Consumers Union To FCC: Unlock Our Phones
My take on it - for what it's worth..
I'm all for an end to locking. The truth is, this wouldn't mean an end to subsidies at all.
Contracts are still a perfectly valid and effective way to retain customers and ensure subsidies aren't lost. Without locks, we may see some termination fees rise, but that's probably about it. I don't think it will impact much else.
The truth is, it's only a couple of major carriers that are strict about locks anyway - Sprint and AT&T Wireless. The rest have pretty reasonable policies.
Cingular has the right idea when it comes to subsidies. A few months ago I shopped for Cingular service, and there were three options:
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Contracts are still a perfectly valid and effective way to retain customers and ensure subsidies aren't lost. Without locks, we may see some termination fees rise, but that's probably about it. I don't think it will impact much else.
The truth is, it's only a couple of major carriers that are strict about locks anyway - Sprint and AT&T Wireless. The rest have pretty reasonable policies.
Cingular has the right idea when it comes to subsidies. A few months ago I shopped for Cingular service, and there were three options:
- 2-year contract / phone for free
- 1-year contract / phone half-price
- no contract / phone full-price
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I have to disagree, but only in one aspect:
Phone are also the means to differentiate one carrier from another. While there is certainly *some* carry-over from one provider to another, there's also a significant amount of difference. More of the latter than the former, I would think. I mean, the Sanyo VM4500 is a strong seller, and it's probably the most expensive non-PDA phone SPCS has ever sold. Sure it would be nice to use it on Verizon, but it sure gives SPCS something to call unique (for now).
See what I mean?
Phone are also the means to differentiate one carrier from another. While there is certainly *some* carry-over from one provider to another, there's also a significant amount of difference. More of the latter than the former, I would think. I mean, the Sanyo VM4500 is a strong seller, and it's probably the most expensive non-PDA phone SPCS has ever sold. Sure it would be nice to use it on Verizon, but it sure gives SPCS something to call unique (for now).
See what I mean?
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I don't think we disagree at all. 😉 That's a good point.
I think carriers like Sprint would still be able to offer exclusive handsets. If they want, they could offer certain handsets - like the Sanyos - only to customers who sign a contract, for example.
Although Sprint wouldn't really need to do that, since so many of their services - such as PCS Vision, Picture Messaging, Video Mail, ReadyLink - are essentially proprietary technologies such that the handsets are incompatible with other carriers' networks.
If you activated a Sanyo VM4500 on Verizon, you'd never be able to use any of the cool features of that phone on Verizon's network. And you wouldn't be able to use any of Verizon's extra services like Get It Now or even ERI....
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I think carriers like Sprint would still be able to offer exclusive handsets. If they want, they could offer certain handsets - like the Sanyos - only to customers who sign a contract, for example.
Although Sprint wouldn't really need to do that, since so many of their services - such as PCS Vision, Picture Messaging, Video Mail, ReadyLink - are essentially proprietary technologies such that the handsets are incompatible with other carriers' networks.
If you activated a Sanyo VM4500 on Verizon, you'd never be able to use any of the cool features of that phone on Verizon's network. And you wouldn't be able to use any of Verizon's extra services like Get It Now or even ERI....
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Also, most customers are going to be reluctant to get a phone that will be a pain to get service on. At TMobile we occasionally get customers using phone models purchased overseas or from another domestic carrier, and the main reason customers don't go for these spiffy phones is that it's going to be a LOT more of a hassle to have warranty work done on them. It's a lot easier to go with a supported handset model which can be exchanged easily rather than having to mail it back to the manufacturer for warranty repairs. Personally, I'm all for unlocked phones, but I must say it's going to make the job of customer care reps more interesting--having to troubleshoot problems on phones we've never heard of is a pain in the rear!
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But like you said, that's already an issue, and it's already handled just fine. As always, there will be supported phones - the ones sold by that carrier - and unsupported phones. I don't think that will change.
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I'm with you--I don't think the unlocking thing would change the industry significantly. A few people might bring along a favorite phone from another carrier, but I don't see it being a huge issue. Contracts and manufacturer's warranties tend to run about a year, with some exceptions of course, and most people want to get a new phone every year anyway. So they'll either be getting a new phone upgrade with the current carrier or switching to another carrier, with a subsidized free phone to start out, and another contract. I expect the only REAL fallout will be that two year contracts will go the way of the buffalo, not competitive enough... and good riddance, I say!
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Aleq said:
... I expect the only REAL fallout will be that two year contracts will go the way of the buffalo, not competitive enough... and good riddance, I say!
Hmm - I'm not sure I agree with that. The biggest reason for the locks is to deter customers from switching. Without the locks, I think carriers would try even harder to get and keep people people in contracts.
I think things would actually go the opposite direction - we might even see three-year contracts! 🙄 We might also see the end of no-contract options.
Keeping customers isn't about being greedy - it's a financial necessity. When customers switch, that's called churn. Even if a carrier is gaining customers overall, high churn is al...
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A big selling point I use for TMobile is the max one year contract. Longer contracts don't make loyal customers, they make hostage customers. Long contracts with short warranties make infuriated customers! People switch carriers because they're upset with the carrier, or it should be that way, anyway. A customer who goes to another carrier because they want a specific phone is an anomaly that will be taken care of by an unlocked phone. Get whatever phone you want, use it with whatever carrier you like, and devil take the hindmost to stay competitive on things that wireless carriers actually have some control over, like rate plans and customer service and coverage. I get ticked off when a customer wants to blame TMobile because they bou...
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Aleq said:
... Longer contracts don't make loyal customers, they make hostage customers. Long contracts with short warranties make infuriated customers! ...
I agree 100%. I'm certainly not saying contracts are great, I'm just saying they're a business necessity for the carriers, and I think long contracts will become even more important to the carriers if locking is abolished. Again, I'm not saying I like it! 😉
Aleq said:...
... Let the equipment manufacturers have to answer for the garbage they market and I think we'll see an improvement in quality tout de suite! I've seen the analogy drawn before, but it bears repeating, do you call the cable company to complain because your P
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The issue with cellular - and what makes it different from cable/TV - is that cell phones are a vastly more complicated technology in virtually every way, and getting more complex every day. The average Joe doesn't want to worry about MMS and WAP settings, or even GSM vs. CDMA. They just want a phone that works, they want it cheap, and they only want to deal with one company. The only way to do that is to have the carriers sell the phones.
If you buy the phone from the carrier, the carrier should support it. It would be very bad customer service for these carriers to sell the phones, then when something goes wrong say "not our problem". You have to support what you sell.
And I'm down with that, which is why I...
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It's just so much easier to blame the company who sold you the phone. Even if the carrier is responsible for providing customers with quality equipment it comes down to the manufacturer. Just about every carrier provides customers with warranties and even insurance so the customer is protected regardless.
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timslo said:
It's just so much easier to blame the company who sold you the phone. Even if the carrier is responsible for providing customers with quality equipment it comes down to the manufacturer.
That tiny paragraph alone is worthy of a billboard. Just blow it up and post it on major highways. And from my understanding this was a dealer post. Bravo. 😎 But you are right, where else but in the wireless industry can you go to service provider and DEMAND new equipment for little to no cost. Some even throw a fit when you mention taxes, shipping fees or a new service agreement.
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And not only are we responsible for the manufacturers, apparently we're responsible for the Post Office too! I just took a call from a customer who had an expensive phone delivered by USPS (first mistake!) and apparently they left it in an unsecured location and it got stolen. Now the customer thinks she shouldn't have to pay for the phone... 🙄 She was very indignant when I explained to her that she'll have to dispute with the postal people to have them settle for it... apparently it doesn't occur to people that we have NO control over a package once it leaves our warehouse. Sheesh... 😈
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This is a very real problem every day i deal with customers that come in and hiss and yell at me becuase...say for example motorola doesn't use t9 input and samsung does and they miss their samsung but i don't carry it. or the buttons on the motorola are closer together than their old nokia and they cant press the Numbers correctly.the problem is that customers don't differentiate between service provider and manufacturer. the best thing is when you ask a customer who their service is through and they say "nokia"...lol. anyways just wanted to share that.
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Rich Brome said:Aleq said:
That's because it costs $300-$400 to acquire each new customer, even they replace an old customer. Most of that is marketing; how much you think Verizon is paying Trump to be in their commercials right now?
Actually we found out today that we didn't have to pay Donald Trump to do it. He offered to do it so he can promote his show.
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That thought crossed my mind, but I pegged Trump as the greedy type. I guess I should watch The Apprentice more often... 😉
Anyway, that makes sense, but Verizon still spends millions on TV and full-page newspaper ads. It's insane the amount of advertising the carriers do...
Anyway, that makes sense, but Verizon still spends millions on TV and full-page newspaper ads. It's insane the amount of advertising the carriers do...
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Preach on brother! I mean, sure advertising is necessary, but it really is insane how much they put out for it. Can you imagine how cheap the rate plans would be and how extensive coverage would be if they weren't diverting millions into ad companies? I sincerely doubt Catherine Zeta-J does those ads for the love of TMobile and as for VZW with there endless "Can you hear me now?" series... 🙄
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and mcdonalds would be cheaper and beer would be cheaper and cars would be cheaper.....
that advertising comment was so stupid....
who doesn't advertise???
that advertising comment was so stupid....
who doesn't advertise???
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Just because "everybody does it" doesn't automatically make something the right or smart thing to do. And, whether you realize it or not, there are ways to advertise that cost less than expensively produced, overaired tv spots. It is possible to have advertising that is reasonably priced as well as being effective. Oh, and avoid calling something stupid just because YOU don't understand it. Try to keep in mind that when you point a finger, three more are pointing back at you... 🙄
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Well advertising doesn't HAVE to cost a fortune. Just look at m&m's. For a while their commercials featured your average joe describing or re-enacting their favorite spot. Virgin mobile doesn't really have to put much effort into their spots. Naked people holding a phone with no contract. There are two things that consumers remember. No clothes and no contracts. 😳
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Yes, but many would say it's excessive in this particular industry.
Let's compare to the auto industry, which is also known for heavy advertising:
First, the cost of what's being sold:
$450/month (average car payment) for a car, versus $45/month for phone service.
Car makers spend roughly $600 on advertising per car sold. Cell phone companies spend roughly $350 per new customer. 😳 That's insane; it's way out of proportion considering the cost of the product.
I'll be the first to admit that, like all statistics, there's a dozen different ways to spin the numbers. But, it's hard to deny that the advertising budgets in this industry are unusually high compared to just about any other industry.
Let's compare to the auto industry, which is also known for heavy advertising:
First, the cost of what's being sold:
$450/month (average car payment) for a car, versus $45/month for phone service.
Car makers spend roughly $600 on advertising per car sold. Cell phone companies spend roughly $350 per new customer. 😳 That's insane; it's way out of proportion considering the cost of the product.
I'll be the first to admit that, like all statistics, there's a dozen different ways to spin the numbers. But, it's hard to deny that the advertising budgets in this industry are unusually high compared to just about any other industry.
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i agree that the advertising is very high Rich. however i think it is because of the high competition in wireless that is not there in car sales. for example you have one company that owns 6 or 7 different " brands" of car. like GM owning:chevy,ponitiac,hummer and so on and so on. in the wireless industry you don't have that and the market is becoming saturated. so it is even harder to wrangle in those customers when everyones offering pretty much the same thing but in different words. for example t-mobiles unlimited family calling and verizons "in" calling are the same feature mobile to mobile calling but they market it different so they don't seem like one another. thats jut my humble take on that.
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I think the unlocking of phones is the next step to providing more choices for the customer and increasing competition between wireless carriers.
I think everyone here believes that the north american customers are spoiled by having subsidized phones, and that the rest of the world is much more practical.
I think it's a great sign that the american customer is one of the most demanding and unbending consumers, demanding free to very subsidized phones.
However this may turn out, that phone carriers will start to un-lock phones, or start to charge full price for phones, I think the powerful american consumers will tell the phone carriers how they feel with their wallets and purchases.
I think everyone here believes that the north american customers are spoiled by having subsidized phones, and that the rest of the world is much more practical.
I think it's a great sign that the american customer is one of the most demanding and unbending consumers, demanding free to very subsidized phones.
However this may turn out, that phone carriers will start to un-lock phones, or start to charge full price for phones, I think the powerful american consumers will tell the phone carriers how they feel with their wallets and purchases.
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I think it will be great for Customer Care, wireless is the only customer base that expects to be given equipment for free and wants the service provider to replace or fix when it doesn't work. Can't wait to say you bought the phone from "Bob's Wireless and Crack-house, have them fix it. Then the industry can focus on providing service benefits and value to customers for contracts instead of fulfilling equipment entitlement issues. I can't wait. 🤣
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