Cingular customers with old phones face fee

NEW YORK — About 4.7 million Cingular Wireless subscribers with older phones will have to pay $5 extra each month as the company tries to prod them to get new handsets so it can devote its entire network to one type of signal.

The surcharge, unique among the major U.S. carriers, will be added to bills starting in September, the company said Monday.

Cingular, jointly owned by prospective merger partners AT&T and BellSouth, reported earlier this month that roughly 92 percent of its 57.3 million customers use phones based on the globally dominant technology known as GSM, or Global System for Mobile.

The rest have handsets based on one of two older technologies.

One dates back two decades to the first generation of mobile phones, which used an "analog," or nondigital, signal to transmit calls. The second is a digital-transmission technique known as TDMA, which stands for Time Division Multiple Access.

The new fee, which will generate $23.5 million a month for Cingular, adds to a confusing array of surcharges and government taxes that, regardless of the company, can boost the average cellular bill up to 50 percent from the advertised rate.

Like other U.S. cellular carriers, Cingular is required by the Federal Communications Commission to keep providing analog service until early 2008 so long as it still has customers with those phones.

Although the company is not required to continue providing TDMA service, it has no plans to turn off that service until the analog phaseout because both use the same portion of Cingular's network.

Nonetheless, having three different kinds of wireless signals leaves less room for Cingular to connect calls and provide data services to its much larger GSM audience.

Network capacity is crucial as Cingular tries to shake a reputation for poor service.

Its image was tarnished after its acquisition in late 2004 of Redmond-based AT&T Wireless Services, a merger that required the complex integration of two disparate networks.

In early July, a federal lawsuit was filed claiming Cingular promised to provide uninterrupted service to AT&T Wireless subscribers but instead degraded their phone reception in an effort to persuade them to sign new contracts.

Cingular strongly disputed the claims in the suit, which seeks class-action status on behalf of the more than 20 million customers AT&T Wireless had at the time of the merger.

Many paid $18 "transfer" fees to switch to Cingular plans and were required to buy new phones or pay other fees, according to the complaint filed in U.S. District Court in Seattle.

On Monday, Cingular said issued a statement saying that with the number of analog and TDMA users dwindling, "the per-customer cost of using that network is increasing considerably. That's why we made a decision to impose this charge."

Verizon Wireless serves most of its subscribers with a digital technology known as "CDMA" but has an undisclosed number of analog customers, who face no extra fee.