Alltel's Top 10 List

In a move aimed at boosting its base, the underdog outfit is offering "free" calls to an extend list of subscribers' regular contacts, inside or outside its own network

Wish you could use your mobile phone to dial your oft-called numbers for free? Well, Alltel is expected to announce Apr. 21 that it will launch a service allowing subscribers to call any 10 numbers as often as they want.

While most of the nation's major cellular operators have long had some sort of friends-and-family calling incentive, those calls have been limited to people using the same wireless service -- Cingular to Cingular calls, or Verizon to Verizon.


  Alltel's breakthrough is that subscribers won't be limited to calling other Alltel users. Home phones, office phones, and mobile numbers from rival wireless carriers aren't off limits. "We're trying to stake out a position here that says the customer is in control," says Alltel's chief marketing officer Frank O'Mara.

What makes Alltel execs think customers really will go for a circle of 10 free numbers? The company did research that showed wireless users didn't understand why carriers limit them to making calls only within their networks. Already, Alltel has good customer retention, boasting one of the industry's lowest churn rates. By allowing users to break beyond the Alltel network, the company gives its customers another reason to stay with Alltel rather than jump to rival carriers.

Alltel, the nation's fifth-largest carrier, with 15 million subscribers, hopes the new service will help it gain market share. "The Holy Grail," O'Mara says, is to break into the group of the top four, or even three, carriers. Nice goal, but hardly realistic.


  Here's the catch: To qualify, Alltel requires subscribers to be on its $60-per-month service plan. But the average Alltel user spends just $51.44 a month. It's not clear if users will want to fork over an extra ten bucks.

Worse, the average mobile user in the U.S. spends only about $40 a month on voice service, says analyst Albert Lin of American Technology Research. So, Lin says, Alltel's hope, that people will want to drop other carriers and migrate to it, isn't likely to be rewarded.

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