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Cellular System Operators Offer New Services to Increase Subscriber Base.

The demand for cellular telephone service is growing, but not necessarily at the pace the equipment and service providers would like. To lure more subscribers to use their cellular systems, operators are adding features such as call forwarding, call wating, three-way calling, roaming services, and even electronic mailbox service.

For those who simply cannot function without a phone, the advent of cellular telephone service has truly been a blessing. The flexibility of cellular systems allow a myriad of applications. In Minneapolis, Golden Valley Country Club, with the help of MCI Cellcom, put cellular phones in three of its golf carts as part of the club's annual opening tournament. The phones will be used throughout the golfing season as part of a two-pronged test-market program to determine if the service is viable for country clubs.

Affordability is the key word in getting more users to take advantage of the cellular services being offered. Most industry observers believe that for cellular telephone to really take off, prices for both equipment and service must come down. Almost four in ten potential owners of cellular telephones indicate interest in a cellular telephone purchase only when retail prices decline, according to "Cellular Mobile Radio 1984-1990," a study released by Venture Development Corporation (VDC). More than half those surveyed stated the most they are willing to pay for monthly cellular service (access fees plus montly charge) is under $50.

New applications for cellular services, a continued decline in the price of cellular telephones and new service options are expected toi drive the big cellular markets now in place. In its study entitled "Cellular Mobile Radio: Markets and Strategies for Providers of Goods and Services." Business Communications Company predicts that this year the US will generate $162 million in service revenues, $146 million in phone sales, and add 146,000 new cellular subscribers. By 1993, BCC projects some 1,300,000 cellular subscribers, service revenues of $967 million and annual phone sales of $532 million.

According to the Stamford, Connecticut--based business research company, cellular services are expected to quickly broaden in scope and improve in quality. The cellular systems that now provide for voice conversation and unreliable data transmission will eventually provide links to discount long-distance networks, information services, telex and packet-switching networks as well as to other regional and national cellular systems.

For those in Southern California who are looking for more than just basic telephone service, PacTel Mobile Access is offering call forwarding, call waiting and three-way calling to its cellular telephone customers. Users pay monthly charges for calling features plus the airtime used to process calls.

Washington and Baltimore-area customers of Bell Atlantic System's Alex cellular telephone service are not able to enhance their mobile communications systems with an electronic mailbox. Cellular Plus, a voice-message service of Message World that answers the cellular phone and stores, plays back and forwards messages, is currently available. Message World is not affiliated with Bell Atlantic Mobile Systems.

To make cellular telephone service even more attractive, operators are putting together deals that will allow subscribers to "roam," moving outside the geographic area in which their cellular system operator provides service, and still make calls. Earlier this year Southwestern Bell Mobile Systems announced that cellular customers in its six market cities will be able to place and receive calls in almost two dozen different cities across the country without making prior arrangements sometimes required for roamer services.

Under the terms of three agreements, cellular users from Southwestern Bell's network cities--St. Louis, Dallas-Fort Worth, Kansas City, Oklahoma City, Wichita and San Antonio--may use their phones when traveling in GTE Mobilnet's, Bell Altantic Mobile Systems' or Ameritech Mobile Communications' cellular markets. The reciprocal agreement allows cellular subscribers from the other companies to use their cellular phone in any one of Southwestern Bell Mobile Systems' six markets with no prior arrangements. In the past, advance notice was required so that cellular service providers in other cities could activate a user's mobile phone number and make necessary payment arrangements.

More options and roaming service are benefits for current cellular telephone users, but if the cellular industry is to thrive it must add new users. Part of the problem seems to be in making potential subscribers aware of cellular services. Despite extensive advertising and promotion by new system operators, consumer awareness of cellular telephone continues at only modest levels, according to the report on cellular markets published by VDC. Over one-third of potential owners of cellular telephones surveyed indicated that one important reason they have for not buying a cellular phone is that they simply do not know enough about the product. According to the Wellesley, Massachusetts-based firm, this reason was cited more frequently than any other.

VDC's report on cellular radio through 1990 notes this lack of knowledge translates into potential marketing problems for industry participants. The firm found that most potential owners could not identify cellular telephone manufacturers, current retail outlets or specify any firm purchase plans. Manufacturers' efforts have had some effect; however, about one-quarter of respondents indicated familiarity with cellular phones and some have even tried the product.

VDC's nationwide survey focused on professionals with a high probability of using a cellular telephone who lived in areas currently with cellular service. The results noted the lack of success industry participants have had in educating potential owners about cellular technology, its benefits and product features.

VDC expects the market for cellular telephone sets will be especially turbulent. While unit shipments of cellular telephones will rise 65 percent annually through 1990, pricing will be far from stable. The total factory value of shipments will grow more slowly than unit shipments because fierce competition and price-sensitive consumers will drive prices down. At the same time, technological developments in the latter 1990s will foster the emergence of a portable telephone market, according to the report. VDC anticipates that second-generation models will outpace mobile annual unit shipments by 1990.
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Copyright 1985 Gale, Cengage Learning. All rights reserved.

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Publication:Communications News
Date:Aug 1, 1985
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