Isle consumers dialing
up some good deals for
wireless phones

With more companies entering the market,
prices are coming down and new
features are adding up

By Rob Perez
Illustration by Bryant Fukutomi

Take two established businesses offering competing services, throw another aggressive company into the mix to stir things up and line up at least two additional players to create even more market havoc.

What do you get?

A consumer bonanza.

Welcome to Oahu's wireless phone world. Thanks largely to the wonders of competition, consumers today can get more for their dollar than even a year ago. Rates generally are down, features have been jazzed up and more services are being offered.

The marketing slugfest currently features three carriers, each zealously trying to protect or boost their share of the nation's most heavily penetrated wireless community (roughly 25 percent of Oahu's population).

If you think the battle is intense now, just wait.

A new carrier is expected to jump into the fray in a matter of weeks, another is scheduled to start in March and more are bidding to enter the market.

All that bodes well for consumers. As carriers come on line with excess capacity, they'll need a hook to attract customers. The most likely lure: lower rates, beefed-up services or both.

While good for the consumer, the increased competition could spell trouble for the industry. Some executives question whether the local market can support five wireless carriers, let alone the 10 or 11 (some offering specialized services) that officials say could eventually be here.

"I foresee a shakeout," said Kerri Hahn, GTE Mobilnet marketing director, echoing the sentiment of others in the industry. "In the long run, you'll end up with a few carriers surviving."

In the short run, consumers clearly will come out ahead, just as they've benefited in recent months.

Rates at GTE Mobilnet and Honolulu Cellular, the two established players, have dropped since last year.

The decline at Honolulu Cellular has been as much as 35 percent for rates geared toward medium and heavy users, according to Robert Osias, general manager of the company.

At GTE Mobilnet, rates and access fees have been reduced across the board, Hahn said. For its low-user plan, for instance, rates last summer were 75 cents per minute during peak hours; today, that plan has a 35-cent rate, no matter when the call is made.

Indeed, carriers have eliminated differences between peak and off-peak rates for most of their plans, trying to bring more simplicity to what can be a baffling maze of customer choices.

And it's not just rates that have been affected.

GTE Mobilnet has eliminated activation fees. Honolulu Cellular has added emergency roadside service as part of its lowest-priced plan, though the monthly fee has been increased slightly. VoiceStream Wireless, which launched Hawaii's first digital wireless network, called personal communications services, in February, has done away with one-year contracts for new customers - historically a fixture of the industry.

Some of the changes predated VoiceStream's entry to the market, but many have occurred since then.

The level and frequency of promotions also has been stepped up. In any given month, each carrier typically will have a special promotion designed to lure new customers.

When only two carriers were in the market, most of the promotions focused on the price of the phones. Now that the basic phone is essentially given away (except the PCS kind, which costs about $200), the specials focus on rates and services.

VoiceStream, for instance, is enticing new customers with 1,000 free weekend minutes - but you have to use them within 31 days. Honolulu Cellular is providing free weekend calling through January and eliminating charges on in-bound calls, also through January, if you sign a one-year contract. Likewise, GTE Mobilnet is offering 50 percent off monthly access and air-time charges through December.

All the promotions and varying rate plans make comparing the carriers' offerings very difficult, consumers say. And it likely will get more confusing as other companies enter the market, adding more choice to the mix.

PrimeCo Personal Communications is scheduled to start Oahu service within the next month. Pocket Communications is targeting a March launch. Neither PCS company was willing to discuss rates or features, underscoring how competitive the industry has become.

The federal government currently is auctioning three more PCS licenses for the Honolulu market, opening the doors for additional players.

Courtney Brown, chairman of the Coalition for Competitive Telecommunications, sees the battle shaping up according to marketing prowess.

"The winners and losers will probably be determined by the kind of marketing machines they have, much more so than the technology they have," he said.

For consumers, that will mean having to do lots of homework before selecting a carrier, he said.

"It's going to be like buying a car," Brown said. "You'll have a lot of different models with different features, and you'll have to learn all about the differences."

Michael Johnson, resident manager for a Waipio townhouse complex and a VoiceStream user, believes customer service will become even more critical as competition increases.

"If you're not treated with respect, you're going to shop somewhere else - no matter how cheap the (phone) service is," Johnson said.

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