Busy Signals
Negotiating the maze of wireless phone plans
By Michelle Johnson, Boston Globe Correspondent
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Monday, March 12, 2001 - Plan A includes caller ID, call waiting, call forwarding, and a wide choice of phones, but voice mail costs extra. Plan B, from another company, has all of Plan A's features, plus you get rudimentary Internet access. Under Plan C, from a third company, you get half the number of minutes offered by Plan A, but there's no extra charge for voice mail. All three plans cost $19.99 a month.
Pity the poor consumer trying to sort through cellular phone plans. While it might not be too tough to pick out a sleek new wireless phone with all the latest cutting-edge extras, choosing a service plan can be a different story.
The service plans, in fact, have become big business for the telecom companies that offer them.
And for those companies, there is little incentive for simplicity or common features that would allow for easy comparison. Packages may have similar base prices, but fees for activation, cancellation, additional minutes, roaming, long distance, and extras such as Internet access and voice mail can vary. A single company can offer several dozen different plans.
Despite recent pitches by wireless providers touting simpler plans, consumers continue to grapple with a bewildering range of options. In a recent report on cellphone plans, Consumer Reports magazine concluded that consumers still ''must navigate a maze of widely varying charges.'' The magazine surveyed cellphone users last fall and found that only about half were ''satisfied or very satisfied'' with their service plan.
''Most people overpay for telecom by 50 to 500 percent simply because they don't know what the best plans are,'' says Sasha Novakovich, president of Boston-based Getconnected.com, a Web site aimed at helping consumers comparison shop and purchase telecommunications services.
Getconnected, cofounded in 1999 by Novakovich and Tracy Lawrence, both Harvard MBAs, bills itself as an unbiased resource for consumers looking to understand the tradeoffs between service plans.
''Most of the time, [shoppers] don't even know what all their options are so it's very hard to make a good decision, because the providers make the plans very hard to compare against each other,'' Novakovich says.
At Getconnected.com, shoppers can enter a zip code to view side-by-side comparisons of Internet, cable TV, wireless, and local and long-distance phone services available in their area. They can also compare ''bundles,'' or plans that offer multiple services such as cable TV, Internet, and phone for a single rate.
Getconnected also offers tools such as a monthly bill calculator, a ''wizard'' that narrows choices based on user preferences, and a ''lifestyle'' search that will ferret out options for the ''Average Joe'' or ''Hardcore Techie.''
The idea is to help people make ''fast but good decisions,'' Novakovich says.
Adding to the confusion for consumers, pricing, features, and promotional plans are always in flux. And, Novakovich notes, when companies fold or merge the picture can get even more muddied.
But not muddy enough to stop folks from signing up. Demand for wireless service continues to rise as new services hit the market, such as voice dialing and Web-enabled phones that look and act like PDAs. The Cellular Telecommunications Industry Association says wireless service subscribers are using their phones an average of 228 minutes each month, compared to 174 minutes a year ago, an increase of 31 percent.
According to a Gallup poll conducted last year, about half of Americans own a cellphone. Twenty-nine percent of those who don't say they expect to own one within the next five years. CTIA, which conducts a semiannual survey of wireless users, found that the number of digital wireless subscribers jumped to 52.9 million last year, a boost of 89.6 percent over the previous year.
Consumer advocate Edgar Dworsky gives a thumbs up to telecom comparison shopping Web sites.
''I think these services provide an excellent source of comparison data in a confusing and complicated business. Sometimes they have data that the company doesn't even have on their Web site,'' says Dworsky, who runs his own Web site called consumerworld.org. Dworsky's service points users to product reviews, consumer news and information, buying guides, comparison-shopping sites, and online stores.
It's not just first-time shoppers who are trying to make sense of confusing wireless service plans. Existing customers are shopping around, too - primarily to save money.
A recent survey by Telephia, a San Francisco-based market research firm, found that nearly 20 percent of wireless phone users hung up on their service provider and said hello to a new one in the past year. Sixteen percent said they switched because they were unhappy with their pricing plan.
Getconnected.com is just one of a number of Web sites that offer objective pricing information and tools to help consumers find or switch wireless providers. Other players include Telebright.com, Letstalk.com, Myrateplan.com, Simplexity.com, Cellmania.com and Point.com.
Some of these sites throw in assistance via telephone and live chat as well as free phone bill analysis. Fax a copy of your bill, and you'll get recommendations for service plans based on your actual usage patterns.
While these types of sites make it easier for consumers to narrow their options, using just one of them may not necessarily give you the complete picture.
For instance, a search for wireless plans available in Boston on Getconnected returned 96 plans offered by AT&T, Cingular, Nextel, Sprint, Verizon, and VoiceStream. The same search on Telebright returned 79 plans from AT&T, MCI, Nextel, Sprint and Verizon, and Point.com turned up 116 plans from Sprint, Verizon, AT&T, VoiceStream, Cingular, and Nextel.
Why the different results? Not every plan is included in each site's database. And while each service says it strives to present users with a useful range of options, they don't promise to be all-encompassing.
Still, using the Web to hunt down the right wireless deal can potentially save time and money. Comparison shopping sites often highlight special promotions and discounts alongside pricing and other details. And search tools can quickly come up with a list of service providers matching your preferences and requirements.
Then there are the extras such as Myrateplan.com's Contract Manager, a free service that will alert subscribers by e-mail when their wireless contract is about to expire and link them to information on other plans based on their usage patterns.
A future service will send out an e-mail alert if a company runs a special or announces a plan that would lower a subscriber's bill.
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