Alltel Offers Cellphone Plan With Free Calls to 10 Numbers

The New York Times reports that Alltel announced a new service plan, which will allow customers to "make free calls to any 10 numbers regardless of the cellphone or land-line carrier of the person being called. The "My Circle" plan, a first among major carriers, is premised on statistics that show that many consumers make most of their calls to about half a dozen numbers. Alltel expects that if customers can call these popular numbers free, they will have more minutes left over to call other people."

The article note other network operators "have recognized the same trend, but their plans typically provide free calls only to customers who use the same wireless provider."

The Alltel "My Circle" plan "will be available to customers with plans that cost at least $59.99 a month and offer 1,200 minutes. Customers can choose any 10 numbers, whether on a wireless or convention phone network, and the numbers can be changed at any time on a special Web site."

Alltel operates in 36 states, including most of the Southeast, Midwest, Southwest and Rocky Mountain states. Alltel also provides service in some parts of Connecticut.

David Chamberlain at In-Stat said, "They make it look a heck of a lot better than it really is. We buy such big buckets of minutes, and the minutes and prices are going up, but we're not really using many more minutes."

In Advertising Age, Roger Entner at Ovum said, "It's very big," and "other carriers are likely to take a wait and see attitude before trying to match the offer." Entner noted that "although Alltel is a regional carrier strong in suburban and rural areas, and is not located in large cities such as New York or Los Angeles, it is No. 1 or No. 2 in the markets it serves." However, he said Alltel's growth "hasn't been spectacular."

At BusinessWeek, Albert Lin at American Technology Research noted that "the average mobile user in the U.S. spends only about $40 a month on voice service." Lin thought "Alltel's hope, that people will want to drop other carriers and migrate to it, isn't likely to be rewarded."

Lastly in Sci-Tech Today, Ovum analyst Roger Entner pointed out that "My Circle," "is aimed at eliminating irksome "overages," the high fees of about 45 cents a minute that hit customers when they exceed their monthly rations." He said, "About 20 percent of wireless subscribers go above their allowances at least once a year, generating about 15 percent of wireless revenue." Entner added that "overages have fallen in recent years from about 20 percent of revenue as carriers have increased the minutes in monthly plans. Still, they remain a wireless customer's pet peeve."

Chris King at Stifel Nicolaus remarked that the $60 monthly plan minimum is pricey and might discourage "people who don't regularly go over their bucket of minutes." Entner countered that "the feature is designed for heavy users who typically buy higher-priced plans."