GTE expands offerings to spur sluggish sales
- By L. Scott Tillett, L. Scott Tillett
- Jan 18, 1998
In response to sluggish sales on its Federal Wireless Telecommunications Services contract GTE Government Systems this month modified the pact to give customers more options.
The new contract modifications which went into effect this past November will allow GTE to sell off the contract in much the same way that commercial wireless vendors sell cellular and digital phone and paging services to the public. Previously offered separately GTE is now allowed to bundle hardware such as cellular phones digital phones and pagers with services. The modifications also allow GTE to offer federal customers special prices on the new service and hardware packages.
"We can offer [federal customers] special deals because it's rainy today. And [if] it's sunny tomorrow...the deal's off " said Dean Shepard GTE's wireless services business manager. GTE also has the ability to cut individual deals with federal wirele ss users giving GTE access to new customers. "What we're really trying to do and what we're really hoping will happen is that we'll get some small accounts that will grow into large accounts " Shepard said.
The General Services Administration awarded GTE the contract in November 1996 the pact had an estimated value of $300 million over eight years. But according to Shepard GTE's inability to bundle equipment and services has limited the success of the contract. The contract's nonmandatory status and an ongoing stigma of wireless communication as a luxury rather than a productivity tool have also affected business he said.
Federal customers are using the contract for traditional voice communication paging e-mail paging and wireless data transmission via cellular networks. Shepard said about 6 000 people nationwide subscribe to the service as opposed to the 20 000 he had anticipated signing up by this time.
Before contract modifications federal customers in the Baltimore-Washington D.C. area who used the contract would have had to pay $21.75 a month for 75 minutes of cellular service plus $150 to $250 for a cellular phone and even more for a digital phone. Also they would have had to buy the service and the phone separately and pay $150 in account setup fees. And an office would have had to pay that flat $150 fee regardless of how many wireless users they had— a daunting factor for small federal customers Shepard said. GTE has suspended the account setup fee for now he said.
Larry Hazzard GSA's program manager for the federal wireless program said the modifications were the result of GSA and GTE realizing the need for flexibility in the contract.