The Cellphone Rebellion of 2007? Naaah

Michael Gartenberg | November 12, 2007, 08:08 AM

Fascinating article in today's NY Times about the cellphone industry with the dubious title "Cellphone Straitjacket Is Inspiring a Rebellion" The lead sets the whole tone.

First come the grumblings, then the torches and pitchforks. Consumers have never been happy about their cellphone carriers and the services they provide - or refuse to provide. But they also have hardly the means to do anything, except switch from one carrier to the next. But a rebellion is brewing in the communications industry that is expected to pit wireless carriers, including AT&T and Verizon Wireless, against Silicon Valley powerhouses like Google.

Wow! A whole rebellion. Problem is, it's just not true and little of the article make sense making me wonder what the author was thinking and how her editor let this go to print. Now granted, carriers have issues and i've talked a lot in the past about their need to adapt in terms of business models, especially where media and entertainment are concerned. But that's a far cry from Consumers have never been happy about their cellphone carriers and the services they provide - or refuse to provide. That's because the statement isn't correct. In fact, in survey after survey we have done over the years, we can point to the fact that consumers are actually pretty happy with their phones and pretty happy with their choice of carriers. I'd point to a study in the article that has contradictory data, but of course, there is none cited.

As to the so called battle lines? Where are they? Apple (a silicon valley powerhouse) partnered with ATT to bring the iPhone to market. Google is working with T-Mobile and Sprint-Nextel. The notion that the phone is the same thing as the Internet is just silly. And by the way, my Internet access isn't magical or free, it comes from an entity much like a carrier who charges me a monthly fee, offers additional services I can subscribe to (or not).

Now the article doesn't go into depth on the issue of locked vs. unlocked phones but it's worth bringing up. You don't need to use a locked phone if you don't want to. Since I've been a GSM customer in 1996, I have never used a locked phone as a customer. In fact there's a small but growing market of folks who provide unlocked phones. There's a small catch. First, you need to use a service that is compatible with the small SIM cards that power the phones. In the US that means ATT or T-Mobile. Both Verizon and Sprint use technology that simply doesn't lend itself to being easily switched as they don't support the needed SIM technology. Second, you have to be willing to forgo a carrier subsidy. For many folks that's a deal breaker. If you don't mind paying hundreds of dollars for a phone, than there's no need to enter a contract with a carrier, you just buy and unlocked device. Most consumers like the idea of high end phones at little to no cost. Well, someone's got to pay for the cost of that phone and that's where the carriers step in, subsidizing the costs in order to get you to remain a customer for a longer period of time.

The carriers aren't perfect. There's a lot of room for improvement, especially in the areas that move beyond voice into data driven services for business and entertainment. But to suggest overall consumer unhappiness, well... I'm looking at the data but then again, there are some folks who never will let the facts get in the way of a good story.