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Fear Not the Cell-Phone Directory

It's a problem that John Erzen, who owns a home-inspection business in Lake Oswego, Ore., has wrestled with many times: He gets to a house and the lights are out, the door is locked, and the realtor who was supposed to open it is nowhere to be found.

In an ideal world, Erzen would be able to look up the realtor's cell-phone number in some sort of directory. But that's not possible right now. It's an increasing problem in an increasingly wireless society. About 8% of Americans have dumped their traditional phones and gone completely mobile. That's expected to jump to 25% within a decade, says Craig Mathias, founder of Farpoint Group, a consulting firm in Ashland, Mass., that specializes in wireless technology.

NO CELL-PHONE BOOK. Until recently, demand for a wireless directory appeared to be strong. A survey of 1,503 wireless subscribers conducted by consulting firm Pierz Group last summer found that more than half would want their mobiles to be listed in a directory, as long as the listing is free. "Over time, you might actually get more people, once people see that it works," says Kathleen Pierz, managing partner at the Clarkston (Mich.) consulting firm.

But the wireless directory idea has smacked right into privacy fears and urban legends -- particularly a deluge of recent e-mails warning consumers of the worst. Some people think being listed in the directory will open a cell phone to telemarketers' calls. Others think all cell-phone numbers will be listed in a Yellow Pages-like directory anyone can use.

Neither is true. There are no plans for a directory to be printed or made public or, heaven forbid, sold to telemarketers.

"UNDER LOCK AND KEY." Here's what's really going on: Early next year, all U.S. wireless-service providers, except for Verizon Wireless, will allow their customers to opt in into a directory-assistance service. To do so, you'll need to make a call to your service provider or perhaps sign something saying you'd like to be listed. The listing will be free.

After that, your number will make its way into a special database, updated daily and maintained by a Portland (Ore.) company called Qsent. The private company, which includes among its board members former MasterCard CEO Gene Lockhart, already manages databases of highly sensitive information for financial institutions and e-commerce sites. Your data will be "kept under lock and key," says Greg Keene, Qsent's chief privacy officer.

Qsent will use that master database to create a so-called privacy-protected database, which will be sent to companies like INFOnxx, to whom many carriers outsource their 411 call service. This database lists customers' names but leaves corresponding addresses and phone numbers partially erased.

TOP-SECRET DATABASE. When you call 411 and ask for Jane Doe's mobile, for example, the service operator will use the privacy-protected database to check that Jane Doe has, indeed, opted into the wireless directory. If that's the case, the operator will send a request to Qsent for Jane's complete information. After the operator gives you Jane's number, he or she will be required to purge the data immediately.

The procedure should ensure that "this list will never be used by telemarketers," says Pierz. "Telemarketers use lists, they never call directory assistance." A 411 call costs between 25 cents and $2.49 each. That's too much for a telemarketer to pay for just one listing.

Nonetheless, misuse of the directory and errors are always a possibility. That's why execs at service provider Verizon Wireless swear they'll never participate in the directory.

Still, it's in its rivals' best interests to keep mishaps to a minimum. While wireless directory assistance could eventually turn into a $1.9 billion-per-year revenue generator, it's dwarfed by the carriers' primrary voice-call business -- which for Verizon alone was worth $7.3 billion in the third quarter.

MORE SOPHISTICATED. What's more, analysts are betting that service providers will make their 411 services more sophisticated as time goes on. Software from a startup called Wireless Directory Network can send a customer a short text message whenever someone calls 411 and asks for the customer's mobile number. The message will contain the inquirer's name and phone number. For now, WDN has no customers, but execs are hopeful, says Robert Schmimidt, chairman and CEO.

Other companies are testing out unconventional ideas, such as allowing customers to use aliases. Imagine this: You tell your friends that they can find you listed in the directory under a nickname, say "Superman." When your friends dial 411, that word will act as a password to your data, which can include your mobile number, your e-mail address, or even your pager number.

Ultimately, fancy systems like that may not be necessary. In Sweden, Norway, and Denmark, where more than 90% of the population's wireless numbers are listed in a directory, an average person receives two to three 411-referred calls on their cell phones per year, according to Pierz's studies. Of course, consumers in those countries and in the U.S. are protected by laws that prevent telemarketers from calling cell phones.

WORTH A LITTLE PAIN. In the U.S. cell-phone customers can opt for protection by the national do-not-call registry that blocks telemarketers. States such as Massachusetts also maintain similar lists.

That said, telemarketing fears are likely overrated. For most consumers and small businesses, the convenience of being listed in a directory will be worth an occasional uninvited call.

And you can always hang up. Kharif is a reporter for BusinessWeek Online in Portland, Ore.

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