Alltel Gets Aggressive in Telecom War

New Service Offers Free Calling; Ad Campaign Takes Jabs at Competitors

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Alltel is giving it away-and mocking its telecom rivals in the process.

The No. 5 cellphone service provider has upped the ante in the $4 billion telecom marketing war by offering subscribers free mobile calls to customers of other wireless and landline companies. And it's using the ad icons of other carriers to make the point in a new campaign.

Under Alltel's My Circle program, subscribers select up to 10 numbers to call free. The list can be changed online any time, so subscribers can add and delete a friend once the call is made. My Circle will apply only to phone plans costing $59 a month or more.

The program will be backed by most of Alltel's annual marketing budget, said Laura Cook, senior VP-marketing communications. According to TNS Media Intelligence, Alltel spent $124.5 million in measured media in 2005, up from $117.9 million in 2004.

At a time when the wireless marketplace has grown to over 207.9 million subscribers, according to the Cellular Telecommunications and Internet Association, wireless phone companies will now need to focus their marketing game on taking customers from other carriers.

"People don't want the carrier to decide who they can call for free," Ms. Cook said.

"It's very big," said Roger Entner, VP-wireless telecom at consulting firm Ovum. Other carriers are likely to take a wait-and-see attitude before trying to match the offer, he said.

Although Alltel is a regional carrier strong in suburban and rural areas, and is not located in large cities such as New York or Los Angeles, it is No. 1 or No. 2 in the markets it serves, Mr. Entner said. However, he said Alltel's growth "hasn't been spectacular."

In the effort to go after other subscribers, My Circle's aggressive ad campaign will use look-alikes as stand-ins for the spokespeople and symbols of the other major carriers. In two spots from agency Cambpell-Ewald, Detroit, breaking the week of April 23, an Alltel salesman calls together look-alikes of Verizon Wireless's "Can you hear me now" guy, T-Mobile spokeswoman Catherine Zeta-Jones, the Cingular animated "Jack" and Sprint's old "trench coat" man.

In one spot, the Alltel salesman says they are all now friends and can call each other for free. The pseudo Verizon Wireless test man says "That's really not what we do," and the Alltel salesman retorts, "It is now." The test man then asks if he can call Ms. Zeta-Jones for free. She responds with a disdainful eyeball roll.

Douglas Wood, partner, Reed Smith, said the ads could raise some legal questions, particularly in the case of Ms. Zeta-Jones. In states such as California, her right to privacy and publicity will depend on how much of a look-alike is used in the spots. In relation to the Verizon Wireless test man and the Sprint trench coat man, the legal issues are murky. "The character itself is fair game," he said, but what the courts have not ruled on is whether actors playing those roles have a celebrity of their own and thus would fall into the same category as Ms. Zeta-Jones.
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