http://www.nytimes.com/library/tech/98/09/circuits/articles/17cell.html

September 17, 1998


Cutting the Phone Cord to Stick With Cellular
By ROY FURCHGOTT

When Susan Kubira, an interior designer in the Chicago area, decided
to disconnect her home telephone to go completely cellular, she faced
raised eyebrows from her friends, employees and, most of all, phone
company.

Kubira, of the Chicago area, said a flat rate for 1,900 minutes of
calling time on a cellular phone had persuaded her that she could save
money by having her land-line phone disconnected.

 "They just didn't believe I wanted to do it," she said. "I said I
wanted to permanently disconnect, and the person I called said, 'O.K.,
we will temporarily disconnect.' I said, 'No, I want a permanent
disconnection,' and she said, 'Are you sure?' And I said, 'I'm sure.'
It's been eight months, and I still don't have my deposit back."

Phone companies might have to get used to it. More and more telephone
customers are cutting the cord -- getting rid of their stationary
wired phones entirely -- despite the occasional bad reception, dead
batteries and broken handsets of the wireless phones.

The changes are partly due to developments in the hugely competitive
cellular phone landscape. Increased competition has lowered prices,
and coverage areas have improved, reducing the number of cutoffs in
mid-conversation that once characterized wireless phone calls.

And the new portable phones are packed with features that make them
more attractive.

About one million customers sign up for cellular phone service each
month, and industry forecasters say the number of cellular phones in
the United States will more than double, to 113.7 million, in five
years, compared with the current 53.3 million.

Not every new cellular phone replaces a land line, and cord cutters
are still relatively rare. But the trend is growing, analysts
say. Richard Siber, who follows wireless communications for Andersen
Consulting in Boston, predicts that cellular phones will achieve "25
to 35 percent displacement" of wired telephones in five to seven
years.

Ms. Kubira decided to cut the cord when reviewing her phone bill last
January.  "I realized I was paying a lot of money for a phone to do
two things -- to sit on my bed table and to collect voice mail," she
said.

Her land-line bill ran about $80 a month for services that included an
unlisted number, voice mail and caller ID. She kept her home phone on
until January because the cellular phone service she had at that time
was expensive.

"The old service was $295 a month, but the bill was $700 due to extra
charges," she said.

She dropped the land line after subscribing to AT&T's One Rate plan,
which charges her $149 for 1,900 minutes of connection time (that's
nearly 32 hours) a month, without additional roaming or long-distance
fees.

Her cellular phone also has the caller ID and voice-mail features of a
land line, as well as a 200-name speed-dialing directory and her
favorite feature, a ringer that plays 37 tunes (her nephew likes to
set hers to "The 1812 Overture").

Mario Micheletti, an owner and sous-chef at the Tyler Point Grille in
Barrington, R.I., said he had decided to offer guests a cellular phone
rather than installing a pay phone because it was cheaper.

Micheletti said he figured that it would take $70 in calls each month
to offset the cost of installing a pay phone from the phone company in
his restaurant.  Buying his own pay phone -- even used -- would cost
about $800, he said. "Now I start to think, they had a weekend option
on this Sprint PCS, and my busiest time was the weekend," he said.

So Micheletti bought a handset for $99 after rebates, set up cellular
service with Sprint for $29.95 a month and paid an additional $4.99
for an optional service granting unlimited calls between 7 P.M. Friday
and 7 A.M. Monday.  (Sprint PCS currently offers nights and weekends
free as a promotion in some areas, including Micheletti's.) Now when a
customer asks to check on a baby sitter, Micheletti hands over a
cellular phone.

 Micheletti said he had not considered cutting his land line at home,
but he admitted that he often talked on his cellular phone even when
one of his four or five conventional phones was in reach, especially
if he was making a toll call.  Some calls that are long distance on
conventional phones are within his cellular phone's local calling
area, which extends as far as Boston, and are treated as local
calls. One reason he keeps his land line is he always knows where his
wired phones are -- which is not true with his wireless phones. "With
the one phone, I might misplace it," he said.

Robert Giovannucci, a printing broker in Los Alamitos, Calif., cut the
cord, converting his voice phone to a data line, in early 1997. He
solved the "where's the phone?" problem by having two handsets with
the same number. "One stays by my bed," he said. The other is with him
at all times so he can respond immediately to both calls from
customers and problems on printing jobs.

Giovannucci credits his new wireless accessibility for an increase in
his business's revenue, to about $2 million a year, more than double
his revenue before he went to cellular phones. He said the move had
also helped him expand his service area; he now has clients as far
away as Colorado.

"I do twice or three times the business than when I had a land line,"
he said in a call from his car.

Although he tried a pager, it didn't let him respond quickly
enough. When there was a problem with a job on the press, the printer
would stop printing and start charging a "wait fee" of $500 an hour
while Giovannucci looked for a phone.

Giovannucci has armed his two salesmen with cellular phones and racks
up close to $10,000 a year in cellular-phone fees. Even though he pays
Airtouch Cellular $125 a month for 1,000 minutes, Giovannucci said, he
and his salesmen use double that and pay a premium for going over
their allotted time.

It was happenstance that Barry Atwood became a cord cutter. Atwood, a
life insurance salesman for Allstate Insurance, said he had started
using a cellular phone because he circulates around six offices in the
St. Augustine, Fla., area.

"If people are trying to locate me, I can't give them the number to
five offices," Atwood said. "I don't know when I will be there." When
he moved into a temporary apartment, he didn't bother to get a land
line and discovered that he didn't need one.

He had intended to get a new land line when he moved into a permanent
residence because he found the 10-cents-a-minute calling plans
attractive -- until he realized that he was already getting that rate
with his 700-minutes-for-$70 cellular phone service.

"When it comes right down to it," he said, "I probably don't need a
land line -- it's a habit. A habit you have to learn to drop."

At first, Atwood said, he feared that being constantly accessible
through a cellular phone would prove overwhelming. "I thought, 'Hey, I
don't want to be reached all of the time,' but it's a phantom
problem," he said. "If I don't want to answer, I just don't answer. It
has caller ID, so I can look at it and say no, I don't want to talk to
them." Unanswered calls are forwarded to voice mail.

Many frequent cellular phone users who intend to cut the cord find
that they can't. Jordan Summers, a territory sales manager for WRQ
Inc., a software company in Seattle, has carried a cellular phone
since 1987, when they were nearly the size of suitcases. He recently
realized that he didn't need a wired phone any more.

"Even when I am sitting somewhere with a clear land line," he said, "I
just find it easier to use a cellular phone." But when it came to
cutting the cord at home, he balked because his 13-year-old son had
taken over the land line.

Cellular phones aren't always less expensive, but some cord cutters,
like Lindquist Machine Corporation, say the advantages are worth extra
expense and sometimes inconvenience.

Lindquist, an industrial machine manufacturer in Green Bay, Wis., has
replaced its central phone system with a network of cellular phones.

"Last November, we decided wireless was the way to go," said Marsha
Demuth, Lindquist's information systems and human resources
manager. The company priced P.B.X., or private branch exchange,
switchboard systems, three years ago, but decided that the up-front
costs, about $160,000, warranted waiting. "We had our choice then of
all of the P.B.X. systems, and even though they were state of the art
at the time, we heard enough to know big changes were coming."

So Lindquist kept the old system until last October, when it decided
to go cellular. Within weeks, all but the 15 data lines were
replaced. Sixty of the 140 employees were given cellular phones at
less than half the cost quoted for land-line systems.

"That's the nice thing about not having to put in major equipment and
run lines," Ms. Demuth said. The company expected phone bills to
double, but they are two and a half times as high. In July, the cost
was about $4,000.

The other 80 employees, most of whom work on the factory floor, share
the wireless phones carried by "key personnel," Ms. Demuth said, which
put phones on the factory floor for the first time.

But there were some unanticipated problems. The Ericsson handsets,
which were not designed for an industrial environment, were often
broken. Reception was poor in the metal assembly buildings and in
parts of headquarters as well.

"We have some offices that are halfway into the ground," Ms. Demuth
said, "so the people in them have to stand up when they talk to make
sure they don't lose the signal."

The company said the extra expense and problems were worth putting up
with because the cellular phones had increased the productivity of the
sales staff and engineers, and even the visiting consulting engineers,
whom Lindquist keeps extra handsets for. "They don't have to be
hunting a phone at $100 an hour," Ms.  Demuth said. Clients calling in
still get a receptionist who transfers calls, so no change is apparent
to callers.

For a lot of people who switch exclusively to cellular phones, the
best part of cutting the cord is the satisfaction of saying goodbye to
a phone company. "It felt great -- I just had them shut it off," said
Caroline Morton, a fund-raiser for Senator Christopher S. Bond,
Republican of Missouri.

Ms. Morton is still steamed about the time her home phone
malfunctioned and she had to leave work to wait hours for a repair
crew. But she restrained herself from taunting the phone company when
she cut off the service.

"I told them I was moving," she said. "I'm not a vindictive
person."



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