Sunday, March 20, 2005

Wireless operators hate business

Tom Yager, in InfoWorld, gives a fresh perspective on why businesses seem to be an afterthought in the wireless carriers plans. For the majority of this article, he identifies real issues that carriers need to address, and businesses need to consider. Then he makes some suggestions. Tom, stick with observation.

Here are some of Tom's suggestions:

"Purchase devices at full price instead of going for a contract. Even though it costs a little more, paying month-to-month gives you the freedom to switch service plans or operators at will. "

I'm gonna let you all in on a little secret. A free phone is cheaper than a full price phone. Now, before you think I don't get Tom's point, let me illustrate otherwise.

Free phone without contract = $50 to $100
Rebate without contract = zip, zilch, nada
Salesperson's commission without contract = Whatever he thinks your wallet will bear, because the carrier isn't going to give him one penney, let alone the $100 to $200 bucks they pay him if you sign the contract.

Honestly, you could pay more than a $200 premium for a phone without a contract. It will cost you $200, at most, to cancel your contract. If you want to pass on a contract, also be prepared to pass on evening and/or weekend minutes, hundreds of text messages, free accessories, or whatever differentiates that carrier from the other guys that month. Many of the features that the carriers advertise on their commercials, and in their newspaper ads are ongoing promotions that aren't available without a contract.

"ask that mobile-pro devices be delivered to you unlocked -- capable of moving from one operator to another"

Another reason to go with the contract is that the (Carrier's Name Here) phone you buy, only works with (Carrier's Name Here). Why pay full price for a phone so you can go to another carrier, and pay full price for their's. Tom thinks he has this one covered with this suggestion, but there are only 2 ways to unlock a cell phone, and only one of them is legal. The legal way is to sign a contract, and fulfill 3 months to a year of service before the carrier will let you unlock the phone. Some people think that if you pay "full price" for a cell phone, you have paid for the right to get it unlocked. Wronnnng! The carrier sold it to the dealer for less than it costs. The only way the carrier makes the money back on that phone is if you sign a contract. The illegal way is to find a web site that will sell you an unlock code. If this method sounds good to you, don't come crying to me when they start charging full price for the phones for everybody.

The fact of the matter is that full price phones would be the easiest, fairest, and best thing the carriers could do. Not many of you probably remember the days when your parents, or you, paid a couple bucks a month to "rent" your AT&T home phone. (If you're under 40, think about your cable box.) At some point many, many years ago, you were given the option to buy "your own phone." They were so expensive that only businesses purchased them. And then, only because they had special features that the carrier (AT&T) didn't have with theirs. Eventually prices came down and everyone purchased their own phone. Tom's observations suggest that businesses should lead the way in the new telecommunications ownership revolution. The problem is that the carriers are the only ones who sell BlackBerries, and .... Hey, you can buy an unlocked Treo from palmOne and you can buy unlocked Windows Mobile Pocket PC's from Mobile Planet. Maybe Tom's suggestion has some traction, but while you can buy these same devices for hundreds less from the carrier, Tom's suggestion is still a long distance from practical.

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