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No-Contract Cellular Phone Plans Bring Freedom

Posted on: Thursday, 19 February 2004, 06:00 CST

By BRIAN BERGSTEIN

NEW YORK (AP) -- The cell phone companies have most of us precisely where they want us: shackled to one- or two-year contracts, threatened with hefty fees for early escapes.

It's not exactly indentured servitude, but it still is an irksome surrender of freedom. What if service worsens, or you leave the country for a while? What if you use 800 minutes some months and 100 during others?

Some wireless carriers offer an alternative: prepaid plans.

You pay in advance for a block of minutes and get standard features like voice mail and text messaging. But there are no credit checks and often no activation fees. Sometimes you don't even have to give your name.

When your minutes are up, you simply buy more or don't - free as the wind to quit any time.

In fact, Yankee Group analyst Adam Guy predicts that most wireless subscriber growth over the next few years will come from attracting younger people and customers with iffy credit to prepaid plans.

I tested the top two U.S. prepaid services, from TracFone and Verizon Wireless, as well as a hybrid plan from AT&T Wireless. Those three accounted for 6.5 million of the 19 million wireless subscribers who weren't on traditional wireless plans in 2003. By contrast, there were 133 million customers with regular billing, according to the Yankee Group.

Prepaid airtime often costs at least 25 or 30 cents per minute, so it's not wise for big-time gabbers. But I loved the flexibility that comes without a contract.

To start a prepaid service, you'll have to buy a phone from the wireless carrier you want to use. Then you fill them with codes found on the back of special airtime cards, akin to the prepaid long-distance cards sold in convenience stores.

TracFone's service comes in several sizes, such as 40 minutes of regular, nonroaming calls any time of day for $19.99, or 400 minutes for $79.99. You get bonus airtime by refilling through the company's Web site, and minutes don't expire as long as you refill at least once within 60 days.

I found it easy to activate service online and punch airtime codes into my $50 Motorola phone, which was specially designed for TracFone to constantly display remaining minutes and when they expired.

TracFone hitches onto the phone networks of several carriers around the country. A few calls I attempted did not go through, and others took a few extra seconds to connect. Overall, though, service was clear and reliable.

TracFone lets you select a "home" calling area where you do most of your talking. Airtime outside of that region is considered roaming and drains your minutes twice as fast. That could be problematic for travelers and some commuters. The New York City TracFone zone includes northern New Jersey and Long Island, but not nearby suburbs in Connecticut.

I also got good results on Verizon Wireless' prepaid plan, recently renamed Pay As You Go.

Night and weekend calls are 15 cents a minute, and daytime minutes are 30 cents. But Verizon throws in 250 bonus weekend minutes when you activate and at least 30 bonus minutes every time you refill. The plan carries the same 60-day expiration rule as TracFone.

The service lacked TracFone's constant screen display of minutes remaining, but it has the next best thing - an automated voice at the start of every outgoing call tells you how much time is available.

During activation, Verizon let me choose an area code. Like the other prepaid plans, I could have brought an existing phone number under the new federal "number portability" rules.

AT&T Wireless' GoPhone service is not nearly as liberating. It differs from regular prepaid plans because it requires a credit card that's automatically charged once a month.

Let's say you buy 150 minutes for $29.99. You have 30 days to use them, or they're gone. At the end of the month, you're automatically charged another $29.99 for another 150 minutes.

If you run out of minutes before the end of the month, you're charged another $29.99 on the spot, and the 30-day counter starts ticking from there.

Your phone receives text messages when your balance is getting low, so it's easy to curb usage in time. But that's about the only friendly assistance I encountered.

During one stretch, my minutes seemed to drain faster than I had expected. I suspected I had been charged for two calls that hadn't connected - no ringing, nothing, just dead air on my $50 Nokia. Sure enough, when I used the GoPhone Web site to scan my list of calls, it appeared that's just what had happened.

I called customer service and was informed that if the billing system says my call went through, then it went through. Silly me.

I also protested that the online list was hard to rely on, because it was inconsistent in how it displayed incoming calls. The agent responded that if I wanted more certainty, I should upgrade to a regular billing plan. So much for customer service.

Let's hope AT&T Wireless' would-be new owner, Cingular Wireless, which has its own prepaid plan, can do better. In the meantime, there certainly are plenty of other options.

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On the Net:

Cingular Wireless

Verizon Wireless

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