Why we hate our American cell carriers so much

25 Comments

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.)

25 Comments

Brian K

I preordered the g1 and am excited to get it. If it is a flop I will be bummed out. I was a bit shocked to read about the throttling of the speed after 1gb is reached. I changed the service over the phone and it was explained as unlimited…No mention of a cap. I have been with T-Mobile for 6 years and will certainly ditch the G1 and t-Mobile if the bandwidth slowdown is an issue. I ordered this to get on the web while on the go..if I don’t get a good experience … see ya Google and t-Mobile..

Personally I can understand how Google would let them limit the bandwith; seems it would keep people off google search and can’t be good for PPC sales…

Dick Fer

It’s all about “revenue streams”. The carriers in the US are not out to provide good service. The carriers subscribe to the 85% rule. The 85% rule says that you try to keep 85% of your subscribers moderately happy. The remaining 15% are too expensive to deal with. The carriers are also forced to look at profitability. If they can’t turn a profit in 1 year, they won’t be involved. The first year of the contract pays the bills, the 2nd year of the contract is where they profit. They aren’t here to make you happy. Verizon’s marketing team has locked down their handsets because they are convinced that people will subscribe to their $9.99 and 19.99 entertainment packages. They’re convinced that the subscribers will pay $2 each for ringtones. Verizon adds these services with a catchy VZ in front of it, and it’s almost pure profit. But who’s stupid enough to buy that crap long term? You saw how ESPN, Disney, and Amp’d Mobile did. They flopped. No one wants to pay $20 a month for “up-to-the-minute” anything. They want ringtones, but don’t want to pay for them. They don’t want to pay $.50 to send a picture to someone else. They want to bluetooth it to whomever is standing next to them. Verizon spends so much time lab-testing their sets so that no one can get away with anything that they’re slipping behind. I left them because I was tired of their inability to put out the newest WM handsets. Sprint was getting handsets out the door 6 months before Verizon. GSM handsets are nice, you just swap in a SIM because they aren’t locked down to specific networks.

mark

Rather than wait for “the government” to do “something” about it, walk out. How hard can it be to say NO to a carrier that flat out lies about it’s features and prices? If you absolutely HAVE to have this phone so badly that you’ll tolerate the lies, then you deserve to be lied to. Hell, it’s way past time AT&T and Apple got a taste of it. The iPhone still lacks quite a bit of functionality I would call “basic” because I had it 5 years ago and AT&T’s 3G is an absolute joke, it’s pricing being the punch line. JUST SAY NO!

Stephen

I’m a T-Mobile subscriber and can get the phone for $179. I think it’s because my contract ran out. I would think the higher price for existing customers only applies to those mid-contract. Remember, if you’re mid-contract with another carrier and decide to change over to T-Mobile for the G-1, you’re still going have to pay the $200 early termination fee with your previous carrier. I’m not saying i like this policy, but I think the rationale is to prevent people from getting free/subsidized phones every three months… Am I wrong?

Jelster

@Gordon

But the implication is that it is the amount you download (user issue) that affects the service rather than the number of users subscribed to the service (operator issue).

While you could argue fair use, scaring customers into not using their devices for fear of charges, throttling or termination is just a means to pile more users onto the network.

Just because it’s the norm in places doesn’t mean it’s right or acceptable and we consumers shouldn’t be silent on the issue. These arguments for caps are the same ones Telecoms companies used to justify metering calls and raking in huge profits as a result.

Gordon Cahill

Well in Australia Optus is under pressure because they’ve put too many people on their 3G network, causing it to fail in parts of Sydney, our biggest city and the one with the most infrastructure. They had the best iphone deals at launch but now many users are having to turn off 3g to make and receive calls.

So it is in the interests of the isp’s to control usage so that the whole system doesn’t colapse under the weight of it’s users. Mind you it’s also their duty to provide an infrastructure that can handle the customers that they sign up to it.

All Australian ISP’s have “fair use” policies. So is isn’t just the US.

Gordon

Jelster

Even on cellular networks I fail to see the need for a cap, a network’s reliability is determined by concurrent connections not the historical bandwidth usage. Phone operators and ISPs are just using bandwidth as a stick to scare people into limiting their general usage so that they can pile on more users within the same infrastructure.

We need to stop equating bandwidth to a limited, scarce resource. If everyone downloads a movie at the same time their speed decreases but you don’t ever see “oops sorry bandwidth run out, continue download tomorrow when we get our next bandwidth delivery in”. Capacity as in speed is what service should be paid for but as the operators can’t/won’t ensure that they choose the fictional “bandwidth limitations” as a means to charge their customers.

Grrr, I feel sick thinking about this every time.

James Kendrick

T-Mobile was telling press folks after the event today that the $179 price was for all existing customers, no qualifications. They will have to back-pedal on this higher price biz pretty fast.

Byron

The Price $179 is clearly a marketing thing. But its not a lie. There are people who will get the handset at that prices but not everybody. Its just like when you see a big 70% OFF banner in a window in a mall somewhere. You know that not everything are marked down 70% off though there are some items that are really marked down as advertised.

But the unlimited data plan is clearly a LIE

Robt

@Frank agreed. It is kind of like that big Cable ISP limiting you to 250GB of data and not giving you a meter at your home page.

Why? Because I expect that they actually expect that the meter will drive up bandwidth usage as people realize that they are way under their limit and start doing more of the activities that compete with their content offerings.

Instead I reckon they would rather keep you guessing as to how much you are using and keep you in fear of the dreaded letter.

It could be something like this with T-Mobile. However as an AT&T customer at least I can say it is relatively easy to go to the home page and look at your data usage during the current cycle.

Frank McPherson

One more thought on the data cap. If T-Mobile is going to enforce then they better provide an easy way for users to see how much data they have used each month so they know whether they are getting close to the limit. I might find the 5GB limit that their competitors are having on their 3G service acceptable, but a 1 GB limit is well south of that.

Frank McPherson

The surprise in the price comes from the fact that no other price was mentioned other than the $179 price. The right thing would be to clearly state that price was for new customers. I agree that historically carriers have always provided lower prices to new customers, with the idea of attracting them. I think they were being a bit deceptive by not making that clear in any of the press or marketing information distributed today.

Frank McPherson

Well, I think the cell carriers are starting to draw attention of the government. Wasn’t a senator raising questions about the increasing price of text messaging? I think the carriers are being stupid opening the door to government action. After all, they lost the battle with number portability.

Frank McPherson

I think the 1 GB cap may also be tied to the desire to not allow tethering. While the G1 won’t support tethering, since Android is based on open source code, most are expecting there will be work arounds. So if you get a hack to tether the G1 you will pretty quickly eat up that 1 GB limit and you will be thrown off 3G.

Jelster

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.

John

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.

Robt

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.

Sumocat

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.

Patrick

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

Jake

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.

GoodThings2Life

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.

Robt

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.

David

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.

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