Free cellphone service for poor lowers rates

cellphoneAssurance Wirelessannounced today that it is cutting its per-minute calling option in half in a program aimed at giving poor people cellphones.

Call it a coincidence, but the move comes less than a week after WalletPop pointed out that after the 200 free monthly minutes are used, customers can buy more airtime at 20 cents a minute -- double what the company's sister program, Boost Mobile, was offering at 10 cents a minute.

Its text messages, however, remain extraordinarily high at 15 cents, making messaging more costly than a domestic phone call. Most prepaid plans charge less for texting. Whatever. At least the calling rate drops.

To WalletPop, it looked like a way to stick it to the poor while trying to get their longterm business.

The free cellphone offer for people in New York, North Carolina, Tennessee and Virginia included 200 free minutes per month of calls if they qualified for the program by having incomes 135% below the federal poverty rate or who participate in assistance programs, such as food stamps and federal housing assistance.

An Assurance Wireless spokeswoman told me today that it had been planning on making the change to 10 cents a minute. A text message will cost more than a domestic call, which blows me away, but more on that in a minute.

The company points out that less than 25% of its customers have used more than the 200 free minutes per month. This change won't help them with the fees they've already paid, but it will help others as Assurance Wireless rolls out the plan across the country this year.

Sending a text, e-mail or instant message remains at 15 cents each, or customers can buy bundles of 1,000 such messages for $5 or unlimited messaging for $10 per month. Again, the pricing is odd. Buying a bundle of 1,000 texts is a great deal at less than a penny per text, so why anyone would spend 15 cents per message is unfathomable.

Last week when I spoke with Gary Carter, manager of national partnerships for Assurance Wireless, he told me that it was evaluating the higher price to be in line with what other companies charge for prepaid phone plans.

In a press release today, Carter said: "It's hard to beat the free 200 minutes, but we want to maximize the value of this service even more for those in need of additional airtime during these challenging times."

Challenging indeed. Unemployment is high and many companies are trying to gain business by giving free or discounted service to the unemployed, with the hope that they'll be regular customers when they get back on their feet.

Getting a free cellphone and 200 free minutes a month is fantastic, and treating low-income customers the same as everyone else is the best way to ensure continuing business.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area.
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