Four ways to fix the broken U.S. cellular market


Just read a great feature in my print copy of InformationWeek that focuses on the U.S. cellular carriers. Highly recommended reading since nearly everyone is impacted by one (or more) of the carriers and it also provides a good insight to our overseas readers where the markets are much different. Based on the article, I’ve melded some of my own observations on how the market is broken. Feel free to add your own and comment….I’d especially love to hear from our readers outside of the U.S.

1. Stop removing features. I don’t know how else to say it, but just stop. If a handset OEM puts a feature in the phone, please don’t remove it unless you’re 100% that your network can’t support it. While we’re on the subject: I have no professional experience in your industry, but I’m pretty sure that Bluetooth and WiFi are pretty stable these days. Heck, they even follow established standards, so let’s not mess with them, ‘k?
1a. If your network can’t support a feature that an OEM includes, start looking into how you’re going to support it. I’m betting that the handset manufacturers have a better handle on desired handset features than the carriers. Not sure that folks want the feature in question? Just Google the feature and handset in question to read what bloggers and readers are saying before you even launch the product. You get free market research and we get the hopes of a fully-featured device.

2. Find more ways to work together. We’ve already seen a few attempts at handsets that support both CDMA and GSM, be we need more of ’em. Verizon & Sprint: meet AT&T and T-Mobile. Good now, that we have the introductions, stop trying to squeeze every dime from your competition by network and technology differentiation. Provide top-notch service with flexibility and that can be the difference. Adding plans that allow for calls to customers on any network is a good start and I don’t expect one side or the other to tear down and rebuild the cellular infrastructure, but really: does the gap between both sides have to be bigger than the Grand Canyon?

3. We crave data more than voice, so don’t bleed us dry with exorbitant data plans and unlimited caps that aren’t unlimited. I have no issue playing more for a data service over a voice service because frankly, I use the data service more often and for longer periods. How about some creative plans that come in at a better price point, say $50 or $60 a month that split that voice/data on a sliding scale? Example: the same price gets you something like

  • Up to 200 minutes of voice and 6 GB of data a month
  • Up to 500 minutes of voice and 4 GB of data a month
  • Up to 800 minutes of voice and 2 GB of data a month
  • These aren’t three separate plans illustrated, they’re one plan…if you go over on the voice minutes, you give up some bandwidth on the data side and vice versa.

My point is: recognize you have different types of customers with vastly different (and often changing) needs. Yes, you have many voice and many data plans, but there can be a happy medium for you and for your customers; plus it doesn’t haven’t to be as complicated as the many current plans you offer. In this case, less is more.

4. Open up to services that as good as, if not better than, yours. In the monopolistic approach of offering your own services for pay on the network, customers are missing out on better services or services that they want and can’t get. Don’t block VoIP, embrace it. If we already pay for a music streaming service, let us use it on your network instead of charging us for a lower grade music service that you’ve integrated. It’s really very simple: focus on what you do best, which is providing the information turnpike that we travel on. If you run all of the rest-stops on the turnpike, you’re just running the risk of customer loss as soon as one of your competitors wakes up and ‘gets it’.



I used to work for Verizon, way back to before NYNEX and Bell Atlantic merged. Went through that merger and the GTE one. Thankfully, I missed out on the MCA merger. Hellish tings, those tel mergers…

None of the carriers, be they former Baby Bells or whatever they have become in the past few years, ever want to be just a fat, dumb pipe. They want to sell you the access AND the services. They don’t know how to do the services right, of course, but that doesn’t stop them from trying. Again, and again, and again, and again, and again…

The wireless carriers, most of whom in the US were once landline carriers of one sort or another, are no different. They don’t want to be just a fat, dumb pipe.

They see no future in it.

They will do anything and everything they can to ensure that you go to them for the services, even though it is likely they don’t have the better or the less expensive service.

(Professional Telecom Curmudgeon)



5) Carry and sell unbranded/unlocked devices!
5a) Have month-to-month data/voice plans without a time contract


I agree! Carriers treat current customers like manure compared to prospective ones, and it creates an environment of antagonism between customers and themselves. They should allow better upgrade paths and better customer support (especially in the smartphone arena).

Nurhisham Hussein

“In the monopolistic approach of offering your own services for pay on the network…”

I think that’s the problem in essence – the current business model used by carriers that rests on network differentiation and long-term locked-in contracts results in a monopolistic/oligopolistic market structure. Customer retention isn’t a key strategy for carriers as there are disincentives for customers to switch networks, which leads to poorer customer service and less attention to product/service enhancements.

I also personally believe the practice of offering deep subsidies on phones coupled with lock-in contracts, no matter how attractive the consumer in the short term, slows the pace of product innovation as hardware turnover is considerably less. It also reduces the diversity of hardware available, as manufacturers have to deal through the carriers rather than independent retail networks, and this involves not inconsiderable expense. Why else does US almost always appears to be last to get any of the latest phones?

Bottom line: less competition, higher costs, lower social benefits.


Along with your excellent suggestions Kevin (and your’s too James), I’d like to add another. Give us reasonable contract terms so we can upgrade our phones if we want. It’s bad enough having to buy a new phone every (or every other) time a new Operating System is released. If that’s going to be the case then at least offer us a reasonable way to purchase one of those new phones.

A case in point, last September (8 months ago) I upgraded my old MPx220 to a Cingular 3125 (The “Star Trek” phone). Now I find out HTC feels they didn’t sell enough of them so no plans to release WM6 to the carriers. Combine that with the fact that I was in my local Cingular store last week and discovered the 3125 is no longer carried in the store, it’s only available online. So I have to wonder how long it will even be available there.

So last September I did the upgrade because my MPx220 had seen its better days and the WM5 upgrade wasn’t being released for it. So I upgrade to the 3125 which was what, 2-3 months old at the time, for WM5 and a new phone. So now 8 months later I’m in the exact same spot I was then and I still have 12 months to go on my contract!!!! Aaaaaarrgh!

I think I’ll just get rid of my cell phone altogether. It will cut down on my bills and my life will be a lot less disrupted. The only problem being it’s how my clients reach me .

Oh well, back to counting the months until upgrade time again, so I can start the process all over.


You have some very valid points and I couldn’t agree more, however, here’s a quick comparison of data rates to those of the Canadian carriers – Bell, Telus and Rogers (BlackBerry rates for all three, non-BlackBerry rates are slightly different, but in the same ballpark):

Rogers (EDGE) / Data Included / Additional Data
$25 (on 3 year term) / 0.5 MB / $31 per MB
$40 (on 3 year term) / 1 MB / $10 per MB
$60 (on 3 year term) / 25 MB / $7 per MB
$100 (on 3 year term) / 200 MB / $5 per MB

Bell (CDMA) / Data Included / Additional Data
$25 / 4 MB / $12 per MB
$40 / 8 MB / $8 per MB
$60 / 25 MB / $6 per MB
$100 / 250 MB / $3 per MB

Telus (CDMA)
Same as Bell above

All rates are monthly.
Using even 1 GB of data in one month on one of our carriers can easily run into thousands of dollars by the current pricing – far cry from $50-$60 dollars, even with currency conversion :-)


Kevin, as usual, a well-thought out post.

You’ve suggested the carriers become exactly what they fear the most–being a fat, dumb data pipe.

As you may recall I have spoken before of having worked for Verizon in the past. While I didn’t work the wireless side, the same people run things at the top. They spent thousands if not millions on the portal and its accompanying services because they felt they needed to be like MSN or Yahoo. (They aren’t, and never will be because they don’t get it.) The Wireless side is the same. They make more money by being more than just a fat dumb pipe, and they know it. (Even though I think they dishonestly steer customers to their own solution, many of whom do not know better, or will simply take the path of least resistance.)

When PDA phone browsers are proxied to maximize the carriers content (Cingular did this with the 8125 I owned), you know something is rotten in Denmark. Er, New York City.


Dave (socpsy)

Well said!!

If only they would pay attention to comments like these!

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