Editor's note: This story first ran on May 25, 1986.

Cellular telephones - those new status symbols with the funny antennas - are catching on like wildfire in Houston.

According to industry estimates, Houston is one of the fastest-growing markets for cellular telephones, and it is estimated that there are close to 20,000 users already plugged in to the devices in the Houston market. Growth is averaging more than 1,000 per month.

In setting up guidelines for the development of the cellular industry, the Federal Communications Commission authorized two "carriers" for each geographical market. Until recently, GTE Mobilnet Inc., a subsidiary of GTE of Stamford, Conn., was the only company operating in Houston using its own cellular system. But all that is changing.

Houston Cellular Telephone Co. (which until now purchased time from GTE for resale to the public) has started up its own system.

Richard Wirth, chief executive officer of Houston Cellular, said his company's system of 28 cells have been switched on - the largest system ever to be turned on at one time in the United States.

Consequently, competition between GTE Mobilnet and Houston Cellular is heating up - at least from a marketing standpoint.

"It's a real foot race now," explained Wirth, a former vice president of Warner Amex's QUBE cable system here.

Another factor helping to stimulate cellular telephone usage in Houston is price. Suppliers say that cellular telephone costs have dropped dramatically within the past two years, and some models are available for as little as $500, not including installation, antenna or other extras.

Both Houston Cellular and GTE Mobilnet are partnerships of several companies. Houston Cellular, formed in 1984, is made up of Mobile Communication Corp. of America, headquartered in Jackson, Miss.; LIN Broadcasting Co. of New York and Cellular Systems of Houston. GTE Mobilnet comprises Southwestern Bell, Centel Cellular Corp., Lufkin-Conroe Telecommunications Inc., Fort Bend Telephone Co. and SLT Communications Inc.

Richard Sharman, vice president of marketing for GTE Mobilnet, said one of their main marketing advantages is the fact that they were the first to begin operation here. The company is projecting it will have 17,000 customers by the end of this year, Sharman said.

By comparison, Houston Cellular currently claims to have 5,500 customers.

Sharman admitted that GTE Mobilnet had difficulty with its system in the beginning, such as "dropped" calls. However, he said those problems have since been eliminated as capacity has been increased.

"We've gone through our growing pains," Sharman said. "We had more subscribers sign up in the beginning than we expected, and we had to rush to catch up with capacity to meet the demand."

Sharman expects Houston to have a total of 45,000 cellular telephone owners by 1990.

A lot will happen in the next few years to make cellular desirable," Sharman explained. "For one thing, price is coming down.

Also, we expect portable cellular telephones (that can be taken out of vehicles) will begin to grow, representing the lion's share of the market in the future."

The average "drive away" cost for a person wanting to own a cellular telephone ranges from $1,200 to $1,500. On top of this, however, is a monthly "access fee" and charges for actual usage time.

In Houston, there currently is pricing parity between Houston Cellular and GTE Mobilnet. Both companies charge $35 as a basically monthly charge.

Once a cellular telephone is installed, customers can expect to pay an average monthly bill of about $125 to $150, not including long distance charges. Standard usage charge is 39 cents per minute (peak), 20 cents (off peak) and 5 cents (night).

Currently, completely portable, battery-operated cellular telephones range in price from $2,000 to over $4,000.

Another option available to Houston customers is to rent or lease the cellular equipment. Recently, costs have been advertised as low as $37.95 per month.

Management of both Houston Cellular and GTE Mobilnet explained that the business is very capital intensive and not for the fly-by-night operator. For instance, Houston Cellular already has invested $20 million on its system here. GTE Mobilnet estimated its expenditure will reach $42 million by year-end.

According to Wirth, cellular customers want the widest geographical coverage possible. Houston Cellular's system of 28 cells covers 6,752 square miles extending south of Lake Jackson, east to the Jefferson County line, north to the Walker County and west to the San Bernard River. GTE Mobilnet's system of 30 cells currently covers a similar area, but additional cells to be constructed later this year will enlarge their coverage area to 8,000 square miles (including Galveston and Beaumont) by the end of this year.

Analysts who follow the cellular telephone industry say there are about 350,000 users nationally. Herschel Shosteck, a telecommunications analyst in Silver Spring, Md., said about 250,000 units are expected to be sold this year.

"Houston will be one of the large gainers," Shosteck said.

"The city is currently in a depression, but it still is a wealthy city."

Shosteck said the cellular telephone market is hot in Houston because of traffic congestion and the absence of public transportation.

"For this reason, Los Angeles and Houston are in stark contrast to New York, for instance," Shosteck said. "The size of the Houston business base also contributes to a very favorable market."

Shosteck agreed that cellular telephony is not a "get rich quick" business.

"We think it will be very profitable by the mid-1990s. It takes a long time to build-up a customer base, install hardware and software and stabilize maintenance costs. We're already seeing a consolidation in the business, and I anticipate it to continue.

"This is a very capital intensive business and not for the quick buick artist. People have to be committed to long-term service. If you have deep pockets, then it can be profitable, but it's only for people who have a real commitment to the telephone industry."

Shosteck predicted still lower costs by 1989-90 as new, more efficient digital technologies are introduced by the cellular companies into their systems.

"What I foresee is a steady growth that will be very profitable for those businessmen who are astute about it and in for the long haul," Shosteck concluded.