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Regional carriers offer wireless alternatives

To compete against the big guys, smaller carriers are offering special plans that may give customers more flexibility, value.

Many Americans may have more choices than they realize when it comes to choosing a mobile phone carrier.

The big four cell phone carriers--Cingular Wireless, Sprint, T-Mobile and Verizon Wireless--are well-known throughout the country thanks to expensive marketing campaigns. "Can you hear me now?" has become synonymous with Verizon Wireless, while Catherine Zeta Jones is the face of T-Mobile.

But in some parts of the country, especially outside of large cities, wireless customers also can choose from regional cell phone carriers that offer comparable services that often match or beat the big carriers in terms of overall value.

"Regional carriers are competing by differentiating on price or offering features that the big companies don't," said Todd Rethemeier, a senior research analyst at Sur Terre/Soleil Securities.

For example, Leap Wireless' Cricket and MetroPCS both offer low-cost, flat-rate services to consumers and business customers without contracts. Cricket's service costs $30 per month for unlimited local calling within its 21-state region. For $45 a month, consumers can get an unlimited plan that offers local and long-distance calling within the Cricket region. MetroPCS offers a $30 all-you-can-talk local phone calling plan in its five-state region, and a $40-a-month plan for unlimited local and long-distance calling within the region.

SunCom Wireless, which operates in five southeastern states, also offers unlimited, contract-free plans. But its service is much pricier than what's offered by the other two companies. SunCom's unlimited in-region plan, which includes local and long-distance calling, is priced at $60 per month. It's nationwide unlimited local and long-distance calling plan is $150.

In addition to the unlimited plans, these carriers offer many of the same services and features available from the large national cell phone carriers, such as a variety of handsets, unlimited text messaging and picture messaging, popular games, ring tones, wallpapers and international long distance.

Other carriers such as Alltel, which operates in 35 states, and SunCom Wireless offer a twist on the popular mobile-to-mobile services offered by the nationwide carriers. Customers can include up to 10 numbers in their existing phone plans, so calls made to or received from these numbers don't use up minutes. What makes this different from other cell phone services is that the 10 numbers included in the calling plan can be from a different cell phone carrier's network or a traditional landline. Mobile-to-mobile services from carriers such as Verizon Wireless are only for calls made among customers who subscribe to Verizon's service.

SunCom's 10-number plan can be added to any voice plan for $5 a month. Alltel allows consumers to add the "My Circle" 10-number calling plan to any of its voice plans for free if they already subscribe to a service that costs $60 or more.

Regional carriers are competing by differentiating on price or offering features that the big companies don't.
--Todd Rethemeier, senior research analyst, Sur Terre/Soleil Securities

Alltel, the largest of the regional carriers, offers other perks--such as credit for dropped calls--that are not offered by the big phone companies. And it lets customers upgrade or downgrade their service without restarting their service contracts. Cingular and Verizon allow consumers to make changes to their plan without reopening the contract, but Sprint resets the clock on customers' contracts every time they make any change to their service plan.

"It's really about staying in touch with customers and giving them what they want," said Andrew Moreau, a spokesman for Alltel. "That's why we offer the dropped call credit and developed 'My Circle,' because our customers wanted to get more members on their mobile-to-mobile calling plans."

But regional mobile services may not be for every consumer. For one, many of the deals offered by regional carriers apply only to calls made within a consumer's town, state or region. While these geographically limited plans may work well for people who don't travel much, they can be limiting and expensive for customers traveling throughout the country or even to the next state.

Many regional players have worked out deals with national carriers to offer nationwide coverage, but these service plans come at a price. U.S. Cellular offers plans that range from 500 minutes for $40 a month to 4,000 minutes for $200 a month. Rural Cellular or Unicel, which has built its network in parts of 15 states, offers plans that range from 300 minutes for $35 a month to 2,500 minutes for $150.

These prices are comparable to what's offered from large nationwide carriers. Sprint's plans range in price from $30 a month for 200 minutes to $100 for 2,000 minutes. T-Mobile offers plans ranging from $30 a month for 300 minutes to $130 for 5,000 minutes.

Regional carriers may also be limited in the kinds of services they offer. For example, Unicel does not offer any kind of mobile-to-mobile calling plan, because its network can't support the feature. Other carriers, such as Cricket and MetroPCS, don't offer data plans. Some of the regional carriers that do offer data plans support only 2.5G speeds, unlike the big carriers, which are all upgrading their networks to 3G (third-generation) speeds.

Unicel, for instance, offers mobile Web surfing on some phones and a wireless broadband service for laptops, but the service is limited to peak data speeds of 120Kbps (kilobits per second). By contrast, Cingular, Sprint and Verizon Wireless all offer data services of between 400Kbps and 700Kbps over their 3G networks. But Tom McLaughlin, vice president of sales for Unicel, said the 3G speed claims from the big carriers are misleading, because they are still building out their networks and are not likely offering these high speeds in rural areas where Unicel competes against them.

"Cingular can give you higher-speed service in New York City," he said. "But in Portland, Maine, they offer the same speed as we do."

He went on to say that Unicel has built its network in rural areas that have traditionally been underserved by the large carriers.

"Our New York City is a Bend, Ore., or Burlington, Va.," he said. "We spend our money in rural markets, while the big national cell phone carriers spend their money upgrading the cities first. Then they look toward the rural communities."

While choice abounds for some Americans in certain parts of the country, some analysts say that some regional carriers may soon be gobbled up by larger players as the industry continues to consolidate.

"There's room for some niche players that service a particular segment of the market," Sur Terre/Soleil Securities' Rethemeier said. "But how many of these smaller regional players survive will depend on how much they are able to differentiate themselves from the bigger players."