Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, October 16, 1994 TAG: 9410180007
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: CRYSTAL CHAPPELL STAFF WRITER
DATELINE: LENGTH: Long
That's because her car broke down, leaving her stranded for three hours on a remote part of Interstate 64 east of Charlottesville.
Waving a piece of paper out the window, Kennett watched hundreds of cars pass by, even though her car's hood was up and its emergency lights were flashing. Out of desperation, she got in a stranger's car and asked him to drive her to a service station. Driving back to Kennett's car, a tow truck driver said a woman in a similar situation three months earlier had disappeared. Her body had later been found.
"It's a horrible, horrible experience. You're at the mercy of whoever stops on the highway," Kennett said. "It's a very helpless feeling."
So, Kennett, manager and underwriter for Escrow Title Agency Inc. in Roanoke, has decided to arm herself - with a car phone.
"A car phone is a lot safer, smarter way to get help fast," said Kennett, a single mother who travels regularly to soccer games with her daughter.
Like many people who travel alone, Kennett wants a car phone so she can call 911 or a wrecker instead of being stranded if she has a highway emergency.
In the 10 years since cellular phones were introduced as gadgets for fast-track yuppies, the $12.6 billion industry is finding that safety-conscious people like Kennett are the largest portion of its new business.
People buying cellular phones for safety and other nonbusiness reasons accounted for two-thirds of the industry's new customers in 1993, said Mike Houghton, spokesman for the Cellular Telecommunications Industry Association in Washington, D.C.
The industry had more than 19 million customers as of June 30 and is growing at a rate of 17,000 new customers per day, Houghton said.
Cellular phones are the fastest-growing consumer electronics product, Houghton said. The devices reached a customer base of 10 million in just nine years after they were introduced.
At Cellular One of Roanoke, the number of people who purchase phones for safety increases by 10 or 15 percent every year, regional manager Jake Casey said. Currently there are about 30,000 cellular phone customers in the Roanoke area, said Jay Mangan, Contel Cellular's regional advertising manager.
Nine out of 10 people said they feel safer with a cellular phone in their cars, according to a Motorola Inc. survey of 600 adults in the United States, Houghton said. And 28 percent of survey participants have a second phone only for family use, which implies concerns for safety as a reason, Mangan said.
In 1989, fewer than 20 percent of customers were female; as of last year, that portion has grown to 34 percent, said John Garcia, who is Contel Cellular's Virginia vice president.
Growth in the market for cellular phones also is attributed to sharp price declines and incentive programs resulting from competition among carriers.
Phones costing $1,200 in 1984 with average monthly service bills of $96.83 in 1987 gave cellular phones a yuppie image because only business and affluent users could afford them, said Donna Coward, associate analyst for Wheat First Butcher Singer, a Richmond-based securities brokerage.
But since then, average monthly service bills have decreased to about $60, and cellular companies are giving away the phones as incentives to sign up subscribers, Coward said. Others are selling phones for $3 to $1000, depending on the phone and the promotion. And there is almost always a promotion, said John Rodman, Contel Cellular's manager in Roanoke.
Kennett, for example, said Contel Cellular will give her a phone valued at $180 after she signs up for a one-year rate plan costing a minimum of $23 a month. Kennett said it was "money well spent at this point."
Along with phone giveaways, companies have been offering safety and security plans or similar plans of limited calls per month for about 20 minutes that cost from $25 to $30 a month.
Marketing strategies targeting safety issues have been prominent this year in the wake of earthquakes in California and the flood in Louisiana and Florida - and "it's working," Coward said. Advertisements showing a car hood up in the winter and someone talking on the phone send a clear safety message. "They don't even have to come out and say it," Coward said.
While the number of cellular subscribers has grown by 34 to 35 percent year over year since 1990, the number of minutes of use has been decreasing, reflecting an increase in casual users who want phones for safety, Coward said. The average service bill has also dropped from $67.31 in June of 1993 to $58.65 this June, Coward said. The 13 percent decrease in average service bills was "dramatic" compared with the expected 5 to 6 percent decrease per year, Coward said.
The positive image of the safety of using cellular phones has helped the industry combat negative publicity that the use of cellular phones may cause brain cancer, which has a slim chance of happening, Coward said. A St. Petersburg man filed a suit in 1993 that his wife had contracted brain cancer from a portable phone. Industry research has not shown a relationship between cellular phones and cancer.
"Cellular phones have been an effective weapon to fight crime and also to promote safety," Houghton said.
Last year more than 6.5 million calls were made on cellular phones to 911 and other emergency numbers. By dialing "star DUI," Virginia users can report a suspected drunken driver to the state police, Rodman said. People are more willing to help disabled cars on the highway by reporting a car's location on their cellular phones, Houghton said. Cellular carriers have also donated phones to groups such as Mothers Against Drunk Driving and citizen watch groups.
Business customers are also using cellular phones for emergency backup services. After a tornado hit Wal-Mart in Petersburg, cellular phones were Wal-Mart's primary means of communication, Garcia said. Business uses for cellular phones have held steady, depending on business growth, Coward said.
While people initially buy cellular phones for safety, they find many other uses for the service and increase their personal productivity, Garcia said.
Cellular phones currently are used by 6 percent of the population, and the industry expects that portion will grow to 80 percent, rivaling videocassette recorders and color televisions, Coward said.
"It really makes sense to have a car phone, especially if you're a female, if you're anybody," Kennett said.
by CNB