Comment of the Week

The comment of the week this week comes from Charlie Schick, who had a nice response to my little rant about handset subsidies and how they affect service from carriers:

“handset subsidies were removed in finland and italy. in finland, there is still no stopping the growth of handset purchases. in italy, the sales of handsets dipped when the subsidies were removed, but then started to climb and return to normal once folks were accustomed to full priced phones.

the problems with subsidies (and i am not whining as a manufacturer) is that it removes any value from the handset, such that folks couldn’t give a damn what phone they have, so long as it’s free or cheap. in this way a 6680 ends up on par with a basic 33nn phone.

also, in the us, you have all these buckets of minutes you need to use up every month, extremely long contracts, high termination fees, and user paying for incoming and outgoing calls. all this removes any incentive for the operator to improve service or retain customers – the contract and all guarantees that the oprator makes money whether the service is krappy or not.

real competition would be to have no fixed contract, calling party pays, and number portability without hefty termination fees – then the operators would have to compete for customers and would have to provide great services.

it is no coincidence that finland is mobile phone heaven – the competition here has been fierce: at least 4 operators duke it out for a few million users.

wake up usa – let’s have some real competition for customers.”

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