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Summary:

You don’t have to look very far on the web to find story after story of customer abuse at the hands of the US carriers.  They lie, steal and otherwise do what they will to us their customers.  The sad thing is they do it to […]

Med_039cYou don’t have to look very far on the web to find story after story of customer abuse at the hands of the US carriers.  They lie, steal and otherwise do what they will to us their customers.  The sad thing is they do it to long-time customers just as quickly as to new customers, in fact they often treat new customers better so they can start the gravy train.

My experience today trying to buy the brand new T-Mobile G1 has brought to light that for the carrier it’s business as usual.  I watched the live press event pumping us up about the new G1 phone and listened very carefully as the company representative stated the price of the new phone.  He stated, and the event is recorded so that we can refer to it as I didn’t write down his exact words, that for existing T-Mobile customers the price of the G1 was $179.  I am certain that there was no mention of "qualifying" T-Mobile customers, as in those qualifying for a phone upgrade price.  He simply said the price was $179.  I’ve already recounted how my own price was $399 with a $100 "online discount" which is not even close to the price given at the press event.  I’ve heard from over a dozen other T-Mobile customers who were quoted the same high price online which means the pricing given at the press event is flat fraudulent in my book.

To make matters worse, the T-Mobile rep also touted the unlimited data plans.  Now we’ve all heard of these unlimited data plans that turn out to be capped in some way, that’s nothing unusual.  But T-Mobile is really outdoing themselves by globally touting the "unlimited" data plan while the very fine print about the plan paints a greatly different picture (click to go there):

Tmobile_unlimited_data_plan

In case you can’t read the tiny print at the bottom it states basically that if you exceed 1 GB of bandwidth in any given month then T-Mobile may throttle your unlimited 3G plan to 50 kbps.  Yes, you read that correctly.  If you exceed 1 GB of bandwidth in a month, something that is not hard to do if you just do the activities that T-Mobile lists in that same image above, then they can throttle your data usage to slow speeds worse than EDGE.  How is that not deceptive?  (NOTE: I found this on the T-Mobile G1 site but see now that Engadget also spotted this.)

  1. Why would you want a phone that requires an adapter to listen to conventional 3.5mm headphones? Amazon music was advertised heavily for this phone and you need an adapter to hear it. And with capped bandwidth, you can’t even download that much anyway. And what about that “cloud computing” thing Google is huge about? How can you do that with 1gb a month cap?

    Wow did they drop the ball with this one.

  2. The problems of this sort are just gathering steam, whether its Cable companies seeking to maintain a stranglehold on selling you content by limiting the amount of video etc that you can watch over the IP or cellular carriers seeking to throttle the same sort of activities over their networks, its all going to get worse.

    The exception of a “trailing competitor” like Sprint or even Wimax competition, is about the best hope we have of someone keeping these companies focused on the real opportunity which is lots of competition, lots of innovation and lots of bandwidth everywhere.

  3. GoodThings2Life Tuesday, September 23, 2008

    And the sad part is that it’s like this for all the carriers.

    AT&T charges an additional $10/month for 2 years for “unlimited text messaging” for iPhone users which adds $240 to the cost of the phone (meaning it’s already more than the cost of the hardware, but then they increase the unlimited data package (which is really capped, publicly to 5GB). If you try to use non-standard packages, you receive menacing letters telling you to switch or be disconnected.

    Verizon cripples all of their phones (like the XV6800 which has its GPS chip disabled and has the fugliest case design I’ve seen on a smartphone), despite Sprint’s Mogul counterpart being attractive and touting GPS. Meanwhile Verizon also caps at 5GB, doesn’t allow the i760 to tether (didn’t even let Samsung include the program in the firmware), and yet charges $30/month more for the service than Sprint.

    Now, the sad part is that Sprint is hemorrhaging customers like nobody’s business, and yet they have the best phones and the best packages. Their problem? Shady customer service and billing issues, from what I’ve heard. I called into their customer support line once for a PRL file update, but took 3 attempts just to get to a person who know what PRL meant and still didn’t get it pushed out properly. I’ve never had a billing error, but I’ve heard the stories of those who have. In their defense, however, they at least have new management who is hopefully cleaning things up.

  4. If it makes you feel any better, this sort of thing isn’t confined to the US. Here in the UK we have similar problems with mobile companies. In Australia this sort of throttling is quite standard for ISPs as well as phone companies.

    The thing I can’t believe you have to put up with is different companies using different frequencies. At least the rest of the world has learnt to standardise mobile frequencies to prevent consumers being locked to a company with a particular type of phone. That’s crazy.

    The communications industry is overdue for some hefty regulation from governments. The first thing I’d like is to prevent ISPs from advertising unlimited internet that’s anything but unlimited.

  5. How do the carriers get away with calling limited data plans unlimited?

  6. Bring on the day that mobile phone companies realise they’re just another ISP.

  7. 1 GB is pretty strict, but probably okay for most people. I stream Pandora over 3G all day, 30-40 hours a week, and my monthly data usage clocks in under 4GB. I could probably squeeze under 1 GB if I skipped the Pandora streaming, not that I’d want to.

  8. Whatever the practical usage models are today, the appetite for bandwidth is going to grow and yes anyone marketing “unlimited” with limits is laughable, and it should be challenged in court. Someone will eventually.

  9. James,

    I can understand how you would feel misled by the $179 price, but I don’t see how this is unexpected. If you have been following the coverage (i.e. rumors) leading up to the G1 launch, sites like tmonews.com have quoted the price around $199 for FULL upgrades. All along, we’ve been expecting that the G1 would work like all other phones in terms of upgrades. If you’re eligible for a full upgrade, you get the 2-yr contract price. Otherwise, you pay the partial upgrade price. If you are ineligible for an upgrade, you pay sticker.

    It is unfortunate that the details were not explicit in the conference today and that you are not alone in being surprised by the $299 price tag. I have to think though that T-Mobile did not do this maliciously. Why would they purposely get customers excited for a $179 price knowing that their actual upgrade price would be $299 or $399? They wouldn’t.

    It’s one thing to get all worked up over true misconduct, but T-Mobile is following the same upgrade rules here that they do with all other devices. Having subsidized phone prices is the trade-off for contracts and upgrade complications. If you don’t like it, pay sticker on Verizon and go month-to-month. Or wait until the general availability of the G1 and buy it retail. No contract extension, no upgrade rules.

    And as for the data cap, we’ll all have to wait and see how it plays out in practice. In my experience, T-Mobile is pretty reasonable. I wouldn’t expect reasonable data usage to suffer any penalty.

  10. There does need to be some serious regulation to protect the consumer from ISPs and Cell/Mobile operators. We have no rights and there is little need for the operators to compete as they’ve been allowed to buy each other up and form huge anti-competitive companies (AGAIN!)

    Plans should be clearly priced with the phone subsidy noted.

    Bring your own phone to the network or complete your contract period then you should get the plan at the unsubsidised rate.

    Unlimited should mean exactly that, no if, buts or maybes.

    Licenses/franchises should be granted on the basis of providing a level of service that encourages competition and innovation. This would mean that there would have to be uncapped plans at a reasonable rate.

    I can only hope that Google, having the cash and incentive, actually put some lobbying money towards getting this kind of thing put into law. I just don’t believe that people and companies aren’t more vocal on this issue.

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