Wireless Telecoms: A Lightning Rod

     Friends, countrymen!  Lend me your eyes!  And read this thing I wrote!  A bit melodramatic I admit, but I really didn't have a better way to kick this off.  Today we're talking about people blaming cell phone companies for one few things that aren't their fault.  Let's get started!

     Wireless Telecoms (short for Wireless Telecommunications [professional speak for Cell Phone Companies]) are different from almost every other business out there.  I get the feeling from everyone I talk to that most people don't really notice how unusual it is.  Let me illustrate this: ask yourself, "What am I paying my cell phone company for?"  Here's the mind blowing part: if your answer was anything other than, "To provide signal to my cell phone," or had any other things thrown in, it was wrong (unless you actually have extra services on your bill, like cloud storage or music subscriptions).

     I can see (metaphorically) that some of you are confused.  Let's back things up to the inception of cell phones and cellular technology.  Many moons ago, cell networks were just starting to take off.  You could actually get a cell phone plan that wouldn't cost you over $100 dollars a month for a single line of voice only service plus $4.75 a call (That's where we started!  Look it up!).  The problem was, cellular devices, henceforth know as cell phones, cost a lot.  So if you're an owner of a newly formed cell company, you have a great service that will be fantastically useful, but there's a high investment cost to get started as a customer for something that the customer isn't sure they'll use yet.

     Then someone somewhere who was pretty good with numbers crunched some and came up with a great idea.  The Cell Provider could just give the customer a phone so they wouldn't have to put down a huge amount up front, and over the course of about two years, the company would make that back through service revenue!  Now, there is the worry that after they have the phone they would just leave, but if a financial penalty is written into the contract they sign to recoup the loss that worry is taken care of, too.  People started getting cell phones, started using them, and realized how amazing they were.

     It's at this point that European cell carriers began being heavily differentiated for the American ones; people knew what cell phones were and knew how useful they were, there was no need to risk money to incentivize demand.  The vast majority of phones purchased in Europe and Asia are bought at full retail with little to no discount, and correspondingly, no contract.  People will frequently buy or order phones directly from the manufacturer.  Meanwhile in America, continuing on the path they started on, someone had the brilliant marketing idea to offer that new line of service discount option to anyone that wasn't still working off their initial 2 year contract and call it a 2 year upgrade.  After that came the 1 year, not as deeply discounted upgrades, and most recently, the full price of the phone billed in installments plans.

     Over the years, this pricing structure has created a sort of bubble.  The wars between carriers, especially in the case of Big Red and Big Orange, has been one of device line ups, deals, customer service and coverage areas here in the States and it's put strange ideas in peoples heads.  Many are flabbergasted that the actual price for a new smartphone is usually $400 or more, for the cheap ones.  The price difference between what people usually pay and what an off contract device costs is vast.  People almost always buy devices through a carrier (and in fact there aren't a lot of options available if you don't want to do that), so they return to the carrier for support for that device.  When that device gets broken, they call and request that they get a new phone for a discount or free, and if they aren't eligible for the discounted price, and can't get an exception made, they take their business to another carrier.  All this being demanded from a company that is only being paid to provide a wireless connection.

     If you don't see what makes that so different and strange compared to every other industry, imagine if the state Departments of Transportation worked the same way.  If you agree to use Tennessee roads exclusively for the next two years and pay your taxes to them instead of another state, TDOT will sell you a Porsche for $12,500.  You agree and when something goes wrong with your Porsche after a few months, it never crosses your mind to call anyone other than TDOT to get it fixed.  When you wreck your Porsche, you ask the TDOT to replace it for just another $12.5k.  All of that despite the fact that what you're actually paying TDOT for is just the use of the road.

     I'm certainly not saying we need to feel bad for the cell giants currently dominating the industry.  In fact, I'm of the opinion that the top two could probably cut into their vast profits a bit and start offering unlimited data again, although maybe not for the $29.99 price it was originally.  I'm just a little irked when I see people on forums complaining that their Blackberry has poor battery life, or that their Android phone that was 2 years old when they bought it 18 months ago is running slow, and then blame the service provider for it.  The phones aren't manufactured by the carrier.  They aren't designed by the carrier.  When you get them swapped out by the carrier for a warranty issue, your cell carrier is just mailing them out to the manufacturer anyway.  There are many reasons to be mad at your cell provider, but the fact that you bought a crappy brand of phone that none the less retails for $500 and can't get it replaced free after 6 months, is one of the few things that you can't lay at their feet.