Serious reply to CTIA Steve Largent - he's cruisin' for a bruisin'

Thank you Steve Largent President and CEO of he CTIA (Cellular Telecoms Industry Association of the USA)who responded with a factual and detailed reply to my rant about the state of the US wireless industry. I immediately updated my rant to indicate that there is a formal reply at the CTIA blog by Steve and that I would be addressing his points in their entirity here at this blog shortly. So now we have a real debate..  Cool.

CTIA IS VERY LEGIT

So lets be very clear, the CTIA is indeed the only Industry Association for the US wireless carriers, they are very influential, they host among other things the biggest telecoms event of the North American continent (one of the biggest in the world) and the CTIA is the official representative of the US industry to the US national bodies like the FCC as well as to international bodies such as the ITU. The CTIA releases regular statistics on the industry that I often quote. They are totally an above board, very serious and facts based organization and I have the utmost respect of the CTIA.

It also is true, that the CTIA is the lobbyist arm of the US wireless telecoms industry, so Steve Largent is also the 'mouthpiece' on behalf of the various carriers. It is his job to defend their industry, even in bad times (like my blog) and Steve did a brave job in his response.

Now, we do know that in 'debate rules' if you do not respond to an argument at all - you 'grant' the argument to the other side. If Steve Largent, the CEO and President of the CTIA, in the official CTIA response to my blog, is not able to give any valid response to something I claim - he is admitting to it. And in many cases, that is because it is of course true. For example my point, that the US industry still charges its consumers for in-country roaming - is a fact, but not just a fact, it is something the CTIA regularly reports in its own statistics.

MY 20 POINTS

So, before we go to Steve's response, lets quickly summarize my 20 main points where I argued the US industry was outdated and that most of the world had moved beyond these, or that these points were indicative of unacceptably bad service given to US consumers. I argued that

1 - the receiving party also pays for incoming calls
2 - American carriers have on average only 43 phone models to offer consumers
3 - national roaming is still used in the USA
4 - SMS messaging has unacceptable delays, even 48 hour delays
5 - US carriers charge for incoming SMS messages
6 - US lags in SMS adoption
7 - American phones are locked to the carrier
8 - CDMA carriers don't even offer a SIM card
9 - American consumers (fully paid up customers) can be fired for complaining too much
10 - American consumers may be threatened by VP level execs if they complain twice to the CEO
11 - American networks have horrid network quality
12 - WiMax is not 4G
13 - US carriers have abandoned their international empires and gifted these to foregners
14 - US consumers pay highest wireless charges of any country
15 - American carriers cripple phones
16 - American carriers have the worst customer service
17 - Americans are not offered the world's best phones by the carriers
18 - US carrirers didn't bother to deploy video calling (inward facing cameras and 3G)
19 - US carriers are greedy with 50:50 revenue sharing deals, where Apple's 70:30 deal seems good
20 - The US carriers will not discount the monthly fee if the consumer brings their own phone, forcing same hideous fee as with subsidised phones

That was my laundry list of 20 complaints about the wireless carriers. Steve did not respond to most of them.

STEVE GRANTS ME ONE OF MY 20

But on one point, Steve granted me it is true - point number 6 - that Americans lag the rest of the world in adopting SMS text messaging. We don't need to argue that point. Good.

TOMI AGREES WITH 5 ARGUMENTS STEVE MAKES
 
Steve gave us about 18 responses (more or less, some could be considered variants of the same reply). So lets find first, where Steve made statements that I can agree with him.

"American consumers like to talk on the phone" - fine, I have no problem with this. It doesn't in any way address any of the points I made. Is an irrelevant fact.

The economic impact of the wireless industry, it generates jobs, etc. That is also totally irrelevant. It does not in any way address any of my arguments. So does the Mafia, generates jobs..  So do sweat jobs with child labor in some countries. Just because you generate jobs or provide economic benefits is not in any way relevant, to the point that the US cellular industry is offering horribly bad service to Americans. But I am happy to agree with you Steve, yes there are nice economic impacts of the US wireless industry to the USA. I am sure you would not in any way try to argue that it is not true in India or Nigeria or Brazil or Canada or Russia or France or Japan or Sweden or Australia. The wireless industry has good economic impacts to all countries. Every single one of them, and on a GDP basis, in most countries the wireless industry provides proportionally a bigger impact than it does in the USA, so even on this measure, the USA actually lags, per capita. (But lets not argue that).

"78% of Americans have access to 5 carriers" - first, that is obviously not 100%. Go to the UK, where essentially 100% of the population has access to 5 carriers. Here in Hong Kong we have all 100% of us, access to 6 carriers. But 5 lousy carriers is still lousy service. The number does not help you Steve, I can totally grant you this argument. So 5 of the world's most customer-unfriendly carriers exist in the USA, whoop-te-doo. I can totally agree with you. It in no way addresses any of my 20 complaints. You can have your 5 carriers haha.

"20% of Americans have prepaid subscriptions" - yeah, is this 'good' ? when the world average is 67%? Europe is over 50%? But yeah, it is still irrelevant, it does not address any of my points. I can safely agree with you on this Steve, yes one in five has a prepaid account. So what? Its still the worst networks and cruel customer practises, even if you have a prepaid account.

STEVE MAKES CLAIMS THAT ARE NOT TRUE

There are several more arguments Steve gives us, which actually are not true. These don't really address my points, but they are not true. He is misleading you in his blog. Lets take very specific issues.

THE 92% NUMBER IS NOT FROM THE FCC WIRELESS REPORT

Steve says "FCC’s report on the wireless industry, I hope you also read their consumer survey  which found that, “92 percent of cell phone users are very or somewhat satisfied with their cell phone service overall.” 

Ah, Steve Steve Steve. You know fully well, that is a misprint. Because in the FCC Report which I was referring to - you know this Steve, not this 3 page blurb about a BROADBAND study, I was of course referring to the "FCC 14th Report, May 20 2010", which identifies itself also as the "Mobile Wireless Competition Report". My pdf version runs 308 pages, I am not sure if that is the official page count as there may be some formating issues, but you know fully well which report this is. And in THIS report about the Wireless competition - the FCC clearly states, quoting the GAO study - that only 84% of US consumers are somewhat or very satisfied with their wireless service. Not 92%, Steve, you know this. You picked deliberately an obscure Broadband study where there is a misprint. You know the FCC report quotes the GAO (General Accounting Office for those who are not familiar with US government organizations) report - which specifically points out that 10 percent of US consumers were either very unsatisfied or somewhat unsatisfied with their wireless carriers and service. Steve Steve Steve, lets at least agree to play fair. With accurate numbers, ok? You knew fully well which report I was talking about. I was NOT talking about a broadband report by the FCC.

But whether its 10% unsatisfied or 8% unsatisfied, note, Steve Largent, the CEO and President of the CTIA, fully admits that at least one in 12 Americans is unhappy with their wireless service. And this is one of his 'positive arguments' trying to refute me? He fully admits that at least 1 in 12 is unhappy. I point out his facts are wrong, its 1 in 10, but even Steve grants me there is widespread dissatisfaction among US consumers!

US IS NOT INNOVATIVE AT 100,000 APPS IN 2009

That point was easy to establish. The next factual errors in Steve's argument are a bit more difficult to prove, but lets try. Steve says the US industry is innovative because there were 100,000 apps at the end of 2009 and today 240,000 apps. Is this so? The US wireless carriers are somehow 'innovative' because Apple has bypassed them - and offered consumer side-loaded apps so they can enjoy services that the carriers would not bother to give them directly (or more to the point, made it prohibitively expensive to do). Lets see how "innovative" that is.

In Japan, on just one carrier, NTT DoCoMo, there are today over a million content partners, application and service providers. When did they pass that 100,000 level? in 2004! You think Steve Largent that this is a sign of innovation in America in 2009? You are literally 5 years behind Japan - a country only a third the size of the USA in population. Shame on you! But I know the app store argument is fun to make today, eh? So you admit that the carriers can't do this level of creativity, it takes the outsider - like Apple - to do it. Thats exactly what I argued. So, one, I defeat your argument that the USA is 'innovative' because of the Apple App Store - but you then admit that the 100,000 in December 2009 and most of the 240,000 today (Apple having 225,000) is because of Apple who could not deploy these on the carrier systems, and had to develop its own app store. You are helping me prove my point that the carriers in the USA are dinosaurs, Steve.

US IS NOT WORLD'S BIGGEST MOBILE INTERNET NATION (ANYMORE)

Then you claim that US has the world's largest number of mobile internet users. Yeah, that sounded good and it was true until recently. But are you suggesting Steve that you somehow 'missed' the announcement from the Chinese regulator this Aprili that they now have 180 million mobile users of the internet? Or are you going to thrill me with a new CTIA number that today 63% of American cellphone subscribers are surfing the internet on their phones perhaps, haha. No, I didn't think so.

Obviously that is a bad metric in any case. The bigger the country, the bigger the aggregate number. The relevant number is 'per capita' which allows countries of different size populations to be compared fairly - and you know this Steve. You can't bully us simply because the USA has 5 times the population of the UK or indeed 60 times the population of Finland. To make a fair comparison, we have to do per-capita comparisons. So what IS your number of mobile internet users in the USA? You didn't give us the number, and the GigaOm page you linked to had our friend Chetan Sharma's numbers from 2009, but that was only for mobile data revenues, not for mobile internet users. So let me go try to find a 'fair' number, eh? That FCC Report comes handy again. They tell us that 27.5% of US consumers use the mobile internet today (or very specifically, they say use 'browser services'. I trust you won't dispute this official US government number, as according to the same report the CTIA does not currently track the mobile internet usage number itself (I wonder why, haha)

And yes, you claim US leadership in mobile internet use, when 27.5% of US cellphone users actually use browser based services ie the 'mobile internet'. Lets compare a bit around the world. In the UK, the number was 62% of all cellphone subscribers (says Aenas 2009). A bit better than the USA, eh? In Sweden, try 59% - but in 2007! (said Mobile Life 2007 survey). And in South Korea how about 48%... in 2005! (NIDA ie South Korean National Internet Development Agency 2005). And yes, how about Japan? Japan passed your 27.5% level - in fact passed 30% level of mobile internet use in 2003 (Sources NTT DoCoMo, KDDI, J-Phone 2003). What was it of 'US leadership' in mobile internet use? But regardless, this is a moot point. It in no way refutes anything I have said. Yes, a little over one quarter of Americans surf the web on their cellphones, big deal. They are having a lousy experience doing it and you know it. I can totally grant you this argument - with the proviso that even on this point that you bring up, the USA is woefully behind the leading countries - SIX years behind Japan, come on.

CLASH OF ACTUAL ARGUMENTS I MADE

Now, lets move to the actual arguments you make in response to mine. Now we get into actual arguments with Steve and my original blog posting.

ON MY ARGUMENT 2, US CARRIERS ONLY OFFER CHOICE OF 43 PHONE MODELS

The first of my issues that you take on is my item number 2, that US carriers are offering lousy service as they on average only offer 43 phone models to the consumers. You do not refute this point specifically, what the US carriers offer in their stores, you reply with an overall statement that there are 630 phone models by 32 manufacturers. That is not really relevant. I know that there are plenty of phones you can buy off the internet, but what do the carriers offer? My point was specifically taken from the FCC report, and they counted, the average of the big 8 carriers offered only 43 phone models to choose from and the smaller non big 8 carriers offered half that amount. You did not address my point, Steve. Here in Hong Kong carriers offer regularly over 100 models to choose from, and that is not 'different color plates' haha. You know, you've been here. And that is by no means unusual for most operators around the world.

But your follow-up statement that in the UK there are only 147 models offered, is outrageous! Blatant lie. I went to the Nokia pages just now. I entered as my region the UK, and looked at what are the current Nokia branded phones offered for the UK, ie currently marketed and sold. There are 96 models currently that Nokia alone sells in the UK ! Are you seriously Steve Largent, CEO and President of the CTIA, claiming that Samsung, SonyEricsson, LG, Motorola, ZTE, Huawei, Apple, RIM, INQ, Vodafone, Alcatel, Phiilips, HTC, Sendo, Ben-Q, Palm/HP, Kyocera, Sharp, Fujitsu, Panasonic, etc each only offer 2 phones? Come on. Where did you get that silly number of 147 models is all that the UK market offers?

The point was about carriers. I went to Vodafone UK's website. Guess how many phones they will let me order right now online? 60 models. I bet they have more in their stores. But even my 60 at Vodafone UK is 39% better than what your giant US carriers offer on average. And yeah, come here to Asia and lets compare. The point was that the carriers in the USA are lazy, they don't give their customers good choices of phones, and you lose. Your arguments are either irrelevant and factually wrong. And my rebuttal arguments carry the day. At the very least, if you want to pick the UK as the standard, on my past carrier which I mentioned before in my original posting, Vodafone, they have at least 39% more choice. I win you lose. 

THEN ON MY ARGUMENT 15 THAT US CARRIERS HAVE HIGHEST MONTHLY FEES IN THE WORLD

Here you again do not directly say it is not true (and how can you, you yourself, the CTIA, report on the monthly average spending which in your latest report you said was $48.16). Europeans typically pay about half that per month, in most of the Advanced Asian nations they pay closer to a third of that. The only country that comes close to US levels is Japan. You do not directly refute my point but you do make a good counter-argument, claiming that "America leads the world in wireless value". That sounds good. And you link to a CTIA summary, how quaint. I am sure that was pure facts and there was no distortion at all in that international comparison. At least I am not pulling that stunt and quoting stats here from the TomiAhonen Alamanc and my international index of mobile industry leadership haha..

So, you claim America leads in wireless value. You then state that based on that table, the US average cost per minute is 4 cents and the nearest rival is 6 cents in Mexico. So first - why are you not using your OWN stats, which tell us that the average cost of a US voice minute is 5 cents? Secondly - why are you not mentioning that the CTIA measures the "reported mnutes" - which means as the US still clings onto that archaic method of double-counting - you charge both for outbound minutes and inbound minutes so your count of 2.5 Trillion minutes means 1.25 Trillion minutes, counted twice. When we adjust for the actual minutes talked, not the minutes double-charged we get the real US minute cost of 10 cents on average charged, half to caller, half to call receiver. You know this Steve Largent, CEO and President of the CTIA. Your minutes (and SMS text messages) are always offered to international bodies with the warning that you count both outbound and inbound minutes (and messages). You are clearly picking the most favorable number and then you purposely avoid the truth.

No Steve, not even close. I took a look at a Finnish measurement by the Finnish regulator (Viestintavirasto) for 2008, which went across every available commercial price plan, and found that most common Finnish price plans for voice calls had prices ranging from 3 Euro cents to 4 Euro cents for contract customers, and about 6 to 7 Euro cents for prepaid customers. You probably don't know the Finnish market by heart, so I can tell you that under 10% of the Finnish market is prepaid. Most Finns pay under 4 Euro cents ie under 5 US cents for their minutes. Thats half what American customers pay. Oh, and the Finnish customer pays under half what Americans do per month. But lets come here to Hong Kong. The regulator said that the avarage minute price here was 1 US cent in 2006. Where is your 10 cent fee now?

So clearly we have now arguing statistics. Lets get an independent judicator. Lets go to the ITU, that even you at the CTIA acknowledge as the final global authority on all things relating to telecoms. And the ITU had a convenient report just last year called "The Digital Divide". And you know fully well Steve Largent, CEO and President of the CTIA, what that report found. When taking the gross national income by per capita, and looking only at mobile telecoms spending, the USA is not anywhere near the best value country. Nowhere near. The USA came in at the rank of 14th. Not even in the Top 10 by your claim of value. Who was first, no surprise, its Hong Kong of course. Who were ahead of the USA? The usual suspects, all Scandinavian Nordic countries were there, Sweden, Denmark, Norway, Finland and Iceland, as well as for example Singapore, the UAE and Germany. No, Steve, no no no. The USA does not offer the 'best value' not by a long shot.

But even if that 'value' argument somehow did hold true, you did not address my point - that the USA has the highest call charges on the planet, for which the American consumer gets the worst networks, the worst phones, the worst customer service, etc. The USA does have the highest monthly charges. The only near rival is Japan, where at least the Japanese consumer gets a fair shake, with the worlds' best quality networks, the best 3G coverage, the best phones, the best customer service etc. Your industry is giving a bad bargain for the US consumer. It really is (but you do know this, and you are putting on a brave face to defend it by trying to distract the reader with other facts to hide the truth).

I win my argument, no contest, that the USA does have the highest costs of wireless telecoms. You try to counter that the US has best value, but you actually ignore your own data, to pick other data that sugarcoats your story, and you deliberately avoid counting accurately the double-counting of the voice minutes. When we adjust for real charges, the US consumer pays on average 10 cents per minute and that is a far cry from the 5 cents Finns pay or the 1 cent us here in Hong Kong pay. No, you lose this argument Steve. Americans do not get good value for their hideous monthly phone bills.

BUCKET PLANS DIDN'T DO IT

So, your bucket plans innovation then did not help, in solving the value issue. I can grant you that US carriers invented the bucket plans. Fine. But that goes to the above, the evidence from the ITU is pretty condemninng, the USA is nowhere near the best value for consumers. I'll give you the bucket plans.

MY ARGUMENT 17 - US HAS WORST CUSTOMER SERVICE

Then you bravely take on the customer service issue. You said that 92% of consumers are satisfied (and I pointed out that the actual FCC and GAO study said 84%). But yes, on customers service you say "I think its fair to day we're doing pretty well." Ah? Really? 

Really?

Well, I mentioned that Sprint Nextel was the absolue worst company in the USA for customer service - across all industries - in 2007. How did its rivals fare? According to the MSN Money annual survey that year, AT&T came in at number 5, and Verizon at number 8. What was it that you think you're doing 'pretty well' when 3 out of the the worst companies in the USA are wireless carriers!  But yes, lets look at the latest survey? Sprint Nextel is no longer the worst company in America, its moved 'up' to 3rd worst. Are you still proud Steve Largent. And yes, the two others escaped the bottom 10, but all other big 4 US carriers, AT&T, Verizon and T-Mobile still populate the top 25 of the worst companies in America. You are serious to say "I think its fair to say we're doing pretty well." I know you have to put a brave face to the beleagured industry, but Steve, all 4 big carriers among 25 worst companies in America. That is not a proud moment in your industry and you know it, even though you can't say it as they pay you salary.

Steve loses the argument that the US wireless industry has horrible customer service. Its not even close.

MY ARGUMENT 18 US DOESN'T HAVE ADVANCED PHONES

Again Steve puts up a fair fight here, he lists top smartphones like the iPhone and many Android phones and Blackberries etc. Sure, these seem like very hot phones in the US context, and US pundits tend to like them, and any US reader will immediately recognize these as the cutting edge of what is available there.

Thats the rub. These are phones that are available there. In America, where phones are lousy and out of date when compared to the rest of the world. You say these are the best phones, eh? Lets go to Japan. This summer's top phones in Japan. To start with, all are 3G phones. Not most new phones, all. Have been since 2007. And plenty of more advanced phones beyond that, HSPA etc. But yeah, lets look. Standard features on Japanese phones include NFC. How many of your phones there in your list Steve Largent, had NFC? So how many can be used as a mobile wallet? How many? And how many have a digital TV tuner? Most Japanese mid range and about all top phones have a digital TV tuner.

Then lets go to specs. What was the top camera in your list? The typical high end cameraphone in Japan now has 13 megapixel resolution. What did you say about world-leading phones? I recall from specs your phones you list have between 3 and 8 megapixels. What size screens did you have? In Japan the largest phone screens are now 4.5 inch screens. I think there were a couple in your list that had 4.3 inches, the iPhone 3.5 and most Blackberries about 3 inches or less. What of WiFi. Not that they'd have WiFi the new gimmick in Japan now is WiFi router. How many of your phones there had a WiFi router capability (to act as the WiFi hub to other WiFi gadgets to connect to the wireless internet)? I don't think its there Steve.

How about waterproof? A third of the new Japanese phones are waterproof now this summer. Not for the beach - to use in the bathtub and shower - because of course once you start to use that 'mobile internet' you mentioned before - the Japanese invented that in 1999 and have been surfing the mobile web now for more than a decade - next you want to take your phone to the bathtub to listen to music, play a game, surf the web - or just have the phone there in case a call or message arrives. But traditional phones don't take kindly to falling into the tub by accident and drowing in water. Yes, a third of Japanese phones this summer offer waterproofing for bathtub and shower use. How many of your phones were waterproof? Not a one.

Its easy to suggest that your American smartphones are 'advanced' when the domestic US consumer has never experienced anything better. If we go to some of the most advanced markets, like South Korea or Japan or here in Hong Kong or Finland or Sweden etc - you find far more advanced phones than what US consumers are exposed to. I do not mean that the iPhone or Blackberry or Android phones etc aren't clever or good and they have innovative aspects. But the worlds' most advanced phones - you know this, you've visited Japan, I think we met there last when we met, at the big 3G event in Tokyo didn't we? You know the Japanese phones are literally years ahead of the US phones. So that was yes, a 'touchy-feely' feel-good argument for US domestic consumption, yes, what would you expect from the head of the CTIA. You'd sound unpatriotic to say the Japanese make the best phones haha. Of course you had to say the US makes the best phones and put your best face forward. But you know Steve that wasn't true. So my point stands that the US consumner is not offered the world's most advanced phones by its carriers and your list of advanced phones in the context of the US domestic market did not in any way prove your point. No, my point stands.

ARGUMENT NUMBER 11 - US HAS POOR QUALITY NETWORKS

Now, you did not directly refute that the US has the worst networks, but you did kind of argue that the US has moved very far into 'next generation' networks like 3G, HSPA, EV-DO. And you said the US has more 3G subscribers than anyone else as an absolute count.

So, is it true? You want to talk network generations? The USA was not the first to launch first generation 1G networks - that was Japan in 1979 by NTT. The first US 1G network, Ameritech was launched 4 years later in 1983. The US was not the first to extinguish its total 1G network environment, Finland was that, doing it in the year 2000. The USA still has 1G networks in operation. The USA lagged Japan by 4 years in 1983 and today lags Finland 10 years and counting.

The USA was not the first to launch 2G, that was Finland with the Radiolinja network in 1991 on GSM. The USA's first 2G network came on line five years later in 1996 when AT&T launched with D-AMPS. The first country to extinguish its 2G networks is Japan just now when this summer the last 2G network will be turned off. The USA isn't even talking of ending 2G networks. So with 2G, the USA lagged Finland by 5 years in 1996 and lags Japan today by what, at least a decade.

The first 3G network was launched by NTT DoCoMo of Japan in 2001. The first US network to launch 3G was Monet a year later, but they went bust trying it. The first viable 3G network in the USA was Verizon in 2003. Only 15 networks in 10 countries managed to launch 3G before the USA got around to doing it. With 3G the USA started by lagging Japan by 2 years. But the 3G story, really, Steve...

Are you sure Steve you want to argue 3G with me?

So, 3G. The USA passed 10% migration to 3G in 2007. South Korea did it 3 years before. The USA passed 20% migration to 3G in 2008. South Korea achieved 20% migration three years earlier. And yes, now the USA has passed 30% migration in 2009. When did the Koreans pass that point? four years prior, that is, in 2005 is when South Korean 3G passed 30% migration level. What did you say about the US leading in 3G?

And yes, the US migration rate to 3G is 34%. You think thats impressive? You are proud of US leadership in 3G with that number? Today? The UK is ahead of the USA. Italy is ahead. The UAE is ahead. Israel is ahead of you and so is Spain. Hong Kong is ahead. Switzerland is ahead. New Zealand is ahead. Finland, Austria and Norway are ahead of you Americans in 3G migration.

And then we get to the really advanced 3G nations. One third of Americans have a 3G subscription. But more than half of Singaporeans have 3G. More than half of Swedes do. And more than half of Taiwanese do. And more than half of Australians do. What did you say about US leadership in 3G?

South Korea has migrated 79% of its subscribers to 3G and yes Japan was the first country to achieve 100% 3G migration. You think USA's 34% is something to be proud of? (source for all of the above is Netsize Guide 2010 except Japan is Japanese regulator)

You once again used the size of the USA as the false argument. Just because the USA is bigger, doesn't mean your 3G migration is better. You calculated total 3G subscribers, total HSPA subscribers, total EV-DO subscribers (and compared against EU5). That is not right. You know fully well that for international comparisons the only valid comparison is per-capita. And on that basis, as Japan has 100% migration to 3G and the USA has a third, there is no way you can claim to be better at 3G than Japan. Sorry, you lose. In fact, 17 major countries (and many more tiny countries like Luxembourg) are ahead of you in 3G.

THAT DIDN'T DEAL WITH ARGUMENT 11 WORST QUALITY NETWORKS

So you really didn't want to mention the quality of the existing networks, did you? You know this is a horribly bad argument for you. We don't need to go far for condemning evidence. Lets read from the FCC report again. What did they say of US wireless network quality? Ah, yes, for the past 3 years the quality of the networks has not improved. And how bad is it? The FCC reveals that 15 out of every 100 calls has errors!

WHAT? 15 out of every 100 calls made in America fails in some way! How incompetent is that? I really had to dig and dig and dig to try to find something comparable from the normal world. I finally found something similar from the Finnish regulator in their 2009 report. This is the level of quality in Finnish wireless networks today - the number of complaints per 100 - not calls - per 100 subscribers - is 0.7% (every 6 months). So out of every 1,000 Finnish subscribers, 7 will complain. Now, as they make 3 calls per day, you get to 10,000 calls per year that generate 14 complaints. This is the level of quality in European networks. In America for every 100 calls there are 15 errors. In Finland literally 100 times better, 14 complaints per 10,000 calls !!!

Do you see Steve Largent why all who travel internationally - complain bitterly about US cellular networks, and find foreign networks blissfully perfect. Not just in Finland or Japan. In Brazil, in Russia, in India, in South Africa. Far FAR better networks than your American networks. But you know this, that is why you don't even try to argue it. And you know, one out of every 7 calls in your network fails. That is totally unacceptable.

I WILL GRANT YOU 3 MORE ARGUMENTS TO SAVE TIME

I notice this is a very long blog. So to save time, I'll grant you a couple of arguments as they are pretty pointless to my 20 complaints. You said the US is the biggest mobile data market. Fine, that is measuring without per-capita, but I'll grant it to you. It is irrelevant to the quality of the service your carriers give to your customers (and on data, whats all this iPhone users crashing the AT&T network etc? but thats another story).

You said some Europeans use SMS because voice is too expensive. That was already dealt with in the above, that when you account properly for US minutes - double-counting both incoming and outcoming minutes, your 'value' argument goes out the door. But yes, so what. I can give you this argument, some use SMS to save money? It is no defense to your networks and your carriers being so hideosly bad. I already proved to you that many European and Asian countries have far lower voice call charges than the US has. Don't point the finger here, talk about your own carriers and your own market. Even if you were totally true that Europeans only used SMS to save money (which is ludircrous and you know it), it still does not in any way invalidate any of my 20 points.

And you say US consumers like SMS. Well, earlier you said US consumer lag in SMS use, and you said that US consumers like voice rather than SMS. Please make up your mind, you can't have it both ways. If its that US consumers prefer voice, then your trend of more SMS than voice seems to suggest you are forcing US consumers to do what they hate? (and I win my main point, that US carriers are evil). Or else, if US consumers actually do prefer SMS to voice, then I win my argument that the US carriers have served their customers badly by so much lagging in SMS (a point you conceded already). But again, I'll grant you that US consumers like SMS. Fine. That does not invalidate ANY of my 20 points about how bad the US carriers are.

LETS COUNT UP THE SCORE ON MY 20 POINTS

Now we have dealt with all points but one from you arguments. Lets see where we stand.

1 - the receiving party also pays for incoming calls

You never touched this point. You have no response. You know its true and its an obsolete model,

2 - American carriers have on average only 43 phone models to offer consumers

We dealt with this, the facts are that European and Asian carriers offer more in their stores.

3 - national roaming is still used in the USA

You never touched this point because you know its true - so much so that CTIA standard reports include this statistic.

4 - SMS messaging has unacceptable delays, even 48 hour delays

You never touched this point, you know its true.

5 - US carriers charge for incoming SMS messages

You know this is true, you never argued it.

6 - US lags in SMS adoption

You conceded this point to me.

7 - American phones are locked to the carrier

You never argued this point. You know its true. The FCC report itself acknowledges this saying "msot handsets sold in the USA are locked"

8 - CDMA carriers don't even offer a SIM card

You never argued this point, you know its true.

9 - American consumers (fully paid up customers) can be fired for complaining too much

You know this was what happened with Sprint (CEO and CMO were eventually fired)

10 - American consumers may be threatened by VP level execs if they complain twice to the CEO

You know this happened with AT&T (but the CEO apologized)

11 - American networks have horrid network quality

This point you never addressed directly, but you rather talked of 3G which doesn't matter. The US networks get 15 errors per 100 calls. That is the world's worst.

12 - WiMax is not 4G

You never mentioned this, you know its true.

13 - US carriers have abandoned their international empires and gifted these to foregners

You never mentioned this, you know its true.

14 - US consumers pay highest wireless charges of any country

This point you tried to argue. You never countered the fact that the nearly 50 dollars is the highest in the world, but you tried to argue it is good value for US consumers. I showed its bad value. And the fact still stands, US consumers pay twice what Europeans do per month (for far worse networks etc).

15 - American carriers cripple phones

You never argued this point because you know its true.

16 - American carriers have the worst customer service

This point you tried to argue with faulty stats. We have since determined that the real FCC report had far worse customer satisfaction and still today all 4 big carriers are among 25 most hated companies in America.

17 - Americans are not offered the world's best phones by the carriers

This point you tried to argue with a list of new phones today. I countered just with examples from Japan, showing far more advanced phones.

18 - US carrirers didn't bother to deploy video calling (inward facing cameras and 3G)

You never touched this point, you know its true.

19 - US carriers are greedy with 50:50 revenue sharing deals, where Apple's 70:30 deal seems good

You never argued this point., you know its true as well.

20 - The US carriers will not discount the monthly fee if the consumer brings their own phone, forcing same hideous fee as with subsidised phones

And this last point - my most important argument, the one I indicated as 'criminal' - you did not dare to touch, because you know its true. Its shameful of the US industry and its punitive and greedy practises and there is no justification whatsoever for it. And you know it. And again, so does the FCC which wrote in its report: "when customers bring an unlocked phone to postpaid plan, they do not typically receive a lower priced plan that would reflect the fact that the provider does not have to recoup the cost of subsidy."

It is criminal behavior and needs to be stopped immediately and if not, that needs congressional intervention to help the US consumer. No wonder you didn't touch it.

So there, thank you Steve Largent, CEO and President of the CTIA, for a valiant but failed attempt to respond ot my rant.

As to the last item - the one about 'Tomi wants to sell books and consulting services' was a bit below the belt, don't you think? I am not the publisher of 3G Marketing. The book was released in 2004, it was the fastest selling telecoms book of all time - 6 years ago - and has long since passed its peak. I have written 6 newer books which I did not mention in my blog. Why would I go through this trouble to 'try to sell books'? That long a tirade?

And as to consulting, come on, you know me and my refernce customer list is the gold standard. My reference customer list includes the world's biggest mobile operator/carrier China Mobile, the world's largest mobile operator/carrier group Vodafone, the world's largest network infrastructure provider Ericsson, the world's largest handset maker Nokia, the world's largest smartphone operating system provider Symbian, the world's largest mobile applications developer Buongiorno, the world's largest mobile internet provider NTT DoCoMo...

And of North American companies, the world's first cellhphone maker Motorola, the world's biggest pure smartphone maker RIM, the world's largest chip maker Intel, the world's largest PC maker HP, the world's largest IT company IBM... 

I do not need to write radical, hypebolic blog articles to get business. You know that. And you know EACH of my 20 points had merit - and you know fully well that most of those have been documented by others critical of the US industry. So my rant had total merit, and there was no ulterior motive for me, other than just simply, as yet another complaint came along on Twitter, I had simply had enough. I could not hold this tirade inside of me anymore, I had to vent and express my frustration with the US wireless industry today, which is falling further behind. Its time you guys woke up and started correcting things. Obviously you can see at comments here on this blog and elsewhere, that I struck a nerve. My points do have merit.

Steve you asked me "What planet are you living on?" I am living in that part of the planet where 93% of all mobile phone subscribers exist. Once 30 years ago the world had similar services, networks and handsets. Then most evolved, but the US did not. I live on that part of planet Earth where consumers get good service, on good phones, on good networks, at low prices, without locked phones or crippled phones, without locked networks but having the freedom of the SIM cards, without paying twice for calls and messages both outgoing and incoming, where national roaming is a thing of the past, where customers are not victimzed or threatened with lawsuits, where messages arrive within seconds rather than 48 hours, where seven out of seven minutes of voice calls are without failures - and where if a customer brings his own phone, the customer gets a fair price on the monthly fee, that does not include a unused handset subsidy fee into the pockets of the carries. That is my planet, Steve Largent. The question should be: "What planet are you on?"

So thank you Steve Largent. Your arguments did not carry the day. It is still true, that US carriers punish and torture customers. Their behavior is that of cavemen. They need to learn and grow up - to join the rest of the world in the 21st century.

But thank you Steve for the reply. Yours Truly. Tomi T Ahonen    :-)

Comments

[Alexander Gödde]

Before my last trip to London I checked pre-paid plans and was a bit shocked by how much cheaper minutes packages were than in Germany. And, sure enough, Germans on average talk quite a bit less on their mobiles than the British.

This got me thinking, however:
What if Germans don't talk less because of the cost of minutes, but because our cultural background means that we are less chatty on the phone?
Since I would guess that the ARPU in both cases is in a similar bracket for both Germany and GB, and with fixed costs for the networks etc. presumably being approximately the same, maybe the cost of minutes is a function of desired ARPU/average minutes talked? Maybe Germans pay more per minute than the British precisely because we talk less on the phone than them?

[Antoine RJ Wright]

Tomi, wow. This was a debate and response. I don't know that a reply will be publically forth coming, but it needs to.

[Tomi T Ahonen]

Hi Alexander and ARJ

Alexander - good point and we've been wondering about that for example in Finland that perhaps part of the reason why SMS was such an easy early hit in Finland is that Finns are natually very reserved, do not open up to talk much, so a more 'contemplating' communication which you can do easily with SMS seemed to suit them - ie you can wait for a while considering how to reply haha...

ARJ - thanks haha.. I would love to hear his answer, but am afraid it won't come.. But I am really happy originally that he took the time to answer and on the surface of it, his response blog did seem to address several of the issues. Its not until more careful observation point-by-point that we notice he did not even touch 15 of the 20 points I made haha..

Thank you both for writing, now am holding my breath to see if Steve replies (ok, thats enough, I stopped holding breath haha..)

Tomi :-)

[Fernando Guillan]

i Tomi, what can I say. You left me speechless. Your are so intelligent, well informed and so good at what you do but still you are so humble.That says a lot about the kind of human being you are.It was a sheer pleasure to read your response to Mr. Steve Largent, CEO and President of the CTIA, even if he does not deserves to be adressed as Mister. I am sure Mr Steven Largent, CEO and President of the CTIA must be in pain big time right now. The truth hurts. And you gave him nothing but the truth.
My feeling is he will not have the guts to reply to you. He must be running for cover now. He, without a doubt is a disgrace for the industry. I hate a person with such low standars, who is capable to use any lies and misleading information to try to win an argument. I feel sorry for Mr. Steve Largent, CEO and President of the CTIA.
Tomi thank you very much for being such an honest and straightforward guy. We need more people like you in this world.I am proud to follow you on twitter and read your blog. I really hope to meet you in person sometime in the future. I am looking forward to it. By the way, do not take it the wrong way. I am not hitting on you, I am happy husband. Hahahaha... Just kidding.
I just wanted to give you the credit you deserve for all your hard work. Once again, thank you Tomi for everything you do.

[Tomi T Ahonen]

Hi Ferndando

Thank you so much. I am humbled.. And I really appreciate it that you took the time to write that.

BTW I also of course went to the CTIA blog and posted my very short, polite and informative comment that I have acknowledged his responses here and on Twitter, and that I have posted a rebuttal here (and invited CTIA blog readers to consider returning to read my new posting here).

Lets see if that is going to be posted on the CTIA blog after mediation, or if they don't want that comment up haha...

Thank you Fernando - I am sure we'll meet up at some point and have a good cup of coffee together and discuss how to make the mobile world a better place, eh?

Cheers

Tomi :-)

[Jarret]

Tomi, it is always a pleasure to read your blogs. This one rates as one of the best to date.

I enjoy your analytical approach to the rebuttal. The fact that you share all these stats and data about the world telecoms market so freely, without expectations is awesome. I look forward to reading more...please keep up your good work!

Jarret

[Michael]

Great reply Tomi! I enjoy reading your articles every time. Also there is no point to blame Mr. Steve Largent; after all it is his job to protect his industry.

I think it is absolutely ridicules that they charge for incoming SMS, unlike phone calls you have no way of blocking them. If you bring your own phone and not signing for a new contract they actually charge you more!

The big three (Verizon, AT&T, Sprint) grew up from old telecommunications companies so not surprisingly they inherited the way to do business and T-Mobile and the rest just following the lead. Just few points: we have 2 phones with WiFi router functionality - HTC Evo and Motorola Droid X; I had this feature for about 2 years on my Windows Mobile phones with 3rd party software. Also I read technical articles about WiMax and it looks very similar to LTE and Clearwire mentions that the backbone is the same; the only difference is in "software" so it has to be 4G.

[C. Enrique Ortiz]

Great summary Tomi... "Mobile" in the USA is not as smooth as Europe; there is a lot of legacy baggage. A lot of the same excuses from more than 10 years ago are still being used! For example, the same network concerns from operators which are the reasons why things such as video calling has not been deployed. And the control by operators is reason why the selection of handsets is much smaller. Your posts help create transparency, thanks.

In the meantime, "In Chaos Lies Opportunity" for those who want to take it.

ceo

[ysamjo]

Great using of facts & figures, as always.
But I stumbled over your "most advanced hardware" argument. Please show me a japanese smartphone with 4.5 inch, NFC and WiFi router capability. And even more important on what OS?

[Ronny]

Tomi, this is absolutely the kind of debate more required at open forums. Thanks for broaching the subject.

Question: does culture, law of the land and awareness in US contribute to the unfortunate facts you have identified? Appreciate your opinion.

[jMac]

Have distributed to all clients, contacts and the twittersphere. We love you Tomi.

[Miklos]

For the Japan phones mentioned:

(2009) http://www.mobileinc.co.uk/2009/09/the-future-phones-of-japan-solar-powered-waterproof-and-10-megapixel-cameras/
(2010) http://www.craveonline.com/lifestyle/article/5-amazing-japanese-mobile-phones-96221
(2010) http://www.youtube.com/watch?v=D_JGzvUGmJ8

Sharp released a phone in 2009 with a ppi of 282.73 (1024x480 on a 4" touch screen).

Personally I like this 2009 phone from Japan: http://mb.softbank.jp/en/products/samsung/940sc.html - Remind you of any current launched phones? :P

[Vezance Xocobs]

hey Tomi! thanks for the wonderful article. I must admit i'd prefer your sentences to be better structured but i guess the style works for a lot of readers. I guess i am just too busy to spend too much time reading.
anyway, i used this post as a reference for one of my articles and linked back to you :)

[Walt French]

Wow.

Now, let's be clear that asking the CTIA to clean up its act is asking its members to go on a profit diet. Seems pretty clear that if they thought better service would get them more customers, or that lower prices, more flexible pricing plans, etc etc mattered, why, there was nothing to stop them.

So now that we're clear on what's happening, what can we do to change it?

I'll offer the idea that US cell companies protect their oligopoly by many means. Frinstance, subsidized phones justify the contract locks, and as Apple found out, Americans seem to enjoy their free leg-irons. Dunno how to change that. But the FCC practice of auctioning spectrum is something Americans OUGHT to control. Right now, a carrier has to pay huge bucks up front to allow them to put up antennas (or lease them from tower co's); unless they're one of the big 4 they're pretty much guaranteeing financial suicide. Economists call this a "barrier to entry" and here we have the gummint enforcing it.

Nothing I can think of would be more effective than requiring firms that lease America's radio allocation (from us Americans, who own the spectrum), to re-license them to any and all carriers on a non-discriminatory basis, together that no single lessor acquire rights to more than 25% if there were competitive bids at all.

So American Tower Co might pony up for 25% of all the spectrum in California, which they would then re-sell to AT&T, Verizon, etc. If they charged too much for it, another company would have incentive to undercut the price. And most importantly, WaltFrench Mobile, Inc., could sign up for ~ 1% of the usage on a metered basis, and I could offer all-US coverage without having to sink billions in spectrum that I could not get customers for.

This idea might mean lower prices in the FCC auctions. Americans would get less from the carriers. It would result in MUCH lower prices for service. Americans would come out way ahead.

Better ideas welcomed. Even those outraged rants are welcomed, but I think we should move to the next step.

[gdsafsa]

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[KB]

How about this!??

http://arstechnica.com/gadgets/news/2010/10/us-canada-lead-the-world-in-expensive-cell-packages.ars

[KB]

And slightly off topic:

In France, there is a package from Free.fr (http://www.free.fr/adsl/index.html)
where you get Unlimited Internet, cable TV and UNLIMITED CALLS to 103 countries landlines and cell phones for less than $40/month!!!!!! (special numbers excluded).

Go to:

http://www.free.fr/adsl/telephone.html

and click on "Inclus dans votre forfait" to see the map of what's "Included in your package"

My parents and my sister call me for "free" (to Boston) and I always have to shorten the conversation because in the US we also pay for incoming calls!

Why is this possible in France and not in the US?? Have cable TV, phone and internet providers made a deal??

[Baseball Hats]

I gave my site a few examples below. If you appreciate my comments in you enter.Baseball Hats

[Polly]

Alexander - good point and we've been wondering about that for example in Finland that perhaps part of the reason why SMS was such an easy early hit in Finland is that Finns are natually very reserved, do not open up to talk much, so a more 'contemplating' communication which you can do easily with SMS seemed to suit them - ie you can wait for a while considering how to reply haha...

[white iphone 4]

superb posts. Mind sharing how you get the info for blog posts