'Roaming' tolls to drop for many cellular users

June 24, 1994|By Michael Dresser | Michael Dresser,Sun Staff Writer

Roaming charges, the heavy tolls cellular customers pay when they use their wireless phones outside their home regions, are coming down in many American cities, the parent company of Cellular One said yesterday.

Southwestern Bell Mobile Systems, the nation's largest cellular carrier, said a series of agreements among 57 U.S. carriers cut the charges yesterday in 564 service areas, including seven of the 10 largest metropolitan areas and 49 of the top 100 markets.

The cuts Southwestern Bell listed ranged from 33 percent in New York to 65 percent in Vancouver, Wash. Cellular One's parent said 6 million cellular users will benefit from the cuts, including 2.2 million of its own subscribers.

Bell Atlantic Mobile, the Baltimore area's other cellular provider, is not a party to the agreement, but a spokesman said the company plans to cut its roaming rates nationwide by the end of the year.

Walter Patterson, a spokesman for Dallas-based Southwestern Bell Mobile, said his company has been pushing for the reductions since last September. He said technological advances and improvements in fraud prevention had lowered costs, allowing companies to pass the reductions along to the customer.

"We have found that in markets where we reduced roaming costs, usage increases," he said.

Roaming charges are collected by the customer's cellular company and paid to the carrier in the area the caller is visiting. For instance, before yesterday, a Baltimore Cellular One customer who was visiting Boston would pay $7.75 for a five-minute call to another Boston number. That charge will now be $3.75, according to Southwestern.

If the Baltimore customer calls home from Boston for five minutes, the roaming charge would be $4 less, but the long-distance rates would not be affected. Among the other markets affected by the cuts are San Francisco-Oakland (46 percent), Charlotte, N.C., (38 percent) and Portland, Ore., (50 percent).

By negotiating quick cuts in roaming charges in a patchwork fashion, Southwestern Bell steals a march on Bell Atlantic in terms of marketing but risks creating confusion among customers. Mr. Patterson said information on which out-of-market cites are covered will be mailed out in bills or can be obtained by calling the customer service department. Robert L. Johnson, regional vice president for Bell Atlantic Mobile, said his company rejected that approach. "Roaming needs to be consistent -- that's our position," he said.

The cellular phone industry is cutting prices in order to solidify its position before new competitors invade its markets, said Herschel Shosteck, a Silver Spring-based market economist who follows the industry. He cited the new breed of wireless called personal communications services (PCS), for which the Federal Communications Commission hopes to hold an auction later this year, and the MCI-Motorola-Comsat venture known as Nextel.

Cellular companies are also devising new plans for lower-cost basic service, Mr. Shosteck said. He noted a test announced by Bell Atlantic Mobile last week in Annapolis, where residents will be offered reduced-rate service within a narrower geographic region than its conventional plans, which cover the entire Baltimore-Washington market.

Those reductions do not signal any imminent cuts in charges for conventional region-wide service, Mr. Shosteck said. "They don't want to cannibalize off their current business customers," he said.

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