Free cell phones offered to needy

McClatchy Newspapers

RALEIGH, N.C. — An obscure federal program that helps poor people pay for phone service is entering the wireless era. Cell phone companies are offering the needy a bargain that the rest of us can only dream about: free service.

TracFone, a national wireless phone service company, this month began offering its no-cost service to the low-income families that are estimated to qualify. Its competitor in the prepaid market, Virgin Mobile, plans to offer a similar service this summer.

Both services are subsidized by the federal government’s Lifeline program, created 25 years ago to ensure that poor people had phone service. People who qualify usually pay about half of the monthly cost for phone service. Despite the discount, only a third of households eligible for the program use it.

Details of Virgin’s plan aren’t yet available, but TracFone’s program, called SafeLink, provides unlimited free 911 emergency calls, as well as 68 minutes of free calling time every month, with a free Motorola cell phone that normally costs $9.99. SafeLink also comes with voice mail, caller ID, call waiting, voice mail, long distance and text messaging.

“If they can offer a phone service for free and make a profit doing it, I’m all for it,” said John Garrison, director of the communications division of the North Carolina Public Staff, the state agency that represents consumers in utility matters. “Any way we can get more people onto Lifeline service who qualify for it, I think it’s good.”

Jose Fuentes, TracFone’s director of government relations, won’t say how many people in the state have signed up or how it can make a profit off the $10 per household federal subsidy it receives to provide the Lifeline service. But Fuentes says the company sees a potential market of 26 million households nationwide.

Wireless companies such as TracFone and Virgin Mobile operate by buying access on other carriers’ networks and typically get volume discounts as their customers gab and text their way through more minutes.

TracFone’s customers aren’t limited to their free 68 minutes a month. Customers can buy additional calling time — for 5 cents a minute — if they want to exceed their monthly allotment.

April Crudup has been a TracFone SafeLink customer for the past month, and already, with half the month left, she says she is down to four minutes on her account. She has a regular AT&T phone at home but lost her previous wireless account several months ago when she wasn’t able to pay the bill. She’s on food stamps and has six kids, ages 1 to 10.

She said she needs a cell phone “for when I’m out and something happens.”