The Zone Hits Home: CenturyTel seeks to untether residential users

CenturyTel has taken a bold step-one that other wireless players will likely keep their eyes on-with the introduction of the Zone phone. The Zone, just launched in Grand Rapids, Mich., offers PCS in small residential areas of a few square miles at a flat rate comparable with that of landline service.

"It's the best cordless phone you could possibly get," said Steve Daigle, director of PCS development for CenturyTel. Users can sign up for an additional cellular contract to use their dual-mode phones at cellular frequencies outside their home zones. In the home zone, the phone operates in time division multiple access mode at PCS frequencies.

"The cellular network provides high mobility, and we'll use the PCS network for low mobility," Daigle said.

While some carriers may closely watch the success of CenturyTel's Zone service with intentions of following suit, others believe that bucket plans eliminate the need for such services.

Despite AT&T's much hyped Project Angel wireless local loop effort, that carrier is taking a hard look at alternative local wireless plans, an AT&T spokesman said. AT&T's One Rate plans, which include long-distance and roaming, offer users bulk minutes that encourage some to disconnect their landline phones, he said.

However, some analysts argue that the AT&T plans and CenturyTel's Zone will appeal to different types of users.

"They are aimed at fundamentally different markets," said Robert Norcross, vice president of Mercer Management Consulting. AT&T's plans, with a minimum cost of less than $90, target business users that roam nationally. CenturyTel's $39.95-a-month charge for 1000 minutes targets consumers.

The Zone targets a residential group that may not have considered bucket plans as a wireline alternative, said Becky Diercks, senior director of telecom and wireless research for Cahners In-Stat Group.

User expectations will have to be closely controlled, another analyst said.

"It's not a cellular phone, and it's not a good cordless phone," said Iain Gillott, vice president of worldwide consumer and small business telecom for IDC/Link. He warned that the battery life likely will be shorter than for most cordless phones and that users may have difficulty learning the range of their home zones.

CenturyTel sells an Ericsson phone with the Zone that offers up to 3.5 hours of talk time and weighs up to 9.4 oz.

Northern Telecom, which supplied the equipment for the PCS network, said the quality of service in the Zones is comparable with landline. Nortel used regular equipment to build out a high-quality PCS system in the zones that CenturyTel defined, said Justin Phillips, account manager in Nortel's wireless networks group. The system is designed so that a handset will first look for its PCS zone or default to the cellular network. It will not register on a different PCS home zone.

When calls reach the switch, which is shared by CenturyTel's PCS and 800 MHz networks, they are sent to an EDS billing system that rates the call, said Jeff Henderson, application development business leader for EDS.

EDS said carriers are searching for services that will help them compete, and calling zones may help change the perception of wireless.

"Carriers can take pricing off the table for their customers," said Rusty Dworkin, director of business development for EDS' communications industry group. "It can transform the way customers think of wireless phones."