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Archive for Sunday, May 19, 2002

Wireless firms put quality to test

Can you hear me now?”

May 19, 2002

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— Tim Urton gets some satisfaction out of seeing the Verizon Wireless television pitchman traveling the backroads and repeatedly asking folks back at the office, "Can you hear me now?"

After all, he said, imitation is the sincerest form of flattery.

Urton is one of about 60 drivers who cruise Verizon's service area from Texas to New England in high-tech station wagons outfitted with banks of cell phones and computers.

Every 170 seconds, the phones dial out or receive a call to test the clarity and reliability of the company's service.

The process is expensive and time-consuming, but success in the crowded wireless market hinges on the fewest dropped calls and dead spots in the broadest service areas.

"We know we have holes in our system," Urton said. "We know our competitors have holes in their systems. Our job is to get out there and fill the holes."

Despite a growing number of mobile phone users more than 123 million and plunging per-minute prices, wireless service in the United States can be surprisingly mediocre when compared, for example, to the European variety.

According to the J.D. Power and Associates customer survey, the cost per minute for wireless service in the United States has dropped from 56 cents in 1995 to 14 cents last year. In the survey's latest results from last year, more than half the households in the 25 largest U.S. markets had wireless phone service.

Wireless companies are seeing their income per customer drop and the cost of getting and keeping new customers increase, according to J.D. Power and Associates. It put the cost of acquiring each new customer between $350 and $475.

Verizon isn't the only company looking for holes.

Cingular Wireless based in Atlanta does some of its own testing. "It's part scientific and part burning a lot of tire rubber," spokesman Clay Owen said.

Cingular also uses third-party tester Telephia, a 4-year-old wireless market analysis firm that says it observes 1 billion wireless calls a day on average.

Telephia's research is sold to subscribers and not released to the public, said company spokesman Alex Van Kroh. Owen said Telephia is to the wireless industry what Nielsen ratings are to the television business.

But Verizon, the country's No. 1 wireless company with nearly 29 million customers, prefers to use its own people, company spokeswoman Brenda Raney said.

Verizon's high-profile signal testing is also good marketing, says independent industry analyst Jeff Kagan, as it battles to discourage what the industry calls churn customers changing providers.

Churn can run as high as 30 percent a year and is a big problem for the wireless sector, Kagan said. Customers will leave for as little as $10 a month savings. But that changes if customers think they are getting a larger coverage area from one provider.

"That's job No. 1, that's the tires on the car," Kagan said.

Most of Verizon's road warriors have engineering experience, but Raney said their enthusiasm for their work sets them apart.

"You can't outsource that," she said.

Urton drives about 6,000 miles a month. Much of that is in rush-hour traffic in major cities in the Carolinas and western Virginia.

"If I have to sit in traffic one hour to get a mile, that's what I have to do," the retired U.S. Marine said.

And the program is not cheap.

Urton's car, a Ford Taurus wagon outfitted with two silver boxes filled with eight phones and two laptop computers, costs about $270,000.

Only $20,000 of that is the price of the car.

It costs about $15 a mile to operate the cars, too.

Part of that expense is paying for service on competitors' phones that Verizon also tests Cingular, AT&T, Sprint and Nextel among them to see who has the best service in each market.

Each 2 1/2-minute call handled by the Taurus' phones yields 600 lines of data that detail the signal availability, clarity and speed of connection as well as which cell tower is being used to complete a call.

Verizon doesn't always have the best signal, Raney said, and that's why the road warriors are out there.

"We put $8 billion into our network in the past two years," she said. "We want to know where we stand in every market."

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