(Ocala Star-Banner (FL) (KRT) Via Thomson Dialog NewsEdge) Sep. 24--OCALA, Fla. -- When it was time to buy a cell phone, Shenna Harris applied the same strategy she does with most of her purchases. She wanted to be frugal.

So instead of heading to a retail store, 23-year-old Harris of Alachua County flipped the switch of her computer and went online to get the best deal she could.

Harris bought a refurbished, used cell phone with Internet and e-mail capabilities through eBay.

She recognized the brand name of the cell phone and learned the model had been on the market for about two years. It was a used phone which reduced the cost about 50 percent.

"I thought it was a good deal at $80, especially when I saw them in the store new for $150," Harris said. "The phone I bought looked like new.

It still works great and we still have it," she said.

The phone arrived at her doorstep with a manual, battery recharger and in the manufacturer's box.

"I would definitely go online and buy my next phone the same way."

Harris' detour away from area retail stores for a new cell phone and instead venturing online for a refurbished cell phone is becoming a road more and more traveled. And one of the suppliers of refurbished cell phones is Ocala-based RMS Communications Inc. on Northwest 44th Avenue.

The company sells between 700,000 and 1 million refurbished cell phones annually, said RMS chief executive officer James Mosieur. Most are sold in the United States.

In Mosieur's 26,000 square-feet business about 70 employees strip used phones of their plastic skins and replace them with new, shiny covers.

The phones are repaired if they are broken and implanted with new software, souping up their communication abilities.

RMS now enjoys about 10 percent of the market share for the sale of used phones.

Mosieur said two factors fuel his business' success: the growing popularity of cell phones and the increasing price of new phones on the shelf.

In June 2000, there were an estimated 97 million cell phone subscribers in the United States. By June 2006, that jumped to nearly 220 million subscribers with cell phones pressed to their ears, according to Joe Faron, a CTIA/The Wireless Association spokesman. CTIA is a Washington-based trade show organization.

The number of wireless minutes spent on cell phones between June 1999 and June 2000 was less than 100 billion, according to CTIA. That number grew to about 850 billion minutes between June 2005 and June 2006.

How many of the cell phones in use today in the United States that were bought refurbished is uncertain, but new phones are not kept long.

On average, CTIA figures show, people hold onto cell phones no more than two years before they either collect dust in a drawer or thrown away to make way for new cell phones. But new cell phones do not come cheap, ranging from about $150 to more than $400 for phones with extensive internet and E-mail features.

That is where RMS comes in.

Mosieur said his company buys broken or used phones from cellular service carriers or donation programs. He said his company often pays only a few dollars for most of his cell phones. They are upgraded or repaired and sent back into the market place, earning the Ocala company about $15 million annually.

Mosieur said his company and others like it sell refurbished phones for as little as $50 to as much as $250. Used camera phones now sell for about $100.

"But it's still a cottage industry," Mosieur said.

But the Ocala company and others like it are likely to grow.

About 120 million cell phones are discarded annually, according to Inform Inc., a New York research firm. About 90 percent of those end up in landfills. About 5-10 percent are recycled and sold, often on Internet sites.

In many cases, people get cell phones as part of a package sale when they sign up for wireless service. But if their cell phones break, many of those customers are without service.

Fifteen-year-old Alex Sherrod was one such customers.

"I broke the one I had when I jumped in the pool," said Sherrod, of Gainesville. "(And) my mom said she wouldn't buy me a new one."

Comparing cell phone prices, the high school student said he could not afford a replacement phone, unless it was a refurbished or used phone.

"So I went on my eBay account and said what the heck and bought one, for $35 plus $10 shipping and handling," he said.

Two months later, it stopped working.

Soon afterward, he took $339 of his savings and bought a new phone.

Most companies selling refurbished cell phones have warranties. The warranty for Sherrod used phone lasted only 30 days.

Meanwhile, Mosieur said the number of cell phones he can overhaul and resell is limited only by the number of unwanted phones he can get his hands on.

In 1985, Mosieur had graduated from a technical institute with the equivalent of a two-year degree. He was repairing computer modems in Connecticut when he was laid off. His brother in Ocala was working out of a rented office in the back room of a local music store repairing two-way radios used by truck drivers and service workers. Mosieur's brother offered him a job. Mosieur accepted.

The two stopped repairing radios and moved on to pagers soon later.

After a few years, Mosieur realized the money was in cell phones and currently does relatively few pager repairs.

Now Mosieur spends much of his time thinking about where he he can get more used phones.

"Because if we could get more phones, we could make more sales," he said.

He has no fear that people will start holding onto their phones, content with the technology they have.

"Last year there were almost 100 new models that came out," he said.

"And what's really hot and sexy today is passe' next month."

About RMS Communications Group Inc.
Since 1985 RMS Communications Group, Inc. has been a leading wireless wholesaler with customers all over the world. It supports the wireless industry with innovative services designed to help service providers, wireless agents and corporate customers get the most out of their wireless devices. More information can be found at http://www.RMSComm.com and http://www.CellForCash.com.