Sunday, November 25, 2007

The cellphone/carrier mess

It's holiday season and a the wireless carriers let loose a wave of commercials about fancy new phones, practically for free -if you are willing to sign a new two years contract. In other words, the carriers exclusively focus on customers of their competition, whose contract has expired. Of course, since all four major US carriers are playing the same game, it's obvious that the they win some customers on one side and they loose them on the other side.
This is a silly game with a negative impact for two groups of customers: first those who are still proudly carrying their old monochrome, brick-sized cellphone ("All I need it for is making phone calls"). They may save some money for hardware, but with their fixed monthly charge they cross-subsidize those who get the latest phones every year by switching the carrier. Second, those who like to buy a new gadget as often as they want, but cannot do that without the feeling to throw away money if they don't wait for the end of the contract.
This cries for regulation, as it's already done in other countries: carriers should be obliged to offer a bare-bones monthly rate without any hardware-subsidies priced in and hardware vendors should offer unlocked phones for the full price. That way customers can select a phone and the plan that they want, instead of having a drastically limited choice.

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