Technology

Cellular confusion

Picking a phone package can he a headache

ERIK HEINRICH April 27 1998
Technology

Cellular confusion

Picking a phone package can he a headache

ERIK HEINRICH April 27 1998

Cellular confusion

Technology

Picking a phone package can he a headache

ERIK HEINRICH

As a 40-year-old television consultant, Michael McNeil knows a fair bit about technology. But even he was confused when he went shopping last month for a mobile phone. In the end, he bypassed the store displays and promotional material and asked his friends for advice. A number of them recommended signing up with Clearnet Communications Inc. of Pickering, Ont., so that is what McNeil ended up doing. So far, he’s happy with his choice, but he has yet to figure out how to program his phone to store frequently called numbers. “The problem with technology is that it takes hours to learn how to use everything,” says McNeil, voicing his frustration with the digital age.

No less baffling than the myriad features of a new cell phone are the dozens of options and calling plans now available to consumers. What is PCS? How much will longdistance calls cost? Are 100 minutes of free time per month enough? Will the service work in the United States? The questions are many, and stylish ads featuring insects or dogs—as employed by a couple of the companies—don’t necessarily make things any easier. That may be one reason why only 14 per cent of Canadians have a mobile phone, compared with 40 per cent of con-

sumers in Finland and 70 per cent of Israelis.

Part of the confusion arises from the availability of two different types of cellular systems, analog and digital. Analog, an older cellular technology that transmits calls using radio waves, has been employed since the mid-1980s by Rogers Cantel Inc. (now marketed under the Cantel AT&T name) and the Mobility arms of the regional telephone companies, including Bell Mobility, BC Tel Mobility and Telus Cellular.

In the past two years, however, the cellular business has been swept off its feet by personal communications services (PCS)— a digital technology that converts sound into bits, the same format used to store and process information on computers. Digital cell phones tend to have better sound quality, longer battery life and a lower risk of falling prey to electronic snoops, since the transmissions are harder to intercept. They also generally cost less per minute than their analog cousins. But for all their benefits, coverage remains spotty—ranging from a low of 40 per cent of the country’s population for Fido to 81 per cent for Cantel AT&T. By contrast, the analog services provided by Cantel AT&T and the regional phone companies reach more than 90 per cent of the population. The bottom line, experts say, is that

people who live outside major urban areas or spend a lot of time driving between cities or travelling are usually best off with an analog phone or a dual-mode digital phone, which automatically switches back and forth between the two systems depending on the caller’s location.

If wide coverage is less of a concern, PCS is the way to go. The main points to consider are the cost of basic service (which ranges from $20 to $25 among the four carriers) , the cost of the handset and whether subscribers must sign a long-term contract. At Clearnet, which has more than 142,000 digital subscribers, $20 per month buys 100 minutes of airtime, with additional minutes in Canada billed at 20 cents a „ minute, plus an extra 20 cents a minute for i long-distance calls. Services such as caller

0 ID, call waiting and voice mail are free.

1 Fido, which has about 100,000 subscribers I in Quebec, Ontario, Alberta and British ¡5 Columbia, also offers a $20-a-month plan £ with 100 minutes of free time, but the extras all cost money—for example, $3 for caller ID and $2 for voice mail. With an eye to heavy users, Fido offers a second plan that packages 400 minutes of time for $40 per month.

While Cantel AT&T and the Mobility companies have a combined subscriber base that numbers in the millions, their digital businesses are much more modest. Cantel AT&T has some 250,000 digital subscribers, compared with Mobility’s 66,000, for a lineup of plans that range from $20 a month to $50. No contracts are required if the handset, priced at $150, is purchased. A similar menu of choices is available from most of the Mobility members, with handsets ranging in price from $149 to $550, and some type of fixed-term contract required for most programs. All the digital providers, with the exception of Clearnet, have a feature that allows subscribers to use their phones in the United States; Clearnet expects to introduce U.S. service later this year.

Regardless of the plan, most analysts say now is a good time to take the PCS plunge. Iain Grant, a telecommunications consultant based in Brockville, Ont., says fierce competition has reduced per-minute charges to a quarter of what they were two years ago. “Per-minute rates have bottomed,” says Grant. ‘Two years ago, you had to spend $250 a month to get a rate of 20 cents a minute. Now, it’s enough to spend $40.” Further price cuts, he adds, are unlikely in the near future if for no other reason than that the industry is still struggling to earn back its investment in all that fancy new technology.