U.S. Mobile Phone Carrier Practices Questioned

[SeaFox]

Agree. There's a good reason for the exclusivity here. apple needed a network to commit to allowing certain features, like visual voicemail.

Can you name any features besides Visual Voicemail that require "network upgrades". A single feature that most people could care less about is not a good reason for exclusivity. Also, you're wrong. Apple doesn't need anyone to "commit" to upgrades to allow the iPhone on them. It's simply a matter of those features not working. Google maps? It knows where you are by tower triangulation, same thing as 911 uses to attempt to locate you for the past 5 years (before more phones had GPS). Email? Lots of phones do IMAP email. Yahoo's Push Mail may be nothing more than IMAP with IDLE mode support. Even if it is something more, this company called RIM has been doing it for awhile, you might have heard of them. Really, where is this long list of features that make the iPhone experience worthwhile, and can't be easily duplicated by any network.

If apple just started selling its phone, why would any of the carriers make it work with its network any more than a basic data device?

Apple can release the iPhone unlocked and sell it on their own. Make the network changes and protocols free information, and let the "free market" do the rest. Customers will pressure their carrier to support the feature, carriers will upgrade to please customers or risk losing them to ones that do support the feature if its that important.

I'm sure Apple evaluated selling the phone without a network/carrier tie-in, and decided that to make it work right, they needed to work with one cell provider.

No, I think Apple got fooled in this case. Apple approached the carriers, and the carriers all probably said that if Apple didn't get a tie-in with a provider, their product would be doomed due to lack of public exposure. It was stupid. Apple has better brand recognition than most of the carriers themselves according to NPD, especially when Cingular can't decide what it wants its name to be.

They could certainly roll the product out in Europe, but again they want to make sure that vodaphone or t-mobile or whoever will provide adequate support. Only wait to ensure that is to grant exclusivity.

The monthly fees their cutomer's pay is the bread and butter for wireless carrier's balance sheets, not agreements with cell phone companies. Support would be demanded by customers, and if someone else offered it, people might go to them, as I said earlier.

Ah yes, but I can 'drive' my iphone anywhere there are wireless 'roads'.

As long as these roads are made by AT&T. That's like only being able to drive your car on roads certified by Goodyear. And then if you want to drive on a BFGoodrich road you have to call Goodyear and graciously ask permission to take the tires off your own car to put BFGoodrich ones on. They'll agree as long as you pay them $175.

Bottom line Apple will make more money long term than working just with AT&T then they would with everyone else, due to the revenue sharing they're getting on the service side of things.

One reason is that Apple struck a deal with AT&T to receive some of the monthly subscription fees. If Apple sold an unlocked phone that the customer could take to any carrier, then Apple wouldn't be able to tap the monthly subscription revenue stream.

Please site a source showing Apple is getting money on monthly service fees from customers with iPhones. This is pruely conjecture based on a rumor from awhile back as far as I've seen.

 

[heffeque]

And I gave you a full list of reasons why the US is absolutely nothing like any other country. The closest thing would be Russia or China geographically speaking and coincidentally enough neither of those countries show up on that list...

And what about Canada? And are you saying that it's easier for Bulgarians (4.7 less GDP PPP $ per cápita than the US) to deploy an HSDPA network that in the States? You've got to be kidding me.

To fix a problem first you have to admit you have one. To blame it almost exclusively on the geography is pretty blind IMO.

Even Bulgaria has a better HSDPA network than the US. Something is going REALLY wrong in the States and it has to be corrected.

 

[bigmc6000]

And what about Canada? And are you saying that it's easier for Bulgarians (4.7 less GDP PPP $ per cápita than the US) to deploy an HSDPA network that in the States? You've got to be kidding me.

To fix a problem first you have to admit you have one. To blame it almost exclusively on the geography is pretty blind IMO.

Even Bulgaria has a better HSDPA network than the US. Something is going REALLY wrong in the States and it has to be corrected.

Now you really really really have to be kidding me. You're comparing a country (Bulgaria) the size of, oh, Nevada to the entire US? I never said it was solely geographical. I said the US market doesn't dictate a requirement for 3G service everywhere...
The overwhelming majority of Americans don't give a crap about having 3G service on their phone - if they did we'd have it by now because, as many people on here have pointed out, the customers would have spoken. Most Americans just don't have the need or desire to pay extra to get broadband internet in their pocket...

If you consider not being a tethered to the internet every second of everyday a "problem" then ok, in your eyes, we've got a problem. But most Americans don't see it that way...

Oh and the Canada thing... check this site for how expansive that HSDPA network is...
http://www.shoprogers.com/store/wireless/coverage/info.asp

 

[AtHomeBoy_2000]

Verizon needs to do the CDMA EVDO to HSDPA upgrade. This kind of network changeover has successfully been done in South Korea and Australia.

but.... but.... that costs money and that means... less profits. NOOO!!!!!

 

[rob@robburns.co]

If you consider not being a tethered to the internet every second of everyday a "problem" then ok, in your eyes, we've got a problem. But most Americans don't see it that way...

Most Americans don't see it that way because most Americans see it as:

<HomerSimpsonVoice>We're number 1, we're number 1 </HomerSimpsonVoice>.

Most Americans don't know how we're being short-changed.

 

[bigmc6000]

Most Americans don't see it that way because most Americans see it as:

<HomerSimpsonVoice>We're number 1, we're number 1 </HomerSimpsonVoice>. Most Americans don't know how we're being short-changed.

Still missing the point - most Americans DON'T CARE! It's like, umm, Curling for example. Do some Americans really really care if the US if #1? Of course, do most? Umm, no, most don't even give a crap.

Ok, well maybe not Curling but it's probably closer to a soccer comparison. There's a fair number of soccer fans in the US but they are still a very small % and thus most Americans just don't care, win or lose, about the US soccer team...

 

[arn]

Please site a source showing Apple is getting money on monthly service fees from customers with iPhones. This is pruely conjecture based on a rumor from awhile back as far as I've seen.

You're not going to get anything definitive, but it seems pretty likely

http://gigaom.com/2007/05/07/att-iphone-is-key-for-mobile-rebranding/#comments

UBS also says that the “revenue share with Apple could be a more meaningful portion of monthly ARPU than we previously thought,” which would be a concern for AT&T if a lot of iPhone buyers are already existing customers.

https://www.macrumors.com/2007/01/29/verizon-rejected-iphone-deal-due-to-apples-terms/

According to the article, Apple wanted "a percentage of the monthly cellphone fees, say over how and where iPhones could be sold and control of the relationship with iPhone customers."

 

[EricNau]

See - there's that word again. "Right" I swear... Please, please, please point out to me where it's defined as your "right" to use that phone with any compatible network.

Would you care to tell me why I shouldn't be able to use my phone with any compatible network?

 

[heffeque]

You're comparing a country (Bulgaria) the size of, oh, Nevada to the entire US?

*Size and dispersion -> ( Canada ~ US ) -> Canada has a better HSDPA network

*Population density -> ( Australia <<< US ) -> Australia has barely 6.7 people per square mile vs 80 in the US and still Australia has a better HSDPA network

*Money -> ( Bulgaria <<< US ) -> Bulgaria has almost 5 times less money than the States and yet it has a better HSDPA network than the US

I'm not too sure I can think of any more clearer examples of why your excuses are so poor. What's wrong with the Canada vs US example? Can you explain it to me? I'm still confused about what is it that you still can't see.

If you consider not being a tethered to the internet every second of everyday a "problem" then ok, in your eyes, we've got a problem. But most Americans don't see it that way...

Ok, ok... I get it... people in the US don't want broadband anymore. I'd never think of it that way taking into consideration that there's a lot of people demanding better speeds. Must be a loud minority.

 

[rob@robburns.co]

You're not going to get anything definitive, but it seems pretty likely

http://gigaom.com/2007/05/07/att-iphone-is-key-for-mobile-rebranding/#comments


https://www.macrumors.com/2007/01/29/verizon-rejected-iphone-deal-due-to-apples-terms/

However, those are reports from the service providers that didn't get the deal. Apple may have come in with a laundry list of what they wanted, but likely didn't get everything. Then Verizon and others tout the most absurd requests to save face with their share-holders.

 

[bigmc6000]

Would you care to tell me why I shouldn't be able to use my phone with any compatible network?

'Cause you signed a contract. Too bad, so sad. This idea of "right" is entirely out of hand. I'm assuming you live in the US - it's no where in any gov't documents saying you have a 'right' to take your phone elsewhere.

Now, does that mean you shouldn't be able to? No, it kinda stinks, you're correct. However, that doesn't mean it's a "Right." Unless it's guaranteed to you in some official document you're still in privilege land...

 

[heffeque]

Oh and the Canada thing... check this site for how expansive that HSDPA network is...
http://www.shoprogers.com/store/wireless/coverage/info.asp

Hmm... seems that Canada is almost as bad as the US. My bad then. You're right on that one.

 

[EricNau]

'Cause you signed a contract. Too bad, so sad. This idea of "right" is entirely out of hand. I'm assuming you live in the US - it's no where in any gov't documents saying you have a 'right' to take your phone elsewhere.

Now, does that mean you shouldn't be able to? No, it kinda stinks, you're correct. However, that doesn't mean it's a "Right." Unless it's guaranteed to you in some official document you're still in privilege land...

Actually, it does. "Right" in the form it's being used here, is defined by the Oxford English Dictionary as, "a moral or legal entitlement to have or obtain something or to act in a certain way."

As you already pointed out, morally I should be able to use my phone with any technically compatible network I choose.

Really, we're in agreement here.

 

[bigmc6000]

*Size and dispersion -> ( Canada ~ US ) -> Canada has a better HSDPA network

*Population density -> ( Australia <<< US ) -> Australia has barely 6.7 people per square mile vs 80 in the US and still Australia has a better HSDPA network

*Money -> ( Bulgaria <<< US ) -> Bulgaria has almost 5 times less money than the States and yet it has a better HSDPA network than the US

I'm not too sure I can think of any more clearer examples of why your excuses are so poor. What's wrong with the Canada vs US example? Can you explain it to me? I'm still confused about what is it that you still can't see.



Ok, ok... I get it... people in the US don't want broadband anymore. I'd never think of it that way taking into consideration that there's a lot of people demanding better speeds. Must be a loud minority.

See the link to Rogers HSDPA coverage - it's 1 freaking city!!! 1! Wow, that's amazing, that's such an awesome network. We like broadband at home - you're trying to take my point out of context in hopes of making a point - not gonna work... Stick to talking about phones, and yes, whiny rich people are a very loud minority, you surely know that.

Upgrading all those towers to HSDPA costs money and, I'm assuming you're aware of this, the HSDPA networks in most all of those countries are multinational corporations so comparing the money of 1 country to another is pretty pointless.

As for Australia - the truth, and the lies, are in the numbers. The US has chunks the size of countries where the average population density is 3 at best... Those massive huge cities throw the whole thing off kilter - ya know, the whole average vs median thing... That's even very evident in Australia where 81% of the population live in/around Adelaide.

The US has more people in 3G coverage areas than the entire population of Australia - just to point that out.

 

[heffeque]

See the link to Rogers HSDPA coverage - it's 1 freaking city!!! 1!

Here ;-)

Upgrading all those towers to HSDPA costs money and, I'm assuming you're aware of this, the HSDPA networks in most all of those countries are multinational corporations so comparing the money of 1 country to another is pretty pointless.

Yes, Bulgarians get the HSDPA towers for free ;-)

As for Australia - the truth, and the lies, are in the numbers. The US has chunks the size of countries where the average population density is 3 at best... Those massive huge cities throw the whole thing off kilter - ya know, the whole average vs median thing... That's even very evident in Australia where 81% of the population live in/around Adelaide.

The US doesn't even have high speed wireless access on big cities so there's no point on expecting it on some Texas desert either.

The US has more people in 3G coverage areas than the entire population of Australia - just to point that out.

How many? Just out of curiosity.

 

[mccldwll]

However, those are reports from the service providers that didn't get the deal. Apple may have come in with a laundry list of what they wanted, but likely didn't get everything. Then Verizon and others tout the most absurd requests to save face with their share-holders.

Right. Everyone, especially analysts from various firms trying to spin the story to their advantage, speaks about the terms "according to reliable sources", "insiders" etc., etc.. They don't know. It's not public. Total bulls**t. Obviously it was a complicated deal involving AT&T upgrades, and Apple's continuing duty to support/upgrade it. Revenue sharing, IF ANY, could simply be payment for its support/upgrade obligation, which also benefits AT&T. Bottom line is those who actually know the terms ain't talkin'.

 

[bigmc6000]

Here ;-)


Yes, Bulgarians get the HSDPA towers for free ;-)


The US doesn't even have high speed wireless access on big cities so there's no point on expecting it on some Texas desert either.

How many? Just out of curiosity.

I'm not saying Bulgarians got HSDPA for free but they also are near a whole continent that loves their 3G - so they had 3G envy

I'm leaving shortly so I haven't had a shot to add up these cities or find a freakin number - worthless google...
http://www.wireless.att.com/coverageviewer/

but if you click on "select cities" those numbers add up really really quick...

 

[ccrandall77]

And...

Austria
Bahrain
Belgium
Bulgaria
Canada
Croatia
Denmark
Estonia
Egypt
Finland
France
Germany
Greece
Hong Kong
Hungary
Iceland
Ireland
Israel
Italy
Japan
Kuwait
Lithuania
Malaysia
Malta
Netherlands
New Zealand
Portugal
Romania
Saudi Arabia
Singapore
Slovakia
Slovenia
South Africa
Spain
Sweden
Switzerland
and the United Kingdom

the United States is one of the few countries in the world that doesn't have over 1 Mbps HDSPA speeds. Most countries are currently giving 3.6 Mbps speeds, some are giving 1.8 Mbps speeds and others 7.2 Mbps and more. The United States is giving 400/700 Kbps speeds with 1 Mbps peaks. Impressive, LOL!

And yes, it's some US bashing, but hey! These companies need a smack in the face for letting the US get so back behind so many countries. Darn it, even Bulgaria has better speeds than the US (sigh).

Uh, all those countries had CDMA EVDO networks? I was pretty positive that most, if not all, countries on that list have been nearly 100% on GSM for the past several years... so if they had CDMA, it was in the pre-EVDO days. I could be wrong here, but assuming I'm not, perhaps that explains why HSDPA is not that prevalent in the US. That's an awful lot of CDMA-EVDO infrastructure that works just fine to replace. It probably doesn't make any sense to spend the money. In a smaller country such as S. Korea and Australia, it might not be as cost prohibitive.

Besides, WiMax is the future... why switch to GSM-HSDPA?? I'm glad Sprint figured this out and I'm anxiously awaiting them to implement it in my area.

 

[heffeque]

Uh, all those countries had CDMA EVDO networks? I was pretty positive that most, if not all, countries on that list have been nearly 100% on GSM for the past several years...

GPRS several years ago, UMTS some years ago, and now HDSPA for a year or so. All GSM, yes.

 

[sanford]

greenwrangler, thanks. That was a heartening response to a post I almost deleted before I posted it because I didn't want to take the abuse I expected directly forthcoming.

By mainstream economic theory (you don't have to look to Nash) these monopolistic industries, these public goods are rightly issues of public policy. They do not belong in the hands of private corporations. Some economists would say the non-rival in consumption property means they should be free for the most efficient allocation of resources (like most of the interstate highway system). However, even the price of admission is an issue of public policy. The question of how much profit you want the monopolist who runs it to make is an issue of public policy (personally I'm in favor of $0).

And rob, too. Thanks for the additional insights. I think you're right: you and I likely do agree on most points. I understand what you're getting at, that all flavors of economic systems are essentially just variations on capitalism -- that is, making things or performing services, and selling or bartering them. But I would still make some of the traditional distinctions, like communism requiring ownership of the means of production by the workers, whereas capitalism in most scenarios this is not the case. I also still stand by my declaration that any of these economic systems left mostly unchecked will eventually self-destruct, including the kind of capitalism we practice in the States.

I've got two little boys going wild before bedtime right now, so I don't really have time to give your post the discussion it deserves. But if you're saying that the mobile phone carrier network -- the towers, the voice and data service, etc. -- should be run by a single socialized entity -- essentially, the government -- or an assigned private party that is self-supporting only and makes no profit, rather than by a few or many competing private for-profit corporations, I wholeheartedly agree. Of course in the States we already do this with some public goods, like fire and police departments, the free public education system, etc., but for some reason the concept of telecommunications as a public good doesn't get through to majority of the American public, so we pay through the nose for the warm, cozy feeling of a "free market" with no benefits and often problems for the customer, when we'd pay about the same for the same services under a public-good or natural monopoly plan -- provided we didn't let a largely unmonitored, unregulated for-profit corporation run it. I get you there, too.

And if by asking me to stop repeating the dogma, you're asking me to quit pretending even under a "fairer" system with strict consumer-friendly regulations and proper enforcement of these regulations, services like mobile phone networks belong in the hands of for-profit private corporations because they do not belong in these hands, I agree on that point as well. But I hedged in my previous post. I don't think that I would typically hedge as I'm opposed to lily gilding and quite usually rather boldly state my mind, but I've taken a serious beating over the last ten days for my concerns over the impropriety of the way in which Apple sells the iPhone and AT&T provides service for it -- these particular issues of contracts, no subsidies, termination fees, etc., should be familiar to most people following the issue by now. I've been slighted, maligned, called various names, profane and merely condescending, for even daring to question the iPhone and its service arrangement. So, I hedged because I'm weary of being "yelled at" this week.

As an aside, I pointed to Nash chiefly because, in his signature economic theory, I find delightful beauty in the notion that in a system long believed to greatly favor the highly aggressive, most selfish participant it turned up that the greatest benefit to the system would actually be compromise between human beings.

Sorry I don't have time at the moment to address all your comments in detail. Thanks for the considered response.

 

[ccrandall77]

GPRS several years ago, UMTS some years ago, and now HDSPA for a year or so. All GSM, yes.

OK, then I'm confused. You quoted a previous poster who was talking about S. Korea and Australia switching from CDMA-EVDO to HSDPA and then listed all those other countries which I guess did not make that conversion.

I would agree with bigmc6000. It is most likely not cost effective for Verizon, Sprint/Nextel, etc. to convert their infrastructure. That's a lot of infrastructure covering an area roughly equivalent to all of Europe and serving over +80-90million customers to switch over... and they would probably need to maintain their existing CDMA-EVDO infrastructure for a time to allow people to continue to use their current equipment (like Cingular did with their TDMA and GSM networks). That's different than the situation in Europe where the countries have been able to evolve from GPRS to EDGE to UTMS to HSDPA.

And IMO most people here in the US really don't care about high-speed data (not me, but I'm a geek). If it was available that would be great, but there aren't legions of people beating down the doors of the cell carriers asking for high-speed 3.5G data service.

As I mentioned earlier, I think WiMax is a better path to go down than HSDPA and I'm hoping the cell carriers here all adopt it. As I understand, it should be able to handle both the data and voice services and I would think would eventually lead to a VoIP-style cell service. I'm just speculating here on the limited information I know about WiMax.

 

[applehero]

...

Right or wrong, you are using a poor analogy. The Interstate highway system is a government owned and maintained system funded by our taxes, the telecommunications network, at least 90% anyway, was built by AT&T and funded by investments and customer revenues.

Had the government not stepped in and broke up AT&T, your argument would not exist. While the telecommunications industry, as it stands today, may be considered a natural monopoly, it is only that way because the government stepped in and created this 'false competition.' I don't consider it true competition because AT&T was forced to lease network at a discounted rate and CLEC's were forced to offer service at a discounted rate while AT&T was not allowed to offer its customers discounts of any kind and were forced to take priority over the CLEC's customers over their own. That sure doesn't sound like competition to me.

Even to this day, with AT&T acquiring former RBOC's to, as some say, 're-assemble' the old AT&T, the government is still regulating the operational aspects of their day to day business. They may share the same stock, but they also are forced to continue to operate independently. You don't have that same interference with Verizon and Qwest, why do you think that is...it's because everyone knows if AT&T had the landline presence is the Northeast and the Rockies that customers would slowly start migrating back to AT&T and put Verizon and Qwest out of business. Telecommunications as an industry is not a natural monopoly, but AT&T is. Wherever they have a presence, they dominate the market by the consumers choice.

Granted, we are only talking about 1 band here, and it's a new band for everyone, but that's how it all starts. I think within 10 years, we'll being hearing the monopoly talk starting again.

 

[applehero]

*Size and dispersion -> ( Canada ~ US ) -> Canada has a better HSDPA network

*Population density -> ( Australia <<< US ) -> Australia has barely 6.7 people per square mile vs 80 in the US and still Australia has a better HSDPA network

*Money -> ( Bulgaria <<< US ) -> Bulgaria has almost 5 times less money than the States and yet it has a better HSDPA network than the US

I am curious to know who owns and is building these networks, how they are paid for, and how many different companies compete over the territories. Do these other countries have entities like the FCC that tend to work against corporations instead of with them?

Unless I'm mistaken, AT&T is the only company building HSDPA is the US. I'm assuming T-Mobile will have the ability as well since they use AT&T's network (even though they have their own towers, still AT&T's network.) The US may have more money and more people per square mile, the geographical differences are way beyond Australia and Bulgaria. More land to cover, longer waits for technology upgrades.

 

[applehero]

...But if you're saying that the mobile phone carrier network -- the towers, the voice and data service, etc. -- should be run by a single socialized entity -- essentially, the government -- or an assigned private party that is self-supporting only and makes no profit, rather than by a few or many competing private for-profit corporations, I wholeheartedly agree....

 

[KristieMac]

You say you 'd never switch back to AT&T because, and tell me if I am wrong, you were ired by either the lack of "network quality, reliability or poor customer service".

How does "unlimited" versus "limited" phones improve that situation?

I would love to know the company that has 100% network quality, assures 100% reliability and gives consumers 100% customer service? Because anything short of those ideals, makes the carrier, well, just another carrier "with issues"! It's a paradigm that will never happen. Somewhere, someone is going to gripe about something with their cell phone provider and phones wouldn't have a dang thing to do with it - locked or unlocked. Sorry!

Maybe we aren't talking about the same thing. I am talking about being able to take the phone of my choice, iPhone, to the network of my choice, Verizon.

I don't like AT&T. I don't like TMobile. I want to stay with Verizon and use an iPhone. Verizon has not been perfect, but in my area, it is hands down the best cell carrier I have found. Even if I couldn't use every feature on the phone, I'd still be happier being able to use limited features with a carrier that works for me.