Competitive spoils go to consumers

Competition is the watchword for wireless telephones in Boston today. Six companies are battling for market dominance by slashing prices and aggressively extending their coverage area, and consumers are ending up the winners.

But alas, being a winner isn't easy. Competition has given consumers a bewildering array of choices for wireless phones, service plans, and providers. Figuring it all out requires an education in both electronics and economics.

Conventional cellular telephones have been around since the mid 1980s, and still represent the majority of the wireless telephones that are in use today. The telephones are called "cellular phones" because of the way the wireless network is designed. Most broadcast television and radio stations use large antennas equipped with powerful transmitters to blanket an entire city with their signal. But today's wireless telephone systems use small antennas located every few miles that divide the city into small cells.

When the Federal Communications Commission set up the nation's cellular telephone system in the early 1980s, it mandated that there would be two wireless providers in every region of the country. The first company would be the region's local telephone company; the second would be the wireless competitor. Two companies was supposed to assure competition.

Instead, it created a duopoly, with the two companies closely matching each other in terms of service and pricing.

The same mistake wasn't made in the 1990s. When a new set of frequencies were opened up for wireless telephones, Congress mandated that they would be auctioned off to five different companies. The result has been the flood of competition that is lowering prices, benefiting current customers, and bringing new consumers into the marketplace.

If you see a telephone advertised for one dollar -- or for one penny -- chances are that it's a conventional cellular phone. These phones typically have batteries that last a day or so with normal use and cost anywhere between 25 cents and a dollar per minute to use. Conventional cellular systems have great coverage, but roaming outside your home area can be expensive. Another potential problem is privacy: the radio signals from conventional cellular phones can be picked up with a hand-held scanner and recorded. Both Newt Gingrich and Prince Charles found out the hard way that having a confidential conversation on an analog cellular phone is just asking for trouble.

The new digital phones are less susceptible to eavesdropping, largely because digital scanners aren't readily available. Some of the digital phones are further protected with sophisticated data encryption systems that further scramble their digital signals. All of the digital phones sound great (different phones sound better to different people), and all of the digital systems offer advanced features such as Caller-ID, call waiting, and voice-mail.

Three factors to consider when buying a phone are price, coverage, and ergonomics. The price that you pay will be a combination of the amount of money that it costs to buy the phone, your basic monthly service fee (which usually includes a certain number of minutes), and charges for additional minutes that you use each month. Some providers further charge you for long-distance charges, while others include long-distance calling in the basic price.

The second factor to consider is the provider's coverage area, which depends on the placement of radio antennas. Generally speaking, the more antennas that a company puts up, the better that provider's coverage. But every provider has holes in their coverage pattern -- a problem that's exacerbated in communities where town governments have been blocking the construction of new towers.

Before you buy a phone, see if any of your friends have a phone from the company you're considering, then spend an afternoon with them going to the areas that you frequent. You might also check the Internet, as many of the wireless companies have posted coverage maps on their Web sites.

The third factor to consider is the phone itself: Is it too big, or too small? Is the phone easy-to-use, or complicated? Do you need a phone with batteries that will last a week, or can you remember to charge your phone every night? Once again, the best way to answer these questions is to borrow a friend's phone and find out for yourself.

Of course, not everyone has the time to try out every phone. With that in mind, I've been diligently experimenting with them all over the last six months. Here are my findings:

* AT&T Wireless (www.attws.com)

If you like to make a lot of phone calls, if you travel often, or if you like to call all over the United States, then AT&T Wireless is for you.

The company's One Rate costs $89.99 per month for 600 minutes, and $149.99 per month for 1,400 minutes, and lets you call from anywhere in the United States, to anywhere in the United States, without any additional fees. It's a great deal that effectively makes a wireless phone cheaper than the conventional wired residential phone line.

If you go with AT&T Wireless, be sure get the Nokia 6160 phone. The 6160 is a dual-mode phone that automatically switches from digital to analog mode depending on signal coverage. The phone has an easy-to-use menu display and gets between three and seven days of battery life on a single charge, depending on how long you talk each day. It's also got pretty decent sound quality in digital mode, although when the phone "roams" in analog mode the signal is full of static.

* BELL ATLANTIC MOBILE (www.bam.com)

Bell Atlantic Mobile's wireless system is based on a combination of conventional analog cellular and digital systems based on Qualcomm's digital CDMA technology. To make use of this system you'll need one of the dual-mode phones that Bell Atlantic sells with its service. I tried the Qualcomm QCP-820 digital phone, which has 15 hours of battery life and the easiest-to-use interface on the market. The phone's voice quality is excellent when it is in digital mode and you are in a good coverage area, but it falls off rapidly when the phone is operating in analog mode.

Bell Atlantic's coverage in the Boston area is excellent. The company also gets high marks for customer satisfaction, having just were ranked first in prestigious J.D. Power and Associates US Wireless Customer Satisfaction Study in Boston for the third year in a row. The company's pricing is oriented toward lighter users -- 90 minutes per month for $39.99, 250 minutes per month for $59.99, although it does offer a jumbo 1,600 minutes per month for $159.99. All of the plans include free long distance service.

* CELLULAR ONE (www.cellularone.com)

From a technology point-of-view, Cellular One's digital offering is very similar to AT&T's: The company uses the same Nokia cellular phones and has a similar coverage area. Where Cellular One is different from AT&T is in pricing. As with Bell Atlantic, Cellular One has a variety of plans that trade off lower monthly fees for less air time and restricted roaming area.

That's probably a good deal for the average mobile telephone user, but not so good for a person who is looking to use a cell phone as a replacement for a land line.

* NEXTEL (www.nextel.com)

Nextel's i1000 wireless phone is not like the other cellular phones. The company's most distinguishing feature is a big button on the side of the phone that looks and functions like the "talk" button on a walkie-talkie. Just press the button and wait for the phone to beep, then talk. Your voice will instantly usher forth from the other Nextel phones in your call group.

The phone's got other unique features as well, like a built-in speakerphone, a pager, and the ability to handle more than one telephone number at a time.

The Nextel direct connect is at once a great feature and a drawback. Many construction firms, contractors, and dispatch centers have been able to replace their walkie-talkies with Nextel phones, getting improved wireless coverage and giving their employees cellular phones at the same time. But the direct connect feature doesn't work as well in a white-collar office environment, when the sound of a disembodied voice coming forth from somebody's belt can be a disorienting interruption.

Although the i1000's voice quality is better than Nextel's previous generation of phones, it's still nowhere as good as the phones designed for the other cellular providers. And I found the phone difficult to dial.

Pricing is $44.95 per month for 150 minutes, $124.95 per month for 1,200 minutes, but once again, Nextel is a bit different. Whereas the other carriers round all phone calls up to the nearest minute, Nextel bills by the second. Ultimately, that means lower bills for people who make lots of short phone calls, rather than just a few long ones.

* OMNIPOINT (www.omnipoint.com)

OmniPoint's all-digital network is based on Global System Mobile, the same wireless telephone system used in Europe. Because of the large installed base in Europe, the most advanced features are appearing in GSM telephones first. For example, Option International, a European manufacturer, sells a device called the Snap-On that lets you interface a GSM telephone with a Palm Pilot. Xircom, meanwhile, makes special cables for its laptop modems that let you connect your laptop directly to your GSM phone. And Nokia makes the 9000I Communicator, a $999 GSM telephone with a built-in fax machine, address book, and calendar.

Unfortunately, GSM in the United States uses a different set of radio frequencies than it does in Europe. If you do a lot of international traveling and you want to take your phone with you when you cross the Atlantic, you'll need to buy the Bosch World Phone ($299), which can automatically switch between the United States and the frequencies used in other countries.

Every GSM telephone is equipped with a tiny smart card, which you can take out and move from phone-to-phone as the mood suits you. This means that you can have several phones with just one OmniPoint phone number (of course, you can only use one phone at a time). It also makes it easy to upgrade from one phone to another. Pricing is similar to Cellular One and Bell Atlantic: $19.99 per month for 30 minutes, $49.99 per month for 300 minutes, and up.

* SPRINT PCS (www.sprintpcs.com)

Sprint PCS has as a wide variety of pricing plans, from a low-priced 20 minutes per month at $16.99 to its top-of-the-line 1,500 minutes per month for $149.99. Based on Qualcomm's CDMA technology, Sprint's sound quality is excellent -- as long as you are in a good coverage area. Unfortunately, Sprint has been a little too aggressive with its deployment schedule, and there are many annoying gaps throughout the metropolitan Boston area -- like Porter Square in Cambridge. Go in to a poor coverage area and you'll pay 69 cents per minute.

One truly innovative feature with Sprint is the company's "add-a-phone" program, which lets you add a second phone to an existing plan for just $14.99 per month. This means that two people can share a pretty-hefty plan and simplify billing at the same time.