly 20 cents less than Bell Atlantic Nynex Mobile's current rate of 69 cents a minute.

Bell Atlantic Nynex Mobile, however, beats Omnipoint on two other measures of overall cellular cost. Its basic monthly fee for service is $18.99, versus Omnipoint's $19.99. And Bell Atlantic Nynex's least expensive hand-held phone sells for $149.99, versus $199.99 for Omnipoint.

For a customer trying to weigh all these prices, the wireless battle will probably wind up looking like the long-distance marketing wars, in which AT&T, MCI, and Sprint devised complex calling plans, then bombarded consumers with their competing promotions.

In New York City, Omnipoint is only one of three would-be competitors. Sprint PCS said it planned to begin service in the city sometime in the next few months. And Nextwave Communications has bought federal licenses to offer personal communications services in the New York market, though several analysts said Nextwave's plans to build a network were still uncertain.

Despite the competitive pressure toward lower prices, Schmitt and other PCS executives insisted they would not engage in an all-out price war. They said providers of the new technology would be able to set themselves apart from the cellular companies with better sound quality and more sophisticated features.

CAPTION(S):

3 Boxes

Box: (1) Omnipoint Communications

(2) AT&T Wireless (Enhanced)

(3) Bell Atlantic Nynex Mobile