Wireless: Give People What They Want

I hope some Canadian wireless executives—whether they be inside the big three incumbants, or the new owners of wireless spectrum—read this New York Times story, which looks at how U.S. wireless carriers are starting to open up their mobile networks. In Canada, the wireless industry continues to nickel and dime, and generally confuse its customers, whether they do it with baffling data plans for the iPhone (disclosure: Rogers owns this website) or by charging people for incoming text messages. It’s that attitude, more than just high prices, that stifles the adoption of wireless data in this country, and limits innovation in an industry going beserk everywhere else in the world.

What really perplexes me, though, is that Rogers, Bell and Telus also offer high-speed Internet services, and to my mind, that is the single best example of what happens if you give people open access to data—they get used to it, and most importantly, they will pay almost anything to keep a high level of service. I suspect  I’m not alone in that I pay a premium for the certainty of all-I-can-surf Internet access, even if I’m buying the top tier service when a lower tier might suffice for my surfing habits. Why? Because it’s simple, the Internet is that important to my family, and I don’t have to second guess what my actions online will cost me a month hence. Same goes with my wireless voice plan, for that matter. But not for wireless data—not yet, because I haven’t discovered the applications.

As the NYT story notes about the pull of wireless apps:

"Applications spur the use of higher-priced wireless data plans and the purchase of more expensive smartphones. “What is most important for us is to have a customer sign up for a plan,” said Ralph de la Vega, who is in charge of AT&T’s wireless unit. “We think we can have multiple ways to make money.”

This is a matter of consumer trust: if a customer doesn’t really know how much opening up the mobile browser on her phone will ultimately cost, or if she’ll be able to make it work, she’ll just never do it. No one has any idea how many KB are in a web page, nor would they bother to count them, and average people—not the early adopters who reflexively throw money at this kind of stuff—will never get around to experimenting. They don’t want to make some mistake and have it end up costing them. So they freeze, with their thumb hovering over the keypad, and then just put the phone away. I’ve certainly done that many times.

Some of the blame rests on handset makers, because they haven’t made it easy. No one wants to end up paying extra money to their carrier because they couldn’t figure out what buttons to press and went to the wrong site. But that’s changing: the iPhone certainly makes it simple and fun, and that’s why 25 million applications were downloaded from Apple’s App Store in its first 10 days.

It’s important to note, of course, that in the U.S., the price is right for using data on the iPhone. Canadian carriers can do a much better job creating a simple, trustful experience for their customers to discover wireless data services and applications. And once Canadians are hooked, they will pay a premium, even if all they do is check the weather on their phone while they’re already standing outside.

One more thought: Locking customers into 3-year plans doesn’t encourage them to upgrade to more data-friendly phones, nor do all the extra charges that come with device upgrades. Maybe the new carriers will spur some innovative approaches.

Comments

[Murphy Mac:]

One of the better Seeking Alpha articles I've read.

Canada is ruining the iPhone experience. How can rogers be THAT short-sighted?
I agree with another point, the USA and Canada need to do away with incoming text charges. The way we've fallen behind the rest of the world on mobile device use is going to come back - and bite us.

2008 Aug 06 07:12 AM

[mollytjm:]

at & t better do something to make their pricing easier and more fair all around because it's just a matter of time before the exclusive deal apple has with them, ends. when that happens, everyone on at & t, who wants to upgrade their iphone, will switch to some other company in order to get it cheaper. this is the time for AT & T to build some brand loyalty. i hope they wake up and figure that out.

2008 Aug 06 10:57 AM

[Murphy Mac:]

I don't expect AT&T to figure much out. The behemoth carriers don't seemed interested in moves that cultivate loyalty. They only seem to respond to force.
Verizon cripples their phones without prejudice. Rogers, I believe, is charging extra for Caller ID! Voice prompts and features in voicemail are abysmal. It took Apple's first phone to actually wake these people up - and all they're doing is putting a slightly new spin on their old playbook. Monopolies at work.

2008 Aug 06 11:43 AM

[Sensorhead:]

Thanks Larry, for this article. Not enough can be said about this topic. Indeed Rogers and Bell should simplify and get rid of the three year lock in contract. When I recent moved my cellphone number from Bell to Rogers, I got a bill from Bell Mobility for 30 days service not received. This after being a loyal Bell customer for 10 years without a contract. This kind of narrow money only focus will bring both Bell and perhaps Rogers a future that is very uncertain and bumpy. The Lord will always reward those who trust Him and not money. To those who trust money, uncertainly is their lot in life.

2008 Aug 06 02:08 PM