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Top message:  market concentration ≠ consumer choice by WiWavelength   Sep 15, 2011, 1:09 PM

Replying to:  Re: market concentration ≠ consumer choice by despotic931   Sep 17, 2011, 12:49 PM

Re: market concentration ≠ consumer choice

by Slammer    Sep 17, 2011, 4:01 PM

---" I am well aware of what an oligopoly is, and believe that it is the consumers have driven the industry to that state."---

In many ways this makes sense. But not necessarily in this industry. Case in point is that many Tmobile subscribers are not very happy with this move. If they wanted AT&T, they would have switched already and not to mention, many just left AT&T. This is the advantage of consumer choice. Another case is the Verizon/Alltel merge. I have relatives and colleagues that would rather have a different choice. They simply miss the savings and service they had with Alltel. There are also those that suffered by having to be spun off to AT&T due to Verizon having to divest some assets.

As you said, price rising is in every in industry. Yes, It is not fully dependent on market consolidation but rather cost of living. So pricing will rise regardless. However, the point I must make in relevance to the market consolidation is this:

My job profession is a Field Service Representative for a company that services restaurant equipment. The example can be found here in two places.

1) We recently had to raise prices to stay competitive in terms of fostered high costs of fuel, medical, parts, tools etc. It has nothing to do with our services. Even though one of our competitors is larger than us, everyone including competition below us had to raise prices. We are concentrated to the point where it becomes specialized. The manufacturers control the pricing on parts we cannot obtain from other sources. So everything inbetween becomes involved due to this barrier. So prices do indeed climb.

2) This is where many choices keep things in check. My profession has allowed me to see many dining spots flourish or fail. Since there are so many places to eat, they can be distributed into categories. Cheap eats, casual dining, fine dining and so on. Most are deigned as such. There are many different places to establish vendor supplied products. The restaurants that charge more for a burger of same quality as their neighbor, ultimately fail unless they use ingenuity to attract customers, OR they keep their prices stable within reach.

The problem with the wireless industry, is that there is only one entity to commensurate services. Sort of like my manufacturer analogy. That is Spectrum. It is rare and not easily attainable by start up companies. MVNOs rely heavily on spectrum licensed by the largest carriers. This is where the argument gets heated on claims and our beloved market consolidation. The potential for only two carriers controlling the spectrum used for the industry, will render very little, to no choice in services. These two carriers become the sole providers and every carrier under them becomes dependent on what policies or pricing they command.

Example, if you want virgin mobile, it is still using spectrum from Sprint. So if Sprint needs to raise prices, so will virgin.

If private sector Verizon and AT&T control all the spectrum, who will control what they do? They don't care if you go to an MVNO to escape higher prices. They know they will be getting your money either way.

So to finalize this:

Even though we both agree that it is preferred that Tmobile stay in business(I denounced Sprint as a contender as well), we know it will move on under a different business. However, we need to keep a very strong controller of spectrum such as AT&T out of this merge. The value is placed in spectrum. The spectrum needs to remain segregated from the crosshairs of the two largest carriers or that manufacturer analogy I spoke of, will leave consumers vulnerable. It needs to go to someone else other than Verizon or AT&T. Do we want our cellphone bills acting like our oil and fuel bills? If someone sneezes in the middle east, I end up paying more to get to work. I don't want that with my phone.

John B.

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