Cellular leader cutting rates Bell Atlantic Nynex to slash prices by about 20%

September 13, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Bell Atlantic Nynex Mobile said yesterday that it will cut cellular phone service prices by about 20 percent in a plan to cut and simplify cellular bills in response to new competition.

Bell Atlantic Nynex says it is the largest cellular carrier in the nation with about 4 million users, and it is one of two major cellular firms in the Baltimore-Washington market.

But Sprint Spectrum, a joint venture of the long-distance firm and several cable television companies, shook up the Baltimore-Washington wireless phone market with last year's introduction of Personal Communications Services, a technology very similar to cellular. And the coming introduction of AT&T Corp.'s PCS service is expected to make the wireless business much more competitive than before.

"I think you're going to see them come down very quickly as PCS rolls out," said Chris Landes, a consultant with TeleChoice Inc. in Verona, N.J. "When AT&T rolls out its PCS service, which will be all over the country, there will be shock waves."

Bell Atlantic Nynex's plan streamlines rates by including a specified number of minutes in each calling plan, expanding the home area in which customers can make calls at lower local-area rates, and by eliminating some roaming charges. The changes take effect today.

The options range from a plan called TalkAlong Plus 20, which includes 20 minutes of calls per month, for $19.99 a month, up to NTC a plan that includes 1,800 monthly minutes for $199.99. In between will be a 100-minute plan for $39.99 monthly, a 400-minute plan for $59.99 a month, and a 1,200-minute plan for $139.99. The company will retain its $14.99 a month TalkAlong plan with no free minutes, a plan marketed to people who want a rock-bottom price for a phone they use mostly in emergencies.

"This is approximately a 20 percent savings across the usage pattern," said Gary Schulman, Bell Atlantic Nynex Mobile's regional president for Baltimore and Washington, who said the company's marketing showed clients wanted bills they could predict and budget for more easily. "It's the first comprehensive reworking of our price package in order to make them clear and comprehensible."

The strategy is consistent with industry trends toward simplifying billing. Consumers have told carriers that deregulation is cluttering telecommunications markets with so many complex rate plans that customers can't understand them all.

Nonetheless, Bell Atlantic Nynex's key local competitor was not impressed. "In January 1994, we introduced these [simpler rate plans]," said Jim Carter, marketing director for Cellular One of Greenbelt, a unit of SBC Communications Inc. "In 1995, a little company across town called Sprint took our ideas and took it down a few pennies. Now Bell Atlantic is following suit."

Carter said Cellular One would look at Bell Atlantic's specific rates and may cut its own if necessary to stay competitive. Landes said the industry has room to cut prices because profit margins in cellular are very strong.

Schulman said his company's average bill was consistent with national industry figures of slightly over $50 a month per customer. Industry officials have said regulatory changes approved last month by the Federal Communications Commission will cut the cost of providing cellular substantially.

Existing Bell Atlantic Nynex customers will be able to switch to the new billing options, Schulman said. Those who signed long-term contracts in exchange for incentives such as a discounted phone will still be obliged to remain Bell Atlantic Nynex customers for the duration of their original deals, he said, but they will be able to switch to the lower prices before those contracts expire.

Pub Date: 9/13/96

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