New cellular phone service

Bill's got a secret. That's right, bill Paterson, that guy over there in the rumpled blue jacket leaning over the cellular-phones counter. This is the third time he's been in this month. Now he's quizzing the salesman with his three-thousandth question about the fine print in the pricing plans and exactly how long a commitment he has to make for each of several dozen free-phone giveaways. in between, he's even challenging the poor clerk about CDMA versus TDMA -- acronyms whose precise meaning escapes him but whose techno-insider resonance gives him a certain satisfaction.

The secret is that Bill Paterson (not his real name) doesn't own a cellular phone. Never has. "Cell phones are just phony status symbols for wannabes," he's been known to tell business acquaintances when they ask him for his cell number. Yet ever since the price for cellular service dropped into his "comfort zone," the guys been obsessed with the things. He's gone porto loco, cellular mental. Only problem is, he can't decide on a plan, and every time he comes back to the store he gets more confused.

Bill's not alone. With phone companies offering such good deals, plenty of us would love to own a cell phone if we just had time to sort through all the choices and knew more about the technology. To make things easier, Success put together a list of the questions most frequently asked about cellulars and turned to industry experts for the answers.

What should I get, digital service or analog service?

In a word, digital. Digital wireless networks, which are relatively new to the United States, can deliver better sound quality than traditional analog networks, That means less static. For now, they're also more secure. That's because digital networks encrypt the information they broadcast, which not only makes it very, difficult for snoopers to pick up your conversations but also prevents cell-phone "phreakers" (phone hackers) from intercepting your cell number and programming it into a new phone that they then use at your expense. (This nasty little trick is called cloning.)

Another plus for digital is that it gives you the option of sending and receiving all sorts of nonvoice data with your phone, including alphanumeric pages, e-mail, faxes, and such information as news headlines, stock quotes, sports scores, and Internet access.

The only drawback is that since digital networks are in their infancy and still being built, they aren't everywhere. Digital service is available in about 150 big-city markets, but it won't reach many rural areas of the country for another two years, says Dave Whetstone, eastern regional director of marketing and business development at AirTouch Cellular.

Your best bet if you travel to small towns frequently or don't live near a major city is to get a dual-mode phone of the kind that many service providers are offering. It defaults to an analog network when you're no longer covered by your digital network.

Is digital more expensive than analog?

No, and in some cases it's cheaper. The major digital players -- Sprint PCS, AT&T Wireless, AirTouch, and Omnipoint -- are duking it out in major cities, so prices for digital service are coming down quickly. (In 1996 most areas had rates that averaged $35 per month and 35 cents per minute. Today you can find rates as low as $10 per month and 25 cents per minute.) Digital phones, on the other hand, are more expensive than analog phones, which often come bundled free with the service. Although digital phones are often subsidized by the service providers, they still can cost between $100 and $300, depending on the service plan you take.

There are several digital technologies. What's the best?

CDMA (code division multiple access) is the leading wireless technology in the United States, says David Cooperstein of Forrester Research, a technology research firm. CDMA is one of three separate and incompatible technologies -- TDMA and GSM are the other two -- that operate in the radio spectrum that the federal government licenses out to cellular providers.

All that's nice to know, but Cooperstein says you don't need to memorize the acronyms -- unless you want to be like Bill and have conversations with techies. What you should focus on are coverage (that is, how far your network will take you and your phone) and pricing. "You should look for a service provider that offers bulk minutes [a set number of free minutes], as well as cheap and broad coverage in die areas where you travel most," he advises. It's critical to establish your needs first, since sometimes the companies offering the best deals have the worst coverage and quality.

Some service providers try to lock you into a long-term contract.

Is that bad?

In an ideal world, you'd want to avoid being locked in. But often the trade-off between getting a free phone and paying for one is signing a year or two-year contract. That's not always a bad thing if you're comfortable with the deal you're getting on service. Still, try to obtain as much wiggle room as you can. The contract should permit you to switch from one pricing plan to another, for example.

If you decide you want a service that allows you the freedom to cancel at any time without paying a termination fee, heed this warning: The phone you've bought probably won't work with other services. Most companies install a "subsidy lock" on their phones, so you can't reprogram them. Thus, consider the cost of your phone a termination fee.

Service providers are offering a certain number of free minutes as part of

their packages. Which plan should I get?

Everybody's biggest fear about buying a cellular phone is that they'll run up a huge bill because die tolls are high -- even though prices have come down considerably in recent years. Service providers supply a certain number of free local minutes to get you over your toll fears, and each offers a different incentive package. While some have free off-peak and weekend local calls, you're better off with a set number of minutes so that you don't end up in a situation where you feel obliged to use your phone at certain times. Another key freebie is "first incoming minute free," which means that when someone calls your phone you aren't charged until after the first minute. If you can discipline yourself to get off the line quickly, this can mean big savings.

If you're going to be using the phone just for "emergency" purposes, then a basic plan with a low monthly service charge and, say, 30 free minutes of local calls might be perfect. But if you plan on using your phone a lot to make local calls, you'll want to pick a more expensive service package that comes with more free minutes. In the San Francisco Bay area, for instance, Sprint PCS has a plan that costs $49.95 per month and includes 300 free local minutes monthly, as well as 1,000 free long-distance minutes. (The long-distance minutes are a one-time gift, not part of the monthly package.) Its basic plan, which includes 25 free minutes monthly and 1,000 long-distance minutes, costs $34.95 per month. If you want to use the phone when you travel to other metropolitan areas covered by Sprint PCS, add $4.95 a month to either plan.

What are roaming charges?

Depending on your provider, you may have to pay a special roaming fee when you use your phone outside your local area. Most digital cellular providers' roaming rates, however, are the same as their regular long-distance rates (score another point for digital). For example, if you have Omnipoint's service in New York and you travel to San Francisco, your phone "roams" into Pacific Bell service. Whether you call Berkeley or Brooklyn, the rate is die same; you're charged the normal rate for a long-distance call. And that's exactly the type of service you want if you travel outside your local caring area a lot.

Another way to control costs is to buy a pre-paid calling plan. With a pre-paid plan, you buy a certain number of minutes for the month, creating a fixed budget for yourself.

What about the phone itself? Which one should I get?

Cellular providers commonly bundle phones with their services. Sometimes the phones are free, and sometimes they're discounted. Ericsson, Motorola, and Qualcomm manufacture some very small phones, but if you covet the newest, smallest model, chances are you're going to have to pay a premium for it unless you take a high-end service package. (The general rule is, the more expensive the service, the better deal you get on a phone.) Also, phones with additional built-in features, such as caller ID, can be pricier.

A couple of tips: Make sure the phone you get has good battery life. Ideally, you want a phone that stays charged for at least two hours. Also, before you buy a features-rich phone, ask yourself whether you're going to use all the features. And don't lie.

Can I use my cellular phone overseas?