AT&T’s new SIM-only option is a positive step towards open access, and opens a new chapter in the US cell phone service market. However, it also highlights just how far behind the US is compared to the rest of the world.
A few days ago AT&T began offering customers the option to purchase cell phone service online without buying a phone, but the deal made no sense. The service-only SIM cost $5 ($10 minus $5 online rebate), but required you to commit to a standard 2-year contract. Elsewhere on the site you can get a free phone in return for signing a 2-year contract. There’s nothing to stop you from selling the phone on eBay and keeping the SIM. Why pay $5 to NOT get a free phone? (more…)
According to a new survey by Compete Inc., “93% of respondents said that getting a phone at a reasonable price was either important or very important to them,” while only 65% said the same about being able to switch carriers without buying a new phone.
I can’t find the original research online, but there are several problems with this article. One is math, but I’ll save that for a footnote.
The big problem is a hidden assumption: you can have cheap phones or you can have open access, but you can’t have both, so consumers will choose price. (more…)
There’s a lot of interesting articles about the mobile market in this week’s Carnival of the Mobilists, but I have to agree with Judy Breck’s selection for post of the week - an article about an SMS support network for HIV patients in Mexico. It’s more evidence that for many people in the world the mobile phone is their primary means of accessing the Internet.
PDAs are all but extinct, low-end digital cameras are dying off, and mp3 players and even watches are threatened. A lot of people in our industry predicted it; many consumers prefer to carry a ‘Swiss Army’ cell phone instead.
So why are so many people carrying two cell phones?
A new survey by In-Stat reports that about one quarter of the “career age” (age 30-65) cell phone users in the US carry more than one handset, and that this number has grown by over 40% in the past year. That’s more than 20 million people.
Skydeck can confirm this. We asked 1,000 cell phone subscribers* over the age of 18 how many phones they carry, and 14% said two or more. That means 30 million Americans have at least two cell phones.
A blogger made 56 calls to Verizon customer service and asked every rep the same two questions about overage and roaming charges for data. He got twenty-two different answers.
Some people see this as just another example of poor customer service from major corporations, some just laugh at the CSRs for confusing bits with bytes and $0.02 with 0.02¢. But the reps on these calls seem courteous and conscientious, and most people who hear about the 2¢ story need a minute to think about the math.
We see a different problem: cell phone plans are ridiculously complicated.
Rate plans for voice are bad enough. A typical plan has a bucket of anytime minutes, a separate bucket for nights and weekends, a third for in-network calling, an overage rate, special rates for voicemail minutes and calls that don’t get completed, roaming limits for US networks, and a whole other matrix of rates for international dialing and roaming.
Verizon Wireless has announced that by the end of next year consumers will be able to bring any CDMA device to its network, provided it meets some minimal technical requirements, and to run any application on that device. Since Verizon has maintained tighter control over their network and devices than any other US cell phone company - perhaps any cell phone company in the world - my initial reaction was a mixture of shock and delight.
But there is less to this than meets the eye. Verizon has taken an unprecedented step - for Verizon. With respect to open access, Verizon is still several steps behind every other carrier in the US.
Who benefits from today’s announcement?
Affluent consumers who want high-end phones will have more choices. Discussions about open access usually focus on these people, but there aren’t very many of them.
Sprint needs to run a few extra laps, to catch up with the carrier pack. While Skydeck research shows that overall the majority of consumers (68%) are positive about their carrier’s performance, Sprint is consistently lagging behind Verizon, AT&T, and T-Mobile. Here are four supporting examples from our research:
1) General satisfaction: Is my carrier fair and honest? Are bills predictable? Would I recommend them… or switch?
For these questions, Verizon fairs the best, receiving positive feedback from 75% of its customers and negative feedback from only 9%. T-Mobile and AT&T receive negative marks from 12% of their customers, while Sprint’s customers were unsatisfied 19% of the time.
Skydeck isn’t working with Google. We’ve read the same articles and heard the same rumors that you have. So these are just educated guesses. But everybody else is doing it, so why not us?
Following a class-action lawsuit, Sprint Nextel has agreed to unlock customers’ phones at the end of their contracts and to activate non-Sprint phones on the network. This will allow consumers to take their handsets from one CDMA network to another. Sprint and Verizon Wireless are the big ones in the US, but Alltel, MetroPCS, and Leap have almost 20 million subscribers between them who are also affected by this — assuming the phone operates on the right frequency bands and that the new carrier agrees to activate the phone (MetroPCS and Leap definitely will).
If true, this is a big departure for Sprint, which had the most restrictions until now. But if Sprint agrees to activate any CDMA handset on its network going forward and Verizon Wireless continues to hold the line, Sprint could benefit from this change, in net adds and lower CPGA.
Data services may not work, but those looking for the cheapest option in the market won’t care that they can’t subscribe to VCast.
Posted by: Dan
Posted by: Jason
