14 Mobil Product News; May 1993
In the last five years, the cellular phone rental
business rapidly expanded with companies such as Action Cellular. Low
start-up costs and high-profit margins have attracted about 50
medium-sized companies and roughly 350 entrepreneurs to the rental
business, which earns approximately $500 million per year according to
the US Commerce Department's Industrial Outlook 1993. The combination of
consumers' desire to use cellular but reluctance to commit to a
carrier's service agreement has created a prime opportunity for the
growth of cellular phone rental business.
"Fueling cellular rental business' growth are factors
inherent in the cellular industry such as: service contract
requirements, for example the purchase of a full year airtime; rapidly
changing technology, the digital versus analog debate; and cumbersome
roaming procedures." source the US Commerce Department's Industrial
Outlook 1993.
Action Cellular started out renting only cellular
phones but has added pagers and the mobile data credit card verification
unit, the Mobile Merchant, to its service offerings. Action initially
thought pagers would detract from phone rentals, but now with the
phone-rental aspect of the business solidly entrenched, the company has
decided to diversify its products.
As a rental company, Action owns the cellular phones
and phone numbers and pays wholesale rates for the airtime.
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