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Posted by on July 5, 2008, 9:05 am
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> http://www.boston.com/bostonglobe/editorial_opinion/editorials/articl...
>
> GLOBE EDITORIAL
>
> iPhone's false bargain
>
> The Boston Globe
> June 22, 2008
[Moderator Snip]
The Globe carried a follow-up "letter to the editor" from the industry
group "CTIA - The Wireless Association" ( http://www.ctia.org )
stating the industry's side:
------------------------------------------------------
THE BOSTON SUNDAY GLOBE
June 29, 2008
Letters-to-the-Editor
The fruits of wireless competition
YOUR JUNE 22 editorial "iPhone's false bargain" aires worries that
"big companies will . . . keep monthly wireless rates high." In fact,
Americans enjoy some of the lowest wireless rates in the world. This
is because the American wireless industry is a model of competition,
and provides choice and affordability.
In the past 20 years, wireless has evolved from a corner-office luxury
to a cultural mainstay for more than 250 million subscribers. Users
can choose among more than 600 handsets from more than 30
manufacturers.
Moreover, the cost of wireless voice service - by far the most popular
use, available with and without a contract - is among the least
expensive in the developed world.
The contract model has promoted wireless adoption and helped Americans
access innovative services, while more than 40 million consumers have
been able to choose contract-free service. In addition, wireless
companies' open-network policies allow customers to use compatible
devices whether bought from the carrier or not.
As the marketplace evolves, products and services are being
introduced. Each seeks to undercut the others, or provide a unique
experience for the user. This competition is the hallmark of the
wireless industry.
STEVE LARGENT
President and CEO
CTIA - The Wireless Association
Washington
------------------------------------------------------
It's an interesting business and the wireless carriers have learned
something from the IXC "Long Distance wars" of the past decade:
whatever you do, don't let your service become an undifferentiated
commodity where all you can do is compete on price and race your
competitors to the bottom. By offering exclusive hardware locked to
their respective networks, the wireless carriers have found a way to
avoid the carnage experienced by the LD companies.
There is a certain irony here, because if you look at the advertising
platform of the major carriers, they stress their network (ATT: "More
bars in more places"; Verizon: "It's the network." etc.) but their
stores and web sites stress the specific phones on offer and provide
little or no information about which phones perform better on their
networks.
Meanwhile, the manufacturers of handsets may be competing on features
and appearance, but they remain captive to the wireless providers as
their major channel of distribution. (Imagine a manufacturer trying
to sell its phone to the consumer at a profit when phones from its
competitors are being offered for 1-cent by the wireless providers as
sign-up incentives -- especially when the providers will not give the
customer any lower rate, even if the customer buys his own phone.)
Just some random thoughts.
Regards,
Will
The Old Bear
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