Going Down Fighting

September 15, 2010

Verizon and AT&T are scared. It’s probably obvious but I haven’t seen or heard it discussed much: people just aren’t making many phone calls anymore. The decline probably started as email gained in popularity. And with more and more people maintaining social relationships through Facebook’s wall and messages and chat, the decline has surely quickened.

I read this post last night titled “Fighting The Wrong Fight.” It makes the astute point that iPhone vs Android is not the battle we as consumers should be spending our time thinking about and spilling ink over. We should really be concerned with the battle between ourselves and mobile “telephone” service providers like AT&T and Verizon.

I deliberately use quotes around “telephone” here, since all communication to and from our phones is just data. We should really call the wireless carriers “mobile data service providers.” But this subtle difference is precisely what mobile data service providers are scared we will discover. So I doubt they are eager for us to start referring to them with a properly descriptive phrase.

They are scared because they sell voice and SMS data at extremely high margins, and they would like to continue doing that. If people were to notice that wireless carriers are charging an effective rate of $375/MB for SMS (assuming each message costs five cents) they might get upset. Compare that to AT&T’s recent data plan price shift which charges $15 for 200MB for an effective rate of $0.075/MB and you understand why. So we see wireless carrier plans broken down into voice, SMS and data segments, to make it seem as though there is a difference.

But the shift from wireless “telephone” service provider to wireless data service provider is inevitable, and the carriers know it. It also appears to be inevitable that the wireless carriers will milk us for all they can on the way down (T-Mobile excluded; more in an upcoming post). All carriers besides T-Mobile are charging an extra fee to enable the free wifi hotspot feature included by default in the Android OS, which allows a computer to connect to the internet through the phone’s internet connection. Sprint’s data plans for the Android EVO cost $10 more than for their other smartphones. But why? It’s all the same data!?!

Wireless carriers are also trying to set reference prices for data service in anticipation of the total decline in SMS and voice usage. Just refer to recent changes in Verizon’s service plan prices where they cut voice plan prices while simultaneously raising data plan prices.

Now despite their obvious differences, I believe Google and Apple are both on our side in trying to relegate wireless data service to a commodity. But we’ve got to do most of the fighting ourselves. We need to stop putting up with carriers bullying us around. Stop buying carrier-locked phones. Stop signing long-term contracts in exchange for subsidized phones. Those are just carrier delay tactics. The sooner we push wireless carriers down where they belong, the better off we’ll all be.

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