The last time that I used a hotel-room phone, about a dozen years ago, I got dinged for $11 for a two-minute call from Phoenix to New York. This was during the phone wars, a nasty era for business travelers that lasted for years after the government broke up the old AT&T monopoly in 1984.
During that time, hoteliers would mark up domestic calls by 500 to 600 percent, and three-digit prices for short calls from overseas hotels were standard. Business travelers essentially opened their economic veins whenever they plugged their phone modems into a hotel system and downloaded their email at the then-blazing speeds of 14.4 or 28.8 kilobytes.
Pay phones were even more ridiculous. Throughout the late 1980s and early 1990s, telecommunications companies would put goofy proprietary pay phones in airport concourses. One I remember particularly well had a pullout keyboard, acoustic couplers for the handset, and a miniscule monitor. For two or three bucks a minute, you could laboriously dial into AOL or Compuserve—and be disconnected before you retrieved a single message.
Back then, I carried a separate little travel wallet stuffed with calling cards, all claiming to shield me from the telephonic havoc. During those years, I had three flavors of AT&T cards; a call-back card that routed all my calls through some Caribbean country; and even a phone card from American Express—which saved me a lot of money, assuming that I was willing to dial 32 digits to phone home.
Fortunately, mobile phones made the phone wars irrelevant. In the years since their widespread adoption, some telecom experts say that hotels have lost as much as 80 percent of their calling volume and revenue from in-room phones. Pay phones have all but disappeared from airports and city sidewalks. And do you know any business traveler who still uses a calling card?
It’s easy to pinpoint the moment when mobile phones changed the game for business travelers: In 1998, one of the many mobile companies that have been called AT&T introduced the Digital One Rate plan. Customers paid just 11 cents per minute for a mobile call from anywhere in the nation—no roaming charges, no surcharges, and no other tricky fees. With mobile service truly national and predictably priced, business travelers converted in droves.
It’s taken a decade, but the mobile-phone industry has finally developed a worthy successor to Digital One Rate. Late last month, Verizon Wireless ushered in the era of “all-you-can-eat” pricing. For a $99.99 monthly fee, customers can make unlimited domestic mobile calls. The basic plan includes voice calls. Another $20 a month gets you unlimited monthly text messaging too.
Verizon’s major competitors reacted in a flash: Within hours, AT&T essentially matched the Verizon deal (but pointedly excluded the Apple iPhone from the offer). T-Mobile, generally the cheapest of the major firms, went even further—its $99.99 monthly plan includes unlimited calling and unlimited text messaging. T-Mobile’s catch? You must extend your existing contract to qualify. Verizon and AT&T allow existing customers to switch to all-you-can-eat pricing without adding time to their current contracts. Sprint Nextel finally joined the fray last week, unveiling its own $99.99 endless-talk plan.
Market analysts are skeptical about the flat-rate pricing, of course. They worry that the plans will erode the profit that mobile companies wring out of heavy users like business travelers. They also insist that flat-rate prices will further commoditize the mobile-telecom industry.
There’s no such carping from business travelers. In fact, a predictable monthly price for mobile calls and messaging is the next-to-last front. “A hundred bucks a month for my mobile?” one frequent business traveler emailed me last week. “I’ve spent more than that on one phone call from my hotel room back in the bad old days.”
Now that we’ve got a path to taming our domestic calling costs on the road, all that’s left to conquer is international mobile calling prices. An overseas cell-phone call can cost as much as five dollars a minute, and the calling protocols and roaming regimens remain daunting.
“I wouldn’t hold your breath on the international front,” one mobile-phone executive told me the other day. “We have a hard time figuring out what we pay to provide international service, so I don’t think we’ll be in a rush to cut fees there too quickly.”
The fine print
US Airways says it will charge most travelers $25 to check a second bag beginning in May. United Airlines announced a similar policy a few weeks ago. And Starwood Preferred Guest, the frequency program of Westin, Sheraton, W, and others, is raising the price of a free-room award at more than 200 properties worldwide. If you flew British Airways or Virgin Atlantic between 2004 and 2006, you may be eligible for a refund of your fuel surcharge, up to $40 per round-trip flight. More details are available at a special Web site here.