Julia Peppiatt
Princetonian Staff Writer

The surge of cell phone use around the world over the past few years has not bypassed the University community. The multitude of rings, beeps and message alerts that greet the ear when walking across campus indicate the phenomenon has pierced the orange bubble.

«I don’t know how to work my room phone,» Bradford Stevens ’08 said. «At the moment it’s flashing — I don’t know if that’s a good sign.»

Many students agree. Due to the increasing availability and convenience of cell phones, they rarely find an occasion to use their room phones.

Frank Ferrara, telecommunications department manager, said anecdotal evidence confirms the trend.

«Room phone bills have been going down over the last couple of years,» he said. «There are no hard estimates because we have no surveys out there, but [the decrease] is significant.»

Connor Cobean ’08 said he did not have a cell phone when he arrived on campus in the fall. However, his parents purchased one for him a few days later in order to cut down on long distance calling expenses.

«To stay in contact with people on campus you really need to have one,» Cobean said. «The people I know that don’t have one are hard to get together with.»

«I haven’t used my room phone once,» he added.

Erica Hsu ’05 said she also got a cell phone recently. Her parents decided to buy a family plan in order to stay in touch more easily.

Hsu admitted she has found using a cell phone much more convenient than her room phone.

«Sometimes I forget to check my voicemail and messages will stay on [my room phone] for days,» she said. «But with a cell phone, it goes around with you everywhere and it usually has a little light or beep to let you know when there’s a voicemail.»

Cell phone connect

Ferrara said the Telecommunications Office recognizes the convenience of cell phones and has tried to accommodate their increasing use on campus.

The office recently implemented a new system called Cell Phone Connect that allows room phone voicemail to be forwarded to a student’s mobile phone for $4 per month.

«We believe that if the students would rather use a cell phone for mobility, that’s fine,» Ferrara said. «[Cell Phone Connect] is a feature that we offer because we recognize the fact that many students come to campus with a cell phone.»

Many students still complain about poor cell phone service on campus, especially in their rooms and in Frist Campus Center.

«I live in the basement. I get zero phone calls,» Will Byrd ’08 said. «It’s probably because no one’s calling me, but I like to think they’re trying.»

Ferrara said several cell phone companies have not yet established good cell phone service in Princeton.

«Depending on which cell phone vendor students use, coverage may not be good on campus,» he said. «We’re working on making [service] better, but the vendors themselves need to partake in that.»

Resisting the trend

Despite the vast increase in cell phone use over the past few years, a small group of students refuses to follow the crowd. They give a variety of reasons for resisting the cell phone trend.

For some students, it is a matter of finance.

«If I were to get one I’d have to pay for it and I choose not to spend my money on that,» said Jerry Moxley ’08, a ’Prince’ Street writer.

And while Victor Amin ’08 jokes that his reason for not having a cell phone is «partly laziness,» he said using the University’s long distance phone service was cheaper for him.

Others have more philosophical reasons behind their choice.

«It’s antisocial. You can see six people walking across campus together, but not really together because they’re on cell phones,» Stephan McDaniel ’08 said. «There’s something so urgent and rude about that form of communication.»

But whatever their reasoning, most mobile-less students argue that although cell phones may be convenient, they are not essential.

They simply find other ways of communicating, such as AOL Instant Messenger.

«It’s very rare that I need one,» McDaniel said. «If you don’t have one, you have a different barometer of importance. My idea of an emergency is very different than other people’s.»

by Jill Waycaster
Special To the DM
November 16, 2004

Like a growing number of college students, Erin Smith didn’t have the phone company hook up her apartment’s phone landline when she came to college.

„I didn’t think there was a need to have a phone in my place because I just use my cell phone,“ said Smith, a junior political science major from Jackson. „I’m on a flat rate unlimited calling plan, so I don’t have to worry about going over my minutes and I always have my (cell) phone with me, so if someone needs me, they’d just call me on it.“

Smith is among millions of consumers who rely on their wireless phone as their primary phone. According to MRI Research, the number of wireless-only households has increased fourfold in the past three years, from 1.4 percent in spring 2001 to 5.5 percent in spring 2004.

Approximately 12 percent of wireless phone users are ages 18 to 24 and have disconnected their landline phone service and use wireless exclusively, according to a recent study from the Yankee Group. The trend is especially prevalent on college campuses, said Clinton Schove, market manager for Cellular South.

„Many clients are using wireless phones as their primary source of communication,“ Schove said.

„We’ve really seen the trend in the Oxford and Ole Miss area,“ he said. „One of the most attractive aspects of going wireless is that your phone number is no longer tied to a location. Instead, your number goes with you wherever you go, so you can be as reachable as you choose to be. For college students who are always on the go, this is a real benefit.“

Anna Reeves, a junior international studies major from Madison, who uses AT&T Wireless services, said she feels her cell phone offers many features and enjoys the mobility of her phone as she uses it frequently on her way to class.

„The time crunch in today’s society forces you to multi-task and the only way to do it is with a wireless phone,“ Reeves said. „It gives me access to anywhere, anytime communication.“

Allen Crain, a senior broadcast journalism major from Holly Springs, said using his wireless phone is much more convenient than relying on a landline.

„I use my wireless phone for everything,“ said Crain, a Cingular Wireless costumer. „I have text messaging and online gaming. You can’t do that stuff with your home phone.“

A study from Cahners In-Stat/MDR predicts nearly one-third of all U.S. wireless subscribers will not have residential landline service by 2008.

A study conducted by The Yankee Group attributes the decline of landlines in 2001 to the growing number of customers turning to e-mail and non-dialup Internet access, reducing the need for phone lines for fax machines and Internet connections.

According to a study from www.letstalk.com, there are three primary reasons the number of wireless-only households has increased fourfold since 2001.

A study by JD Powers found that cell phone prices have fallen 80 percent in the last eight years. The Bureau of Labor Statistics’ wireless price index shows a 30 percent decrease in cellular telephone services since 1997. BLS also found a steady increase in local phone charges and minor decreases in toll and long distance rates during the same period.

An abundance of evening, weekend, local and long distance minutes are often offered to wireless consumers at little to no additional cost. Also, special features that cost extra on landline phones – such as call waiting or caller ID – are often standard with wireless phones, the Web site said.

Wireless networks continue to improve geographic coverage with continued upgrades and build-outs, according to letstalk.com.

By Michael J. Martinez
Associated Press

• I’m thinking of canceling my land-line phone service and using my cell phone as my only phone. How do I go about it? Are there any drawbacks?

• An increasing number of cellular phone customers are dropping traditional phone service and relying on cell phones alone. According to the technology think tank Gartner Inc., up to 10 percent of the nation’s 170 million cell phone customers have given up their land lines.

The savings, of course, can vary from person to person, from $20 for basic phone customers to up to $100 or more for people who use a great deal of long distance.

Dumping your land line is pretty easy — just call the phone company and cancel your service. But before you cancel, you should review your last land-line phone statement to see how many minutes of local and long-distance calls you used, and then make sure you have enough minutes in your wireless plan to cover the added usage.

«You may find that the savings really doesn’t exist if you have to substantially upgrade your wireless plan,» said Tole Hart, senior research analyst at Gartner. «In that case, you’re simply opting for more portability, not necessarily for savings.»

Most cell phone-only customers tend to be young, Hart said, and most are single. Families find it more difficult to move to a cell-only lifestyle, as a land-line phone is often the central point of communication for everyone in the household. Family cell plans can alleviate this to a certain degree, but then the savings from not having a land line are truly buried in the costs of multiple cell phones and a high amount of usage.

While the economics may not work in all cases, the portability and ease of use does, since the chance of missing important phone calls decreases considerably, no matter where you are.

However, there are certainly drawbacks to forgoing your land-line phone.

According to a Gartner survey of 294 cellular customers who had not canceled their traditional phone service, 27 percent said poor quality of cell service kept them from making the change, while 21 percent cited costs. Another 5 percent said they would pass because couldn’t switch their fixed-line phone number to their cellular service.

By ELIZABETH LEIS, Staff Writer

Until August, Rick Jones hardly glanced at the 40-plus pages of his Sprint cell phone bill, and just paid the $300 monthly bill.

That’s when the Brooklyn Park resident discovered his ZIP code — 21225 — meant Sprint PCS thought he was living in Baltimore and was tacking on the city’s phone tax of $3.50.

The wireless carrier credited his account on the next bill, but before long, Mr. Jones, an electrician, had switched to Verizon. But he’s not any happier.

«There are all kinds of fees,» he said. «It seems like they put it in there to confuse everybody.»

He’s one of many county cell phone users who say their monthly bill, with its lists of mysterious charges, federal regulatory fees and sales taxes is too hard to decipher.

Maryland Assistant Attorney General Scott Bailey said that in the past year, the state’s Attorney General’s Office has received 463 complaints regarding cell phones. Most were regarding billing disputes.

In July, 35 states including Maryland reached a settlement agreement with Cingular, Verizon and Sprint that requires the companies to list all fees, not just the base price.

«There are very many fees that we’re talking about,» Mr. Bailey said. «There’s a cancellation fee, there’s an activation fee, there are fees that are assessed by the government and by the carriers themselves — that they call ’cost recovery’ because of government mandates.»

The latest one, the «number portability fee,» is designed to allow customers to keep their phone number when switching carriers, and to keep companies from running out of numbers.

Sprint and Verizon charge 40 cents to recoup their costs, while Cingular groups the cost of number portability under the
«federal regulatory cost recovery fee,» which is $1.05.

Then there’s the «federal excise tax,» which Congress mandated to pay for the Spanish-American War.

With 170 million cell phone customers nationwide, one can assume the government has recouped the cost of the 1898 endeavor. Since 1992, revenues from this tax on talking goes right to the Internal Revenue Service.

And more charges

Or take the Universal Connectivity Fee. Congress mandates that all long-distance providers must contribute to the fund, which is supposed to make telecommunications service like phone and Internet lines available to all.

But how much the company chooses to pass on to the customer varies.

«It’s up to the carrier what charges it accesses to customers,» Verizon spokesman John Johnson said. «Part of that is that it’s a function of the cost and what the carrier incurs — how efficient can the carrier be for local number portability, and so on.»

Another listing on bills are the county, state and federal 911 charges — they each have their own- which is helping to pay for new systems to pinpoint the location of wireless callers.

Some states allow the money to go into a general fund not necessarily used for 911 services, said Erin McGee, a Cellular Telecommunications and Internet Association spokesman.

«Most people don’t understand the additional fees — how a $39.99 plan turns into a bill of $50,» she said. «Like the E911 fee — states and cities and counties are collecting it to pay for upgrades to their 911 centers, but it’s sometimes being diverted to pay for everything and anything.»

She said Maryland ranks 34th in the nation in wireless tax percentage, paying an average of 12.55 percent of their bill in taxes.

Mr. Johnson said he sees a trend toward increasing state and local cell phone taxes on bills as «disturbing to the wireless industries and should be to customers as well.»

When County Executive Janet S. Owens proposed a 5 percent tax on cell phones in January, however, the plan received little support from state legislators who would have had to pass it.

Assuming some taxes and fees are standard on each wireless bill, customers should still be aware of lurking charges.

Some customers may be surprised to see a general category for «additional usage charges,» which could include roaming minutes or using specific services like dialing 411. Other companies may charge for downloading extras like ringtones.

Mark Luckner of Annapolis said he occasionally looks at his bill, which he thinks is supposed to be about $75 a month, but has been as high as $300.

«Every once in a while I go over (the bill),» he said. «If I had more time, I think I could get a better deal.»

Mr. Lunkner is thinking of switching to a family plan. But people who have those might be even less likely to look for hidden charges.

Aschley Cone, a St. John’s College sophomore, said though she’s had a cell phone for six years through Sprint, she has rarely looked at the bill — probably because her parents pick up the tab.

«Definitely, if it was coming out of my bank account I would pay more attention,» she said.

Boulder — Will Kuntzelmann hunches over a homework assignment at the University of Colorado law library, his laptop and cellphone within easy reach.

A business major, the 19-year-old Kuntzelmann uses a wireless connection on his laptop to surf the Internet for information on the genetic modification of food. He breaks to take a cellphone call.

Kuntzelmann, who lives with three roommates and no wire-line phone, could be a poster boy for a wireless generation.

«I don’t know anyone who has a wire line,» he said.

Men and women between the ages of 18 and 24 are driving the trend toward wireless. They make up more than one-third of the people who use cellphones as their primary phones, according to a survey by In-Stat/MDR, which provides research on the wireless industry.

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This tectonic shift in telephone service — by 2008 an estimated one-third of existing phone customers won’t have land lines in their homes — threatens the customer base and future profitability of regional phone companies, especially Denver-based Qwest, which doesn’t have its own wireless division.

In the year ended June 30, Qwest lost more than 900,000 wire lines across its 14-state territory.

A youth movement

Mobility, cheap rates, increasingly trouble-free technology and the ability to keep a telephone number even after switching phone companies have contributed to consumers’ decision to give up wire-line service, said Erin McGee, a spokeswoman for the Cellular Telecommunications & Internet Association in Washington, D.C.

University of Colorado law student Zachary Lange, 27, moved from Portland, Ore., to a one-bedroom apartment in Boulder two years ago and never thought of getting a wire-line telephone.

With his $39-per-month cellular plan, he gets services such as voice mail and caller ID that would cost extra on a traditional phone plan, along with free long-distance and free weekend calling.

For young people weaned on video games, Internet chat rooms and text messaging, the wire line can seem as quaint and unnecessary as a record turntable.

Campuses like CU-Boulder are thick with buildings that are wireless «hot spots,» where students can connect their laptops to the Internet without being tethered to a phone line.

At home, Kuntzelmann and his roommates use a wireless router connected to a cable modem to access the Internet on their laptops. With wireless technology, they can work throughout their two-story house, or in the backyard, without restraint.

«This generation is growing up with wireless,» said Phil Weiser, associate professor of law and telecommunications at CU in Boulder.

Universities aren’t the only venues where wireless rules. Coffee shops, airports, hotels and other places are catering to a wireless clientele.

The switch to wireless is expected to morph into a cross-generational phenomenon as the market matures and carriers lower prices and improve service, according to the In-Stat/MDR study. In a growing number of circles, wire-line users are becoming an endangered species.

«It does surprise me that some people have a land line. It is an extra cost that you don’t need,» said Keith Baltus, 31, vice president of strategic development at Spire Media.

With his cellphone and laptop, Baltus is a business road warrior. His phone is stuffed with the numbers he dials most frequently, making it a virtual Rolodex. The laptop is equipped with a wireless modem card that allows him to send and receive e-mail at airports and coffee shops that are equipped with «Wi-Fi» — or wireless-fidelity — technology.

Baltus got rid of his wire-line connection four years ago after buying a new house. «I wasn’t home that much, and I was paying for both (wire line and wireless),» he said.

Qwest at a disadvantage

Qwest lost 921,000 residential-phone lines, an 8.8 percent drop, for the year ended June 30, as customers cut back the number of land lines running into their homes and moved to wireless, cable or competing wire-line phone companies. Qwest also lost 287 business lines during that time.

Other large regional telephone providers such as SBC, BellSouth and Verizon lost wire lines during that period for the same reasons. But those companies have wireless businesses that can recapture customers. Qwest, which acquired Baby Bell US West in 2000, doesn’t have that safety net

US West’s wireless division provided service only within its 14-state region. Qwest decided that a regional presence wasn’t enough to compete in the market and spun off its wireless assets, which were later sold.

Today, the original US West network is part of Verizon’s national system, and Qwest resells Sprint’s service.

One analyst said Qwest’s lack of a wireless division assures that the company will eventually be sold or continue to operate with a stock price far lower than those of its peers.

«It is like the Roach Motel; there is no way out right now,» said Tom Friedberg, a Denver-based telecommunications consultant.

Qwest chief executive Dick Notebaert told The Denver Post in July that such losses won’t deal the company a death blow, but they will force it to change.

«By definition, some percentage of customers are going to opt for a different choice because of portability, mobility, price. So what you have to do is retool to be highly competitive and nimble,» Notebaert said.

To stay competitive, Qwest offers several other services: Internet telephone, long-distance and «naked DSL,» which is a high-speed phone line sold without telephone service.

But Scott Cleland, chief executive of the market-research firm the Precursor Group, said such services are unlikely to make up for the line losses.

When a company loses a land-line customer, it is losing a high-margin asset, Cleland said. Telephone companies rely on large numbers of customers to defray the substantial cost of running their networks. As customers leave, the fixed costs are spread across a smaller customer base and the companies must depend on less profitable services like long-distance, he said.

Abandoning landlines doesn’t make sense for many — yet

SAN FRANCISCO (CBS.MW) -- In a few short decades, today’s children will tell their disbelieving kids that long, narrow cords once anchored telephones to outlets in the wall.

Traditional landline phones are facing a tandem attack from Internet calling services, or VoIP, and wireless phones -- both of which offer some distinct advantages to the standard handset-and-cradle. And a small but increasing number of Americans is making the leap to the cell-phone-only life. But there are plenty of reasons to stay anchored to the landline, at least for now, particularly for families with kids.

Among the concerns cited by consumers not yet ready to cut the cord: They need their phone line for Internet access, and they don’t feel comfortable relying solely on a cell given mobile-phones’ unreliable call quality, according to a Forrester Research report earlier this year.

But these barriers will soon fall. For each concern, there is «a dynamic going on in the market that in the next couple of years will change these people’s thinking,» said Charles Golvin, a principal analyst at Forrester Research.

For instance, as people migrate from dial-up to broadband, «’I need it for Internet access’ becomes less and less important,» he said.

Plus, «cell-phone service continues to improve. The carriers invest billions of dollars every year in their networks. Some of that is about new technology, but a lot of it is about improving service,» he said.

Mobile from the get-go

Already, these barriers are nonexistent for young adults: 46 percent of those who’ve abandoned landlines are 18 to 34 years old, according to Forrester.

Some «college kids may never have had a landline. At 14 or 15 their parents gave them a cell phone,» said Allan Keiter, president of MyRatePlan.com, a consumer price-comparison site.

As colleges increasingly switch from landlines to cell phones or VoIP service, students graduate not having used a landline in years. At that point, «why do I need to get a landline?» Keiter said. «The whole mindset is different. That’s where most of the growth comes from.»

Some 5.5 percent of U.S. households, or about 5.8 million households, now rely solely on cell phones, up from 1.4 percent in 2001, according to the results of 26,000 in-person interviews by Mediamark, a market research firm.

Show me a better plan

While those who’ve already cut their landlines are young and tend to earn about $34,300 on average, those who say they’re planning to do so in the future are older and wealthier.

Forty-five percent of those who plan to abandon their landlines are 35 years old to 45 years old and earn about $58,300 on average, according to Forrester Research.

They might be waiting for some improved cell-phone offerings before they make that move. For a family of four with multiple phones at home «it could get a lot more expensive to try to replicate that (landline service) with cell-phone service,» Keiter said, given that landline services offer unlimited calling for about $35 per month.

That doesn’t include long-distance, but that’s available for less than 3 cents a minute these days, with no added fees. On a cell-phone plan, «you’re paying for every minute both incoming and outgoing. You could blow through your bucket of minutes pretty quickly,» Keiter said.

To compare options, consumers must assess the minutes they spend on the phone. Many wireless carriers offer 1,000 «any time» minutes for $39.99 plus free long distance. As a general rule, if you’re hitting 1,000 minutes or more a month, a landline is likely cheaper, Keiter said.

That’s one reason wireless providers will soon offer, for instance, family plans that combine prepaid minutes with buckets of minutes, which may inspire more people to cut their landlines.

«One of the problems with family plans is ’I give Junior a cell phone and we’re sharing the same minutes and all my minutes are gone in three days,’» Golvin said.

If the kids’ phones are prepaid, they can’t make phone calls after their minutes are used up, except for permitted calls to, say, their parents’ numbers.

Another option for consumers to consider is VoIP. For instance, Vonage offers unlimited calling in the U.S. and Canada for $24.99. See full story comparing rates.

More than 12 million U.S. households could switch to VoIP by 2009, though the young Americans who are opting for wireless-only are unlikely to make the switch, according to a new study. See full story.

Not quite wireless yet

Those interested in snipping their wires should first consider the following:

Satellite TV, TiVo and DSL connections often require a telephone line. If you’re using one of those services, it might pay to stick to your regular phone plan. Or, consider scaling back to a bare-bones phone plan, available for about $15 a month, and make your telephone calls solely via wireless.

Some credit-card companies don’t allow applicants to use a mobile phone number as the primary phone number on the account. They insist on a landline number to activate the card, Golvin said, though this may change in the future.
Wireless service usually comes with free long-distance, an added incentive to switch, but remember it’s not free if you go over your minutes. «Long-distance on wireless is free, but you’re also using up air time,» Keiter said. Overage charges now average about 40 cents a minute, far higher than the long-distance rates of 2.75 cents a minute that Keiter offers on his site. «If you have a $39.99 (wireless) plan for 500 minutes and you end up talking 600 minutes, your bill just doubled.»

When your home-security alarm rings, the system uses a telephone line to dial out. Before you cut the cord, consider asking for the latest in home security: Wireless emergency signals. «ADT and Protection One are beginning to promote wireless replacements for the security infrastructure in the house, the part that dials out,» Golvin said. «They pitch it as a security upgrade because the nasty guy could come and snip your phone wire.»

While phone companies with a stake in wireless services, including Verizon, SBC and BellSouth, aren’t about to hawk the idea of ditching landlines, the trend towards a cell-phone-only life is helping to drive a surge in bundled packages, Golvin said. That means discounts to customers who buy everything or at least a few services -- local, long-distance, Internet access, satellite television and wireless phone service -- through one company. Consider researching what deals are available before dropping your landline.

No more «phoning home.» In a cell-phone-only world, everyone has a separate number. That can be a benefit or a drawback, depending on your lifestyle. Note: Companies may soon start offering services where one call will ring two cell phones at once, Golvin said, so the married couple awaiting word from the remodeler won’t miss the call.

While an enhanced 911 system is being addressed, currently emergency operators cannot determine your location if you dial 911 from your cell phone.

By Christiana Varda
Collegian Staff Writer

More students are opting for cell phones over landlines because of the mobility and prices wireless services offer.

«It’s like carrying your home phone around with you. It’s more convenient,» said Tom Houck, manager of Immix, 134 W. College Ave.

Cell phone packages are becoming more reasonable and appealing, one reason more students and local residents are using only cell phones, Houck said.

«The [rates] are comparable to having a home phone. They have the same features, but you get to have it with you all the time,» Houck said. «It’s finally to a point where the value is there and you can replace the landline.»

Students are most interested in using cell phones because of their flexibility, said Rebecca Noah, AT&T Wireless spokeswoman.

«They’re benefiting because they’re such a mobile group,» she said.

The popularity of sending text messages has also accelerated this trend, Noah said.

«Younger students text message all the time. It seems to be the instant messaging of the cell phone generation,» Burt Thomas (graduate-geosciences) said.

A lot of students are away from home and the free long-distance minutes in cell phone plans makes them a better deal, Amy Schimmel (senior-architecture) said.

«There’s no sense in having two bills,» she said.

Schimmel said some students who have both use the landline because cell phones can run out of minutes that are already included in the price of their plan.

«You can have whoever is calling you on the cell phone call the landline and that doesn’t cost you anything,» she said.

Steve Trapnell, D&E Communications spokesman, said having a landline could offset the usage of cell phone minutes on local calls.

«If you have a cell phone and you have a package with a certain number of minutes and you’re just making local calls, you’re using those cell phone minutes,» Trapnell said. «If you had a landline you could make an unlimited amount of local calls.»

Some students also keep landlines because of security concerns, MCI spokeswoman Natasha Haubold said. Not all cell phones give the exact location when dialing 911 and landlines are not affected during power outages, she said.

«We have seen an additional use of cell phones. There are some pros and cons and consumers need to determine which solution meets their needs,» she said.

Trapnell said he could not attribute any drop in sales to the increased use of cell phones; however, he sees the trend as an added benefit for customers.

The increasing popularity of cell phones was one of the reasons Penn State did not renew the contract with the AT&T College and University Solutions calling plan at the end of the spring semester. The on-campus plan allowed students to make long-distance calls from their rooms, said Linda Witt, manager of long distance programs.

«Usage declined to less than 10 percent of students using the long-distance plan,» she said.

Thomas shares a family plan with his roommate because he said it is cheaper. He said the cell phone trend is certainly emerging among students.

«I think [it will increase] as soon as people start to think that cell phones are not just a luxury but a way of communication,» he said.

Collegian staff writer Ann Doyle contributed to this report.

Ken Vander Meeden
Better Business Bureau

Many consumers in the Grand Rapids area are discovering a new convenience: prepaid cell phones. If you need a cellular phone, but don’t want to sign a multi-year contract, these may be a good option for you. With prepaid cellular phone plans, users prepay for the airtime much like they buy prepaid long distance phone cards. There are usually no credit check, activation, monthly or early termination fees to pay.

A prepaid cellular phone comes with a specified number of airtime minutes. You can then purchase more or «recharge» your minutes online or by calling the toll-free number on your prepaid phone. With most plans, you receive an automatic warning when you need to buy more airtime minutes. Once your minutes run out, you can no longer make or receive calls.

While prepaid cell phones can be great for occasional use, the Better Business Bureau suggests you keep the following in mind:

* Be aware of the cost of a call. Calls can be more expensive on a per-minute basis with a prepaid phone plan. Some long distance calls cost twice as much with a prepaid plan compared to a monthly plan. Check the plan’s details before buying.

* Not all services are included. You may not be able to get features such as call waiting or caller ID, and you may not be able to surf the wireless Web or use your phone in an analog area. Ask your service provider about these extra features.

* Pay attention to your expiration date. Know how often you must load new minutes. Most plans require you to use your airtime or purchase additional airtime within a specific timeframe, usually 30 to 90 days. You purchase airtime in 30, 60 or 90 increment minutes. If you don’t recharge your airtime before the expiration date, your service may be deactivated. Read your carrier’s policies carefully.

* Ask the service provider about their coverage area. What good is a cell phone with a small area or poor call sound quality?

* Be aware that incoming calls and voicemail messages can deplete your minutes.

* Ask if you will be charged for incoming or outgoing calls that are not answered.

Before deciding on a service provider, be sure to check the company out with the Better Business Bureau. Visit our Web site, www.grandrapids.bbb.org, or call us 24 hours a day at 1 (800) 6 THE BBB. If you have problems, use our Web site complaint form or mail details to us at: BBB, 40 Pearl, N.W., Suite 354, Grand Rapids, MI 49503. Our office serves Ottawa and Allegan counties.

Ken Vander Meeden is president of the Better Business Bureau of Western Michigan.

Virgin Mobile, the UK cell phone company launched by entrepreneur Sir Richard Branson, made its stock market debut on Wednesday July 21st, raising an estimated 125 million pounds (US$231 million) for the company.
Britain’s fifth largest cell phone company, Virgin Mobile set an IPO price of 200 UK pence ($3.70) for its equities on the London Stock Exchange, which valued the company at around 500 million pounds ($925 million). During trading on July 21st, the shares rose to 203 pence ($3.75).

J. P. Morgan Chase and Morgan Stanley acted as managers for the IPO.

Lower Value

Because of tough market conditions, Virgin Mobile, which only has operations in Britain, had to cut its IPO price. It had originally hoped to set an indicative price range for the stock of 235 to 285 pence ($4.34-$5.27), which would have raised between 588 million pounds ($1.08 billion) and 713 million pounds ($1.31 billion). But investors baulked at paying this price, forcing Virgin Mobile to set an IPO price of 200 pence.

The shares in Virgin Mobile were sold by the company’s majority owner, Sir Richard Branson’s Virgin Group, which says it plans to use the proceeds from the IPO to fund investment opportunities in its global operations. The group of businesses includes airlines, credit cards, music stores and cell phone companies in Australia, the U.S. and Canada.

In total, Virgin Group sold 62.5 million Virgin Mobile shares, representing 25 percent of its holdings in the company. However, Virgin Group says it could sell an additional 6.25 million shares in Virgin Mobile if there is the demand from investors. Selling the extra shares would take Virgin Group’s total disposal of Virgin Mobile stock to 27.5 percent of its total holding.

Price War

A key factor that affected Virgin Mobile’s IPO stock price was investor concern about a cell phone airtime price war in the UK. Virgin Mobile is entirely UK-based and, unlike rivals such as Vodafone and Mm02, does not own a network, as it leases capacity from cell phone operator T-Mobile . So a price war could be very damaging to Virgin Mobile’s profit margins. Analysts do not think that Virgin Mobile would be able to get better terms from T-Mobile, should it have to cut its airtime prices.

But Virgin Mobile says that acting as a «virtual mobile network operator,» with its traffic being carried over T-Mobile’s network, allows it to maximize its main strengths -- branding, marketing and customer service -- without having to invest in building its own network.

At the end of May, Virgin Mobile, which was launched in November 1999, had 4.1 million customers. Around 95 percent of its customers buy their airtime on a pay-as-you-go basis, using pre-pay phone cards. In the UK, pre-pay has replaced monthly subscriptions as the most popular way of paying for airtime, as it reduces the customer’s financial commitment.

By LARRY MARGASAK
ASSOCIATED PRESS WRITER

WASHINGTON -- First there were misused Pentagon credit cards. Now come misused phones. Investigators say the Navy routinely paid exorbitant telephone bills, wasted calling plan minutes and couldn’t identify who made credit card calls that in some cases lasted for days.

The Navy’s management of phone cards and long-distance plans «creates a fertile environment for fraud, waste and abuse,» the General Accounting Office said in an investigative report obtained by The Associated Press,

The phone problems are the latest revelations to concern members of Congress, who already have heard horror stories about Pentagon employees using government credit cards to make personal purchases at hardware, electronic and lingerie stores, even strip clubs.

The Navy is wasting valuable telephone money while «families are forced to send their sons and daughters deployed around the world calling cards to phone home,» said Rep. Jan Schakowsky, D-Ill., who requested the investigation of Navy phone expenses.

That investigation painted a portrait of shoddy management in which Navy superiors didn’t even know they were paying for telephone calling cards, and employees on expensive cell phone calling plans weren’t using 98 percent of their allowable minutes.

Congressional investigators could not determine whether calling cards were used for personal long-distance conversations, because Navy officials who approved the charges often were unable to identify the callers.

A Navy spokeswoman, Lt. Amy Gilliland, said only, «The Navy will review the final report once it is officially released.»

The investigation was limited to a half-dozen facilities, but the GAO said that was enough to determine the Navy wasn’t watching its telephone spending with a critical eye. For instance:

-One location paid $36,000 over three years for long distance services that were no longer needed.

-In addition to wasting unused minutes, other cellular users cost the Navy $34,000 by exceeding their allotted monthly minutes.

-Units paid $25,700 for late fees and other erroneous charges.

The bill with calls exceeding 24 hours was found at a computer and telecommunications facility in Norfolk, Va.

«These calls included 4-day, 10-day and 12-day phone calls, which all originated from different phone numbers at different times,» the report said. «The length of these calls alone should have prompted further investigation but, because the invoice was never properly reviewed, the billing errors went unnoticed» until found by investigators.

Looking closely at 10 of the calls, inspectors found, «In 7 of the 10 cases … officials who approved the invoices could neither provide us with an explanation for the length of the calls nor could they provide us with valid points of contact for the activities responsible for the calls.»

Investigators learned two calls apparently resulted from circuit malfunctions and the Navy has sought refunds from the vendor, the report found.

Shared calling cards were especially vulnerable to potential fraud, the report said. An official on the destroyer USS Mitscher said he gave the same card and personal identification numbers to several officers as needed, but lost track of how many had the information.

«For this one card alone, between April and June of 2003, the Navy paid over $17,000 in long-distance charges,» the report said. On July 6, 2003, users of the card made 189 calls that originated from 12 cities in five states and Canada. The calls went to 12 countries, totaled 55 hours and cost more than $5,000.

«Some of the Navy sites we audited were unaware they owned calling cards,» the investigators reported.

Navy units also paid the full retail rates for cell phones, ignoring a 12 percent discount for government users negotiated by the federal General Services Administration.

Some cellular users were paying $95 per month for service plans but using less than an average of 2 percent of their allotted minutes. In one unit, excess usage charges ranged from 20 to 35 cents per minute, investigators found.