TDMA Phone Roundup

Digital phones are hot items as carriers try to phase out analog and nudge their customers to digital. And although analog isn't going away any time soon, the industry is headed down a 1-way road. To support the carriers in their efforts to satisfy the high-end users who already have made the switch and to help them entice the window-shopping crowd, vendors have designed a selection of snazzy phones.

This phone roundup lists the TDMA offerings, which either are currently available or will become available sometime during the year. Watch for the May 15 issue in which CDMA phones are comparatively speced, and the June 15 issue for GSM highlights.

The consumer migration to digital is a continual process. And although educating consumers will play a large role in the digital sale, it's important not to get the cart ahead of the horse. Digital is not the end-all and be-all for every consumer, at least not yet.

"I think we went naively as an industry in thinking that all we had to do was put the word 'digital' in people's ears, and they would make what has turned out to be a much more extended transition," said Josh Kiem, Motorola's Cellular Subscriber Sector director of marketing. "But when we did take it out to the market, what really started to move things was the carrier disincentives for analog combined with new services and new competitors."

Kiem said when carriers first started offering phones for a dollar to try to increase subscribers, many customers may have thought they were getting a steal, but he said that after awhile, most of the people did understand that the phones weren't really subsidized by the carrier; they were financed by the carrier.

"There's only one way that money permanently enters our industry, and that's because someone wants to make a telephone call from a wireless phone," Kiem said. "That person pays for the device and the service. You can move that around as to whether there's an up-front charge, or monthly charge in a variety of ways, but the changes in the cost of ownership are due more to the number of competitors than to the difference between digital and analog."

Although Cellular South rolled out its first digital service area on March 23, the company isn't trying to create a wholesale conversion to digital throughout its markets, said Carroll Blackledge, director of marketing.

"It's not going to be a product for everyone," Blackledge said.

He said there are two main drivers for Cellular South's digital roll-out. One is that many customers said they wanted digital; the other is that the company now has its first PCS competitor in one of its markets.

"We want our customers to know that if they hear about digital and, based on what they hear, if they want to check into it, that they can come to us," Blackledge said. "We will be glad to convert those customers that want digital, and we are offering the phone and the service at a low price point as an incentive, but because we are a smaller carrier, capacity is not as much of an issue for us. Many of the carriers are being forced to digital for capacity reasons. We are not."

Because digital is more efficient than analog, carriers do have a great incentive to push customers in that direction, but it may seem like an uphill battle as some customers still request analog service. You have to explain to customers that the money they pay for the phone can be made up quickly through the features that come with digital service, such as first incoming minute free and voice mail, said Jeff Battcher, BellSouth manager of media relations.

Sometimes it works, and you have successfully made another digital conversion, but sometimes, all they really need is an analog phone for safety and security reasons. "Our digital penetration continues to increase month after month, we're selling more digital phones, and it's becoming an easier and easier sale," Battcher said.

But, in the end, BellSouth wants the customer, he said, even if it means selling him analog service.