Evolution of the Wireless Industry (My personal commentary)

[Simon5282]

This has been an interesting year in the wireless industry. I know in the past I have posted on how the wireless industry has the consumer in a vice grip and controls everything, especially when it comes to phones, high price plans, and contracts. It seams like things are changing very fast.

As far as the lock down on phones there has not been much change. We have seen a little bit of change with Best Buy selling unlocked phones, and we can also purchase them in a few Wal-Mart stores. Specialty electronic stores almost always have them. Of course we have online stores, but you have to be actively looking from them there and you cannot just stumble upon them like you can at Best Buy. Hopefully with LTE around the corner, the free market will demand change.

This year we have seen vicious competition in the industry. The plans are down to fifty bucks for unlimited minutes with unlimited text thrown in at an additional ten bucks a month. We have both unlimited pricing in messaging and phone data (with soft caps of course).

Finally we have also seen the carriers start to prorate their ETF's. For the most part the ETF's are not directly tied to the plans anymore, just to the devices. You can get month to month service off of the Verizon website and T-Mobile Website. ATT allows you to sign up on a month to month bases in its corporate stores. With the economy turning sour and peoples credit scores getting destroyed because of it, I see the prepaid side of the house increasing to protect both the carriers (they do not have to worry about people not paying their bills) and the consumer (you will never owe the carriers money.)

The most exciting things that I think are happening CURRENTLY in the industry is T-Mobile completely separating their devices and rate plans, (shows the consumers that there is a different way, one that works very well in Asia and about half of Europe chooses) Verizon jacking up their ETF's (what a way to burn your customers) and this ridiculous lawsuit (disgust the consumers even more and shows the childish, that's not the word, dirty and disgusting side of the industry). I hope that these events combined with the free market, competition and consumers demanding with their dollars a fair system continue to change the industry.

So, what are peoples thoughts on this? Do you agree or disagree? Why?

[hme83]

I definitely can see prepaid service becoming more popular - at least with at&t, if you can put up with the lack of roaming coverage, all but the highest need data users and family plan members can likely use prepaid with a significant savings.

Sounds like I am maybe out of the loop re: a major (and exciting) change at T-Mobile - what exactly do you mean they've separated their phones from their service plans (aka European style)?

[Telekom]

Originally Posted by hme83 I definitely can see prepaid service becoming more popular - at least with at&t, if you can put up with the lack of roaming coverage, all but the highest need data users and family plan members can likely use prepaid with a significant savings. Sounds like I am maybe out of the loop re: a major (and exciting) change at T-Mobile - what exactly do you mean they've separated their phones from their service plans (aka European style)?

T-Mobile just rolled out new plans. Go to t.mobile.com and you'll see.

[hme83]

You must be talking about the "Even More Plus" plans? I hadn't made the association with them being "European style" when reading about them previously - but I suppose they somewhat are since it is contractless service.

When I think of "European style" I think primarily of phones that haven't been crippled by the carrier's branding and where the phone is not subsidy locked to the carrier's network. I presume you are still purchasing a T-Mobile branded device and that it is locked to T-Mobile's network (for some period of time) even with these plans?

(And of course since it's GSM you can use your own unlocked device with the plans as well.)

[Telekom]

Originally Posted by hme83 You must be talking about the "Even More Plus" plans? I hadn't made the association with them being "European style" when reading about them previously - but I suppose they somewhat are since it is contractless service. When I think of "European style" I think primarily of phones that haven't been crippled by the carrier's branding and where the phone is not subsidy locked to the carrier's network. I presume you are still purchasing a T-Mobile branded device and that it is locked to T-Mobile's network (for some period of time) even with these plans? (And of course since it's GSM you can use your own unlocked device with the plans as well.)

The get more plus you do not get a carrier subsidy. You also get much better plans.

Unfortunately, we in North America (Canada and the US) have been accustomed to the model of packages with so and so many minutes with horribly expensive overage charges which encourages people to get minute packages usually that provide many more minutes than they'll ever use. People want the same amount to be paid every month.

[hme83]

Originally Posted by Telekom The get more plus you do not get a carrier subsidy. You also get much better plans. Unfortunately, we in North America (Canada and the US) have been accustomed to the model of packages with so and so many minutes with horribly expensive overage charges which encourages people to get minute packages usually that provide many more minutes than they'll ever use. People want the same amount to be paid every month.

I must not be looking in the right place/thinking of the right thing ("Even More Plus" plans)? As with these it says they provide free overage alerts on the non-unlimited plans, so there must be overage charges?

But these have combined an easier way of paying full retail for the phone (still have to request subsidy unlock code, I presume), obtaining no-contract post paid service, with a more bundled (inc. "all you can eat" options) approach to the voice service/features.

[JFB]

It seems to me like every carrier feels the heat of competition.......except Verizon.
I wish there was more competition at all levels, and more carriers. More and more it just feels like there is Verizon and then everybody else. They have a very strong position in the market now; I wonder if any of the changes going on will affect them.

[hme83]

Originally Posted by Simon5282 ....................... The most exciting things that I think are happening CURRENTLY in the industry is T-Mobile completely separating their devices and rate plans, (shows the consumers that there is a different way, one that works very well in Asia and about half of Europe chooses) Verizon jacking up their ETF's (what a way to burn your customers) and this ridiculous lawsuit (disgust the consumers even more and shows the childish, that's not the word, dirty and disgusting side of the industry). I hope that these events combined with the free market, competition and consumers demanding with their dollars a fair system continue to change the industry. So, what are peoples thoughts on this? Do you agree or disagree? Why?

I finally had an opportunity to really take a look at T-Mobile's website this morning, and I see what you mean by this statement now. It's easier to see if you pick a phone first so you can see the device pricing difference and then get the service plan comparison from there.

It is interesting - I also found it interesting that they will allow you to finance your device purchase over 20 months (interest free/billed in your monthly billing - so they are making it "easy" to keep your T-Mo service for almost the standard contractual period) with the Even More Plus plans (non-subsidized/no contract); while with the Even More plans (subsidized, so of course the equipment cost is less) you can only have them carry it for up to 4 months).

I presume that if you bring your own equipment, you can still obtain service with the "Even More Plus" plans? And also that if you purchase a T-Mo device with the "Even More Plus" plans that they will immediately provide the subsidy unlock code?

Regardless - it is great that they have provided this alternative; certainly if T-Mo coverage were better in my area it would be worth considering a change in providers for the lower monthly service pricing since I tend to buy my phones on an unlocked/unbranded basis anyway.

eta: Also, if you purchase a T-Mo device/take the "Even More Plus" service, is the data plan still a requirement for smartphone/PDA's? It's my understanding that T-Mo's current policy re: data plans on smartphone/PDA's is that if you purchase your phone at full retail, it is not required.

[Telekom]

Originally Posted by JFB It seems to me like every carrier feels the heat of competition.......except Verizon. I wish there was more competition at all levels, and more carriers. More and more it just feels like there is Verizon and then everybody else. They have a very strong position in the market now; I wonder if any of the changes going on will affect them.

The trump card that Verizon has always held is their network. No one can really dispute that their network is the hardiest. I don't know if they just planned better or they acquired more or had better roaming agreements, but Verizon is king. Many of the people that I know were with Verizon and only switched because of the iPhone now complain of performance on T's network. T really is king when it comes to end user equipment. Network... not so much.

Yes, I believe more competition is always better for the end user. You only have to look at wireless service in Canada where there's little competition. They have crappy rates and pay for things that US wireless subscribers take for granted (free domestic long distance, free added calling features such as voicemail, three way calling, call waiting, etc.) It scares me that they're saying that T-Mobile should be acquired by another company (gawds no AT&T!)

[scotsboyuk]

An interesting discussion, but perhaps a warning tale of thinking the grass is greener regarding competition:

Here in the UK there are five major networks and about a dozen MVNOs. They serve a population of approximately 61 million and provide around 75 million mobile lines for a penetration rate of approximately 122%. The UK, perhaps uniquely, is like a microcosm of the global mobile market with 4 of the top 10 global providers operating in the one market. It's a real clash of the titans with each of those networks having hundreds of millions of global customers and able to influence events on a global level.

On the face of it there is spectacular competition with prices continuously falling, minutes and text allowances continuously rising and handsets becoming cheaper. However, there are other forces at work that serve to retard competition and lock customers into longer and longer deals as well as restricting customer options.

What do I mean by that? Well let's take an example, a standard contract with a middle of the road handset, nothing too fancy or expensive.

Free Samsung Tocco Lite
O2 - £30/month, 600 minutes, unlimited texts
Free PS3
24 months
Free insurance for 1 month
Free delivery
Free tech support for 1 month

Looks like a reasonable deal. However, you will be locked into a 24 month contract where previously the standard was 18 months. You will not be allowed to lower your price in the first 12 months of the contract and after that only one step at a time per month. Upgrading early, usually two months early, will involve the two months you skip being added onto your new contract.

The worst part, however, is that it conditions customers to expect a free handset and possibly a free gift. A PS3 is by no means the only thing being given away free, they give away widescreen TVs, money, flights, Xboxs, Wiis, etc. In other words people come to expect freebies and don't actually appreciate the value of what they are getting. That causes people to be prepared to accept ever longer contracts because they are getting 'something free'. It also causes them to overlook restrictions place don them that didn't use to be there, again because they are getting 'something free'.

It has a knock on effect too because the longer contracts harm third party retailers as they can't sell people new handsets as often. If affects the sale of insurance products as people have a distorted impression of their handset's value. It causes resentment and disappointment amongst customers when they are well into a long contract and want a new phone (for free of course).

[Jay2TheRescue]

It sounds like the US market. Everyone wants a "free" phone. I've seen people walk into a store 1 year into a 2 year contract, with a broken phone. Out of warranty, no insurance, and they expect a "free" phone. While the US carriers haven't gotten into including game systems in phone packages, I guess its just a matter of time before they do. I've been very happy that AT&T has let me upgrade 17 months into a 24 month agreement, and has never added the remaining months to my new contract. Then again, on the rare occasions that I have to call customer service I usually hear "Wow! You've been a customer of ours for nearly 10 years.", and I usually get whatever I'm asking for.

Maybe they can include Guitar Hero World Tour for the Wii with my next upgrade...

-Jay

[hme83]

It does sound more like the US market than I tend to think of.

I think what exacerbates the situation here is the fact that two network technologies are in play (GSM vs. CDMA), so that cuts the US market for manufacturers; plus American GSM is not the same frequencies as used overseas - forcing manufacturers to make multiple versions of a device if they aren't just going to include all frequencies (GSM and 3G). At least in my opinion those factors serve to discourage the manufacturers from making phones that are US compatible unless a US carrier agrees to pick them up - providing an artificial, ready-made market for the model.

While I've known that Europeans have an option for a contract w/ subsidized equipment as well, I also have the perception that a European consumer has a lot more equipment options available to them - without the carrier muddying things up.

I agree - the only way for consumers to truly know, appreciate, and make purchasing decisions based on the value of both the equipment and the service is to purchase them separately. Without that the carriers and manufacturers aren't forced to compete with each other on just the merits of their own price vs. quality - at least not to the extent of greatest benefit to the consumer.

[Telekom]

Originally Posted by hme83 It does sound more like the US market than I tend to think of. I think what exacerbates the situation here is the fact that two network technologies are in play (GSM vs. CDMA), so that cuts the US market for manufacturers; plus American GSM is not the same frequencies as used overseas - forcing manufacturers to make multiple versions of a device if they aren't just going to include all frequencies (GSM and 3G). At least in my opinion those factors serve to discourage the manufacturers from making phones that are US compatible unless a US carrier agrees to pick them up - providing an artificial, ready-made market for the model. While I've known that Europeans have an option for a contract w/ subsidized equipment as well, I also have the perception that a European consumer has a lot more equipment options available to them - without the carrier muddying things up. I agree - the only way for consumers to truly know, appreciate, and make purchasing decisions based on the value of both the equipment and the service is to purchase them separately. Without that the carriers and manufacturers aren't forced to compete with each other on just the merits of their own price vs. quality - at least not to the extent of greatest benefit to the consumer.

Exclusives with a carrier also makes an effect. I know from personal experience that lots of people I know who were very satisfied with Verizon and T-Mobile switched to AT&T solely because T had the iPhone even knowing that T's network wasn't as robust as Verizon's. The usual advice not to switch carriers just for a device was sort of thrown out the window and just because of the iPhone and not at all because of the merits of the network. It's been said that if Verizon had the iPhone instead of wannabe devices ('Droid, Storm) they'd be with Verizon in a heartbeat.

[viewfly]

Originally Posted by Telekom The trump card that Verizon has always held is their network. No one can really dispute that their network is the hardiest. I don't know if they just planned better or they acquired more or had better roaming agreements, but Verizon is king. Many of the people that I know were with Verizon and only switched because of the iPhone now complain of performance on T's network. T really is king when it comes to end user equipment. Network... not so much. Yes, I believe more competition is always better for the end user. You only have to look at wireless service in Canada where there's little competition. They have crappy rates and pay for things that US wireless subscribers take for granted (free domestic long distance, free added calling features such as voicemail, three way calling, call waiting, etc.) It scares me that they're saying that T-Mobile should be acquired by another company (gawds no AT&T!)

T doesn't carry the iPhone, nor does it have the correct 3G freq to operate with the iPhone. That would add further frustration for someone bringing an iPhone to T in the USA. So not so hot coverage, and you are only on EDGE, at best.

[Telekom]

Originally Posted by viewfly T doesn't carry the iPhone, nor does it have the correct 3G freq to operate with the iPhone. That would add further frustration for someone bringing an iPhone to T in the USA. So not so hot coverage, and you are only on EDGE, at best.

Be careful what you call a 'T'. T is not T-Mobile but rather the stock symbol for AT&T. Sorry for the confusion.

AT&T = T
T-Mobile = DT

[scotsboyuk]

@hme83

Part of the reason there are so many handsets available in the UK market is that it is one of the main areas the networks compete in. They each try and get exclusives and of course if one network doesn't offer a sought after device people just go elsewhere.

[Telekom]

Originally Posted by scotsboyuk @hme83 Part of the reason there are so many handsets available in the UK market is that it is one of the main areas the networks compete in. They each try and get exclusives and of course if one network doesn't offer a sought after device people just go elsewhere.

It isn't just the UK either. Europe is all one standard i.e. it's all GSM. All the manufacturers can send lots of different phones all geared for GSM. In the US you have the dilution of the split between the two different technologies CDMA (Verizon and Sprint) and GSM (AT&T and T-Mobile.) The US may be a big market but it's not like the market that comprises the rest of the world who are principally GSM with a few countries that have adopted some CDMA networks.