Don't be seduced by free cellular phones. The best way to get the most cost-effective service is to ferret out the best package for your needs first. Then look for the free phone that goes with it. Or use a phone you already have; coming to the deal with your own hardware doesn't affect the service price.
Shop around, advises Jeffrey Kagan of Kagan Telecom Associates, in Atlanta. He suggests contacting resellers, who buy cellular services in bulk and then resell them at discounted rates. (MCI Cellular and AT&T Cellular, two of the largest resellers, offer nationwide service.) But don't restrict yourself to jumbo-size service providers in large cities. Most small providers located just outside large cities operate under the umbrella of large parent companies. They have the larger company's marketing, brand name, and expertise behind them, yet they typically charge lower rates. To find them, check local-newspaper ads and the yellow pages, or call your local chamber of commerce.
Cellular-phone service providers handle only local service. When they ask which long-distance service you want, specify your current long-distance carrier. Then call that carrier and request that your cellular-phone usage be added to your existing account. That way, any business discount you receive will be applied to your cellular-phone usage, saving an average of 25¢ a minute.
Most users fall into two categories, says Kagan. Heavy users are on the phone more than 10 hours a month; light users, less than an hour a month. Place yourself in a camp, and then start digging up deals -- it's worth looking around, since prices vary. Inc. called a sampling of cellular-service providers in midsize cities across the country and asked which packages they'd recommend for the two types of users. Here's a sampling of the price ranges we found:* * *
Customer A: Uses phone less than one hour a month
Customer B: Uses phone more than 10 hours a month* * *
Base monthly rate
Customer A: From $19.95 a month, including 15 minutes of calling time, to $29.99 a month, including 40 minutes of calling time
Customer B: From $89.99 a month, including 275 minutes of calling time, to $159.95 a month, including 650 minutes of calling time
Tip: Often the service provider will waive the setup charge, the onetime fee to activate the phone. Make the request -- it can save you $50 or more. Some service providers offer discounts for multiple users who sign up at the same time -- try to round up several people in your company or several soloists who all need service at the same time.* * *
Additional per-minute charges
Customer A: From 36¢ to 49¢ a minute during peak hours; from 10¢ to 25¢ during off-peak hours
Customer B: From 25¢ to 35¢ during peak hours; from free (during the first three months) to 21¢ during off-peak hours
Tip: You can negotiate with some service providers for a block of free usage time -- 100 minutes, for example. Also, if you sign up with other users and negotiate a lower monthly rate, you may qualify for lower per-minute charges, based on the total minutes the group uses each month.* * *
Additional roam charges (fees for calling out of the local service's covered area)
Customer A: Up to 65¢ a minute; varies depending on area
Customer B: From 49¢ to 65¢ a minute
Tip: Roam charges aren't normally open to negotiation. Fees depend on how far from the service provider's covered area the call is made.* * *
Length of service contracts
Customer A: From no minimum to two years
Customer B: From one to three years
Tip: Prices can often be negotiated by signing up for a longer contract. One service provider cuts monthly service charges by about 10% on extended contracts. Signing up for shorter terms may mean you pay a token amount for the phone itself.
-- Robina A. Gangemi