US vs Them? American wireless industry, come meet me at Camera 3

Hey, American wireless industry? Come meet me at Camera 3.

UPDATE June 24 - The US wireless industry body CTIA has responded to this blog with a commentary by Steve Largent, the CEO and President of the CTIA. Here is the link to his response at the CTIA blog. I should point out that several of his replies are non-responsive to this blog, and several are totally irrelevant but there are some good points there and some conveniently misleading arguments as well. I urge my readers to go read Steve's response. Update June 25 - I have now written my rebuttal. I suggest you read this rant first.

(Camera 3)

You know what? You're pretty big by now. You've got a nice amount of customers. You've got your networks all set up. And as an industry you're making a good amount of profits now, aren't you? You're now making more money than the fixed landline telecoms folks even, isn't it? Good for you! 'Atta boy.

So now here's the deal. Its 2010. We're ten years into the new millenium. Its about time you grew up. You've gotta stop treating your customers as prisoners, and punishing them all the time. Thats not 'nice'. Thats not the way we do things here in the 21st century. I know you picked up those wicked habits in the nasty 1980s based on the Yuppie attitudes of 'me first' and watching Gordon Gekko on TV reruns of Wall Street. But come on, let that go, its time to grow up. To get with the program. To wake up.

So what do I mean? Lets start with that punishment you dish out several times every day to your customers, for every inbound call - they have to pay. Thats not nice. Did you know that this punitive practise has been discontinued in almost all countries of the world already. Yes. Its true. Most countries you never pay for any calls you receive as long as your phone is in your home country - if you take your phone abroad, yes, then its fair to charge for incoming calls. But not for calls you receive in your home country.

And guess what? The industry has calculated time and again, that it is more profitable for you the carrier, yes, more profitable if you change away from this punitive model where the 'receiving party pays' and switch to the model where only the 'calling party pays'. Why is that you said? Good that you asked. In your model, where people have to pay for incoming calls, the cellphone owners fear incoming calls. They often will not keep their phone turned on! Or if they do, they won't answer calls if they are not familiar with the caller's number. This further creates a fear overall of cellphones, meaning some won't get their first mobile subscription (gifting all their telecoms traffic to your rivals, the fixed landline carriers or worse - to Skype). And for those who do have phones, it means many times they don't bother to take their phone with them everywhere, because they are not fully addicted to it yet. You are slowing the natural growth of your industry.

Why would you care? Because that call that was not accepted, would have been a paid call anyway - the caller would have paid. If the caller was on your network, you simply bill the caller. If the caller was on a rival network, obviously you get interconnect revenue. In any case, for any call you 'terminate' into a cellphone on your network - you make money! Why would ever you have any situation where customers don't take calls. Thats plain dumb. So you are abandoning telecoms traffic - profitable telecoms traffic - when your customers are afraid to receive calls. Why do you punish your customers this way. Once all carriers/operators in the world had that same archaic business model. Today more than 90% of all countries have abandoned that punitive model. Isn't it time you Americans come join us in the 21st century and abandon this obsolete obstacle to telecoms success?

Which brings me to your cellphones. I was perusing through that nice FCC report on the wireless industry the other day, and found that on average the major carriers offered 43 cellphone models to their customers to choose from. Now yes, I know I know, it is more in 2009 than it was in 2006 when you only let customers select from 28 phone models, and yes, I know the big 8 carriers offer more phones than the smaller carriers (who average 23 phone models of choice). But again, you are the USA. America. Where anything is possible. Did you know that over 40 phone manufacturers from over 12 countries make more than 2,000 phone models any one moment of any year? And you limit your customers to only 43? Thats not American! Thats not 'free market'? Thats not freedom! Thats borderline communism, state control, isn't it? Thats socialism! Come on, be American about it - give your customers a choice! A real choice! Do at least as well as in other countries, why don't you?

Here in Hong Kong, where we only have 7 million people in the whole country, and there are 6 wireless carriers to serve us. So the carriers are far weaker than you giant American carriers. But you know what? When I walked by the window of my carrier, SmartOne, the other night, in the window of a small store, not their big flagship stores, in this small store window, I counted 93 different phone models. Is that fair? Why would some Asians get to choose from far over 100 phone models (there are many more phone models inside the store) and Americans only get to choose from 43? Now that we have the iPhone and the Blackberry and the Microsoft Kin and the Google Nexus One and the Motorola Droid etc - don't you agree there is a bit more variety in the scale of handsets, and the American customer deserves better than a handful of handsets?

Oh, and I used to live in the UK before I moved here to Hong Kong. Back in 2006 when you American carriers offered on average only 28 handsets to choose from, my UK carrier, Vodafone, had close to 100 handset models in their catalog. Again, they sold more than those, but that was what they were actively marketing - four years ago. And today you limit American consumers to 46 models (on average, among the biggest 8 carriers, even less with the smaller ones). I think if smaller European and Asian carriers can 'manage' to support twice that amount easily - and still be very profitable businesses - more profitable in mobile telecoms than you American giants are - isn't it time you let your customers experience a wider range of phones? Its not like they are somehow alien, you already have contacts with all of the 5 biggest handset makers, and your networks are on the two most common standards, GSM and CDMA, so standard phones should comply rather easily to your requirements. You have to support foreigners' phones anyway if they visit your country and 'roam' onto your network. Wouldn't this be about time? Think how much more your customers will enjoy coming to your store if you offer a bit more choice. I'm not asking you to start to manufacture them haha, and you have your stores already. About time to join the 21st Century?

So while we're on the roaming. What is this I hear that you still punish American domestic citizens for making 'long distance' calls within the country? The roaming charges for national calls? Come on! Its another caveman era concept. Its been abandoned in almost all countries already. Why do you insist on this punitive practise? The big four networks have near-perfectly national footprints, you really have to stop these types of archaic medieval torture methods. You know what you are now teaching your customers to do? You are teaching them to go get Skype on their phone or PDA or laptop, and find a WiFi hotspot and bypass your network completely. What good is that? You know fully well, you make profits on cellular calls across the country, the distance is totally irrelevant to your pricing today as you have your fiber-optic backbones long since deployed and your cross-country calls go on the IP packet network anyway. If its on your network, its a profitable call. You have no basis for charging more for long distance or 'roaming' except that its a nasty habit you got into, and you think you can get away with it. The roaming is pure greedy profit that has no place in the market in the 21st century, because your customers have a choice.

Come on, who goes first? Who is the brave one who says, 'no more roaming charges inside the USA?' Come on? Who is brave? Who is bold? Who is the first carrier to jump into the 21st century?

And then whats this with SMS I hear? Just today a network was down for 48 hours with delayed text messages. What? Which CEO didn't get the memo that SMS is the most profitable service of them all? Not just the most profitable service in telecoms, the most profitable mass market service in the economic history of mankind! You Americans charging what, 15 cents per message for the standard rate when not in a bundle? That means your profit margin is North of 98%. This is bordering on criminal, its that profitable. And what do you do? Some moron in some network control center didn't notice that SMS traffic was delayed or perhaps lost? The most profitable business you have ever had or ever will have. And there are delays? What of all the lost traffic where an SMS that would have been delivered on time, would have generated a reply message. You know that. You do ...don't you? That for every sent SMS text message, there is a pretty well measured percentage of messages you get as a reply. Most SMS generate replies. And now there were delays, meaning some messages never did get a chance to generate replies! Come on! That was profit, pure profit, totally abandoned!

This is you most profiable service.  Nothing can be prioritized ahead of SMS. It is the ultimate engine to your quarterly results and the performance of your share price, and shareholder value. Your profit engine. Nothing can be prioritized ahead of SMS. The VOICE services have to crash before you let SMS crash! SMS has to be redundant for any emergency! It is by far the most profitable service you can ever imagine. If your CFO hasn't hammered this truth into the heads of every middle manager, then your CFO is incompetent. If your CTO hadn't installed safeguards for SMS through-put, he needs to be put to pasture.

And hey, while we're on those SMS text messages. Its your most profitable service? Its proven to be addictive in university studies from Belgium to Australia. One third of US teens already send 100 SMS per day. What the h*ll are you doing charging for incoming SMS? That is the dumbest idea I've ever heard? Do you have 100% adoption of SMS? No, I didn't think so? The USA adoption rate for SMS among US cellphone subscribers is 64%. Why are you not at 100% - the world adoption rate is 78%, why are you only at 64%? Its that idiotic idea to charge for incoming SMS !

Nobody else does that! Its why you LAG in the adoption of the world's most profitable service! If your investors knew this, they'd revolt and demand a new CEO immediately. Yes, the USA lags the world in the adoption of the world's most profitable service and why? Because of an idiotic punitive restrictive price plan! You know how many Finns use SMS? Try 90%. Not 90% of cellphone subscribers, 90% of the total population. When we remove those too young to read, and too old to see to read - we are left with 92% of Finns. And of the remaning 2% who don't do SMS, thats mostly people who are blind, who have lost their arms or fingers in some accidents, who have a mental disability and are clinically unable to read, etc. For practical purposes, in Finland every living person old enough to know how to read and write, and who has no physical disability, is an active user of SMS text messaging.

Why is the American adoption of SMS at 64%? Hm? Why? Brazil is at 74%. Hm? Why? Britain is at 84%. Hm? Why? In India, come on, India, the adoption of SMS is 90% among mobile phone subscribers (and India is now at 50% penetration rate). The reason Americans are not all using SMS is simple - you punish them. You do not offer SMS as a free automatic service for all to receive. You don't promise that all inbound person-to-person messages are free. Why don't you do this? Greed. Simple stupid short-sighted greed. All other countries have shown that with no inbound SMS fees, you will explode the market and everybody will want to use it. But no, American carriers love torturing their captive customers. Like prisoners. Guantanamo Bay. No, its time to stop torturing paying customers. Join us in the 21st century, will you?

And talking of those captives. Why do you lock your phones? Thats another punishment that is way past its sell-by date. Almost all other countries have moved beyond this punitive practise. Most countries have SIM cards - even many CDMA countries and networks, like all three in South Korea - offer SIM cards. Most Americans have no idea of the liberty a SIM card based phone system can provide. You American carriers think you can hide, and that you can jail your customers into prison cells in your cellular network by not offering them SIM cards and unlocked phones.

This is what other countries offer. Fully unlocked phones, and the customer gets a SIM card, which is a fingernail sized standardized memory card, inserted usually below the battery in a special receptacle. Removing the SIM card and inserting another, is all it takes to switch networks. Yeah, thats how easy it is. Takes a couple of seconds, its called a 'SIM card switch'. More than half of all Europeans have at least 2 subscriptions.

I know I know, you fear this leads to promiscuous customers. Haha, isn't that quaint. That train left the station in what, 2005 or so? Well, isn't it time you looked into the mirror and faced reality. It is the 21st century after all. All of your most heavy users of your network already have at least 2 cellular network subscriptions - on your network and on your most 'dangerous' rival network. The stats are inevitable. The facts are out there. You know this, its not a secret! It was going to happen anyway, whether you supported it or not. And it did happen. Today all heavy users of your wireless services have at least one rival network and phone. But what control do you have over the situation? Because you don't offer SIM cards with unlocked phones, you are royally scr*wed. Now you are forcing your clients not only to be promiscuous, but far worse - you will lose their primary loyalty the moment your current cellphone handset is not their fave handset anymore. So perhaps for one year your phone is their fave, but the next year the phone on the rival network is the cool phone, and yours is the 'second' phone - often left at home. Thats a disaster for you.

If they had unlocked SIM card based phones - then you have the chance to compete for EVERY minute and EVERY call and EVERY message and EVERY use on EVERY day. If you are competent in marketing, you have to be able to win in this - America invented marketing. If your CMO can't guarantee to you that your network can get better loyalty than your rivals, that CMO has to be fired on the spot.

Can you see what I mean? Unlocked phones and SIM cards mean you HAVE to try. You can't be complacent. You have to fight for your customers' loyalty every day. And it can be done. In the Ukraine they introduced the Golden SMS as a weapon to have customers prefer one SIM card over another. The Ukraine, yes, this is the former Soviet Union - giving lessons to the USA about customer loyalty. How pathetic is that? Some accused the Soviet Union of not understanding free markets and true competition. The Ukrainians didn't get that memo. And in Singapore when you leave the store of your carrier - you get a personal SMS message asking you if you were satisfied with your visit. Wow. That is real customer service. That is caring. What happens if you say no, you were not satisfied (by free SMS text message of course, you are never charged for any SMS messages or calls that relate to the carrier and its service such as calls to the calling center). You get an immediate call from not the store manager, no, from his boss, the VP of sales at the HQ. THAT is personal attention to customer care! That is modern mobile telecoms service.

In America, if you complain you may be 'fired' from the network for complaining too much (Sprint) or you may find yourself threatened with a lawsuit (AT&T). How is it possible that the country that invented marketing can have this bad customer service? Sprint was for at least two years in a row the worst company in customer care out of all corporations in America. Not among telecoms carriers. Among all companies! Worse than insurance companies even. Shame on you, American wireless industry. Shame. You need to go hire some real competence in how to make satisfied customers in cellular telecoms. Perhaps from the Ukraine? Yes, its time to make that jump into the 21st Century. If the former Soviet Union managed that, gosh, its gotta be easier for the Great U S of A, where marketing was invented.

And then those patchy networks. This is unacceptable. You've had 27 years to perfect that competence that is called network dimensioning. Its not rocket science. Its done now perfectly well in "high tech" advanced countries ...like Colombia and Poland and Argentina and Malaysia. And don't throw that worn line at me, 'but we're such a big country'. No, that won't wash. Australia is about as big as the USA. Brazil is about as big as the USA, China is about as big as the USA. Russia - yes, the former Soviet Union, the Empire Formerly Known As Evil, that Russia - is FAR bigger than the USA. And they don't have these silly coverage problems your networks are plagued with. I was just in California last week. Horrid networks, continuous drops in the coverage - on the freeways! Come on, ever heard of some clever gadget they call a 'carphone' ? You seriously mean to suggest it surprised your network planners and you didn't expect calls from freeways? How hard can it be?

If you really don't have the American competence to create continuous coverage on highways, then fire your tech staff and hire some Germans. Or Swedes. Or Finns. Or Japanese. Or Koreans. Large countries, big cities, difficult terrain - and perfect nationwide cellular coverage. No dropped calls. Go to South Korea. That country used to be a 'Third World country' only ten years ago. It was one of the poorest countries of the planet three decades ago. But go there today. Take your phone. Try to find a dead spot anywhere, in any basement, in any sky scraper, in any alleyway. I bet you, you won't find a dead spot. But you know what. If you do find it, and you call up the carrier and complain you didn't get connection at that spot - they will fix it by tomorrow!

They will fix the dead spot within 24 hours. That is service. That is attention to detail. Why is this? Its a teleCOMMUNICATION service. Every call that was technically prevented due to carrier network faults, is money not made. Money that can never be recovered. It is lost profits. It is profit leakage due to incompetence. They underestand it. The network has to be that good that you get all calls and all messages. This is YOUR business. Telecommunications. You go to a forest in Sweden - a forest. No people. No farmyard animals. Just trees. Pull out your GSM phone and try - you'll get a signal. Go to most US major city suburbs and observe how often the signal is lost. Or go to Finland, go to Helsinki, and descend into the subway train system. It was built during the cold war. Finland built its subway deep into granite - that means bedrock, like the state of New Hampshire, the gray stuff that is almost as hard as diamonds, nothing penetrates it. And Finland dug the most expensive subway system ever, deep into that rock. Why? Because they made it the bomb shelter for Helsinki residents to withstand a nuclear attack. If radiation from a nuke blast can't get to you, then no cellular signal can get there either.

Or so you'd think. Deep down on the subway platforms and all in the running subway trains, Finns happily chat away on their Nokia phones, oblivious to the granite shelter built for them. Why is this? Its because the carriers know their customer will want to be connected when commuting. Even in tunnels dug into granite stone. So the carriers installed systems to allow connectivity deep underground. Its not rocket science. Its a specialized antenna called a 'leaking cable'. One of the big companies doing that is USA based Powerwave. So in Finland - as in most European and Asian underground trains and subway trains - there is perfect cellular coverage. But in most underground car parks in America you lose coverage. Come on, Americans, you have to get with the times! Please speed up to the 21st Century.

Hey, Sprint, stop with the 4G. You know perfectly well that your WiMax is a 3G air interface as ratified by the ITU. Don't peddle that horsesh*t to the American public that WiMax - a 3G technology - is somehow 4G. Don't do it. You are only setting yourself up for more ridicule when the ITU finishes ratifying the real 4G and you will look foolish for being caught up. WiMax is not 4G and you know it. Stop saying its 4G. You're lying to your own customers. Shame on you!

AT&T, Verizon and T-Mobile - why don't you call Sprint out on that nonsense about 4G?

At least we could be honest to the American consumer, couldn't we?

The USA invented commercial mobile telecoms in 1946 when Bell introduced its MTS system. Motorola invented the first handheld cellular phone which Ameritech launched in Chicago in 1983. There was a time when Motorola was the world's biggest handset maker, Lucent was the world's biggest telecoms infrastructure maker, and 4 of the world's 5 largest carriers were American, who also owned massive empires in Latin America, Asia and Europe. Today the world's biggest handset maker is Nokia and Motorola is out of the Top 5 and is not even the biggest US based handset maker. Lucent crashed and burned and is now owned by Alcatel of France.

American carriers retreated from the world's cellular telecoms markets almost totally where now there is no US based carrier in the  Top 15 biggest carriers of the world. The Latin American 'empire' almost wholly owned by US carriers a little over a decade ago, is now split up by the Italians, the Mexicans and the Spanish. Oh, and it used to be that the world's richest man was Bill Gates of Microsoft. Not anymore. The world's richest man now is for the first time from the cellular telecoms industry. This is the industry that by all merits should belong to the Americans. The richest man on the planet is not a US citizen, however, it is Carlos Slim of Mexico, yes the CEO of America Movil. Its that massive footprint in Latin America which was once the domain of US based carriers. You gifted the fountain that produced the richest person on the planet, you gifted that to foreigners. Some might say that was bad planning. Bad management.

How could you do it? How could you, the giants who invented this industry, live through its greatest growth era - when mobile telecoms truly grew faster for a decade than any industry had sustained such growth before - and passed a Trillion dollars in size, towering over such related industries as fixed landline telecoms or the PC industry or television or the internet. And you blew it! Totally. Its not just that you did not capture the growth opportunities inherent to it, you lost all of the world and most of your home market in this, the most glorious age of mobile telecoms! How could you do this?

But no, the world studied and learned mobile telecoms. They studied the customers of telecoms and served them. The world made far more profits out of this opportunity. And the world came and took it. American giants snatched defeat from the jaws of victory. Today 45% of Verizon is owned by the British. T-Mobile is 100% owned by the Germans. Canadian Nortel - another former giant and once biggest company of Canada - went bankrupt and now sold piece-meal. And the American cellphone market? With phones made by domestic manufacturers like Motorola, Apple, Palm/HP and Microsoft (and Canadian RIM/Blackberry) why is it that the bestselling phone brand in the USA is Samsung and the second bestselling phone brand is LG, both from South Korea?

You punish the US consumer with the highest phone charges per month in the world. You add insult to injury by locking their phones and crippling their features. In return you harass your customers with the worst networks in the world and then compound that damage with the worst customer service in your calling centers and stores. You threaten and bully your customers and add on punitive and cruel charges like roaming charges with national calls and you have the gall to charge not just for outbound calls, but also for incoming calls and for incoming messages. Shame on you!

And then you sweet-talk to the customers saying but you get these nice phones for free or at heavily discounted prices. You don't bother to give your customers the best phones in the world - at least the Japanese have the decency to give fair value for the world's second highest phone charges. The Japanese get flawless coverage even in the mountains, all Japanese have 3G phones and services, more than half of Japanese have all-you-can-eat data plans, and the Japanese get the world's best phones for their money - this was the first country to introduce WiFi phones, and 3G phones and cameraphones and mobile wallets and today they offer cameraphones with resolutions of 13 megapixels, screen sizes of 4.5 inches, plus fully digital TV tuners and many of the WiFi phones act as WiFi routers! At least the Japanese get fair value for what they pay.

But no, Americans consumers get crippled versions of the cheapest lousiest phones you can find. Why is it that an Apple 'innovation' of a Forward Facing Camera is somehow radical in the USA? We've had these forward facing second cameras as standard features on essentially all 3G phones in Europe and Asia and Australia and Latin America and.. for Heaven's Sake, in Africa! I was the person flown in to place the first 3G video call on the continent of Africa when Vodacom of South Africa opened its 3G network for developers - and I used a forward facing second camera on that 3G phone - and this was in ...2004! Shame on you American carriers! That you haven't bothered even to bring this international standard to Americans and we have to wait for an outsider like Apple to bring it (now obviously, they do it on their Facetime proprietary solution, and can you blame Apple for that? You ruined yet another opportunity). The best phones? Isn't it time you joined us in the 21st Century and let American consumers enjoy what the rest of the world expects as normal.

And as I'm on Apple, what of those near-criminal revenue-sharing deals you 'offer' and punitive rules to developers? Why can't you see that a bigger cake, with many developers and fair revenue sharing is best for all? Of course someone else will come in, like Apple did, with its App Store, and offered 70:30 deals when you clueless pinheads insist on 50:50 deals? How outdated is that? NTT DoCoMo in Japan started to offer 91:09 deals - yes 91 cents out of every dollar is returned to the content owner - in 1999! Eleven years ago! No wonder that the mobile internet is a giant money-making engine in Japan - and NTT DoCoMo makes tons of money with all the extra traffic and its premium services to its eco-system. This is no secret! Its been written in case studies and celebrated by the industry for a decade. Yet you fail your domestic developers so comprehensively that you allow Apple - a computer maker - to come and set up the best cellphone app store in America. Shame on you!

You do see that 225,000 developers have created apps for Apple's iPhone App Store in just 2 years - the vast majority of these were done by American developers. And they have been downloaded 5 Billion times. You utter incompetent nincompoops! Apple attracted those developers because Apple offered a 70:30 deal and an easy market place. YOU should have OWNED that opportunity! Why didn't you have the foresight to do what Scandinavian carriers do, offer an 80:20 deal, 80 cents to the developer, and you'd have 225,000 services on your WAP portal (on-deck, so to speak) and you'd earn fabulous tons of revenue sharing content of the 5 billion downloads - and all the traffic related to it! Have you even studied the iMode business eco-system that overnight turned loss-making internet start-ups into profit-making mobile internet giants in Japan? Why didn't you empower that in your market, and gift it to Apple, who now threatens to bypass you with their multi-pronged means to make you irrelevant! When will you wake up? How incompetent are you? Did you know here in Hong Kong any developer can have his/her service approved in 48 hours? That is the way we do things in Asia. Not the months of red tape you burden your developers and 'partners' with. It truly is time you grew up and joined us in the 21st Century.

But what is your worst transgression? You promise customers free phones in return for 2 year contracts, yet you have the audacity to charge the same monthly fee for those who don't take any subsidised phones! That is not borderline criminal, that is criminal. If you offer a subsidy for a phone for a given monthly fee - and a customer says, I don't need the phone (because the old phone is fine, or they have bought another phone) - you have to offer that customer a lower monthly fee that reflects the true price of the handset subsidy removed. If not, that is truly anti-competitive behavior and need Congressional investigation. I would suggest the US congress punish you with forbidding any handset subsidies at all. It is a dubious marketing practise as it is, it confuses the customers, hides the true costs, and the world is moving away from that too. Two decades ago phones did cost several thousand dollars. Today a good cameraphone costs less than 100 dollars in unsubsidised form, and the cheapest 3G smartphones can be had for less than 150 dollars. There are no subsidies for cars, for TV sets, for personal computers. Why continue this obsolete practise of locking customers into 2 year contracts. It is totally unnecessary, but if you American carriers cannot behave nicely, maybe it is time for Congress to come and take your toys away. Which is it, are you going to play nice?

Join us in the 21st Century. Give American consumers a modern wireless mobile service worthy of their loyalty and the large amount of money you charge them every month. Time to grow up.

(back to camera 1)

I have written the book on how to do professional marketing within the wireless carrier/mobile operator telecoms environment. That book, my third hardcover book, 3G Marketing was hailed by its publisher - John Wiley & Sons (the world's biggest publisher of technology and engineering books) - as the fastest-selling telecoms book of all time, when they brought me to do a book signing of the second printing at the world's biggest telecoms event, the 3GSM World Congress in 2005. At that event I had the honor of delivering the strategy keynote, which was obviously about how carriers should do their marketing, in a consumer-oriented way.

I literally 'wrote the book' on modern mobile operator (carrier) marketing, customer care and loyalty. That book is referenced in several dozen books by other authors. I also created the Oxford University course about this topic, and have run seminars and workshops about carrier marketing on all six inhabited continents. I have advised carriers internationally on marketing matters for more than 15 years. I can say without a shadow of a doubt, that US based carriers are the dinosaurs, the obsolete cavemen, and their actions are obsolete and they must change or be killed off. Their conduct is appaling. They are a disgrace to the industry. I urge them to change now, and I advise American consumers to revolt, to write to their congressmen and demand change. It is time we brought those complacent, conceited, arrogant, bloated and colluding carriers to the 21st century. Its time to wake up.

For those who would like to understand more about why America fell behind, and how far behind is it today, please see my older blog - who leads in mobile and why.

UPDATE June 24 - The US wireless industry body CTIA has responded to this blog with a commentary by Steve Largent, the CEO and President of the CTIA. Here is the link to his response at the CTIA blog. 

Update June 25 - I have now written my rebuttal. I go point-by-point on Steve's response

Comments

[Antoine RJ Wright]

Hey Tomi, you how I feel about this, and I can say for a fact that you are spot on.

There's indeed a change to mobile policy that needs to be done here. And a massive amount of education. Guess it's time for a few of us with a voice here to step up.

[John Thacker]

" This further creates a fear overall of cellphones, meaning some won't get their first mobile subscription (gifting all their telecoms traffic to your rivals, the fixed landline carriers or worse - to Skype)."

Except that in the UK and other countries where it's "caller pays," people pay more to call cellular phones than they do to call landlines, especially internationally.

That's why, in contrast to your prediction here, I've found that many more people are driven to Skype in foreign countries than in the US.

In addition, while people pay for incoming calls, plans in the USA come with many more minutes than in other countries. If the US model is so bad, why is it Europeans and others that "turn off their phones" and run away from voice calls, preferring SMS? Sure, with the European model, everybody wants to receive calls-- but no one wants to call them (especially with a landline.)

People use SMS less in the USA-- because they use more voice minutes!

One possible reason why-- voice calls are perfectly possible to do while driving, particularly with a handsfree kit, but SMS is pretty much impossible. On the other hand, if you're on public transit, then voice calls are terribly impolite (and impractical if things get too busy) but SMS is preferred.

[John Thacker]

If you use mobile minutes for incoming calls, but you have twice as many minutes for the same price, then you're not really losing.

"AT&T, Verizon and T-Mobile - why don't you call Sprint out on that nonsense about 4G?"

Because they want to pretend that the initial release of LTE is 4G, when we all know that that doesn't fit the ITU requirements of 4G either. We'll have to wait for LTE Advanced for that.

Another thing-- why did US adoption of mobile phones come slower? Same reason why US adoption of broadband came slower-- because of unmetered local calls and then all-you-can-eat landline long distance. The US (and Canada) were rare in having unmetered local calls, which made dial-up ISPs cheaper compared to in Europe and so retarded the switch to broadband. In the same way, "free" unmetered long distance slowed the switch to cellular phones.

[Jonathan Locker]

I gotta say, living in the U.S, all of this is exactly right. I never knew how bad we had it until I stayed in Australia for a month. It was like heaven. Plans are so much more customizable to specific users needs. Thankfully, I always have used unlocked Nokias.

[Steven Hoober]

In answer to your question about who will step out of line first and change the model: No one. Two cases, of many, many, many (some others of which I have too much inside knowledge about and still should not post).

Sprint (then Sprint PCS) for years and years had the audacity to offer first incoming /minute/ free. For the same reason that you outline, to avoid people using it like a pager (as many had with their AMPS phones... or pagers). As far as I know (comparing experimental offers without it, industry-wide research, etc.) it worked great, plus was a differentiator from everyone else. And this started way back in the mid 1990s, when my European friends told me they were still biking to the neighbors because they were charged for local /wireline/ calls, both ways.
But... something. Maybe just perception, maybe stupid accounting, left the perception they were leaving "money on the table." Along with being odd man out (which is apparently bad) it got killed. And has never been heard from again.

Recently, I have on three separate occasions tried to get WiMax service from Clear (Clearwire). Product seems solid, meets my needs, and the price looks good. Who cares if I have to switch to something else in two years. Anyway, they are brand new, so should act that way, right? Wrong. They act like they are another 100+ year old telecom. Confusing, inconsistent, full of jargon even /I/ don't understand. Individual products aren't available "yet" in certain markets, the good price seems to evaporate with punitive-feeling $5 and $10 charges. For things like having the audacity to want to "roam" onto a "3G" (IS95/IS2000 CDMA) network.

What choice?

[Fernando Guillan]

Tomi, your are spot on with everything you wrote on your blog. I have lived for 3 years in the US and I stand by your words 100%. I lived in the UK for 5 years too and I lived 6 years in Belgium as well, so I do know a little about how things work in other countries when it comes to the telecommunications industry. I live in Spain now. So, yes you are damn right. But I am not surprised about americans behavior, since the vast majority of them ignore what happens in the rest of the world. I you do not look outside your window and you never leave your house, you do not know what is going on somewhere else.
And that is the problem with americans. They still think they are the best at everything, therefore they do not complain about what they are being offered by their carriers because they think it is the best deal they can get.If it is an american product from an american company therefore it has to be the best.That is called ignorance on this side of the pond.To really know if you are the best at something, you have to test yourself against others. That do not happens with the US carriers.
With regard to the "response" you have got from Steve Largent, the CEO and President of the CTIA, which I read carefully. It is totally misleading, and he is back with what he is good at. Which is other none than deceiving the american customers. I also take his commentary and all the facts that he says are backed up by well respected companies as BULLSHIT. Mr. Steve Largent is insulting my intelligence and the intelligence of many other people with his statements. Mr Steve Largent, I ask you to apologize to Tomi and to his readers for such misleading statements as soon as posible if you have a tiny bit of decency.
I you do not apologize, I hope Tomi make things right showing everybody what you are saying is nothing but BULLSHIT. I am very sorry about my manners, but Mr Steve Largent did upset me big time.

[Fernando Guillan]

Tomi, your are spot on with everything you wrote on your blog. I have lived for 3 years in the US and I stand by your words 100%. I lived in the UK for 5 years too and I lived 6 years in Belgium as well, so I do know a little about how things work in other countries when it comes to the telecommunications industry. I live in Spain now. So, yes you are damn right. But I am not surprised about americans behavior, since the vast majority of them ignore what happens in the rest of the world. I you do not look outside your window and you never leave your house, you do not know what is going on somewhere else.
And that is the problem with americans. They still think they are the best at everything, therefore they do not complain about what they are being offered by their carriers because they think it is the best deal they can get.If it is an american product from an american company therefore it has to be the best.That is called ignorance on this side of the pond.To really know if you are the best at something, you have to test yourself against others. That do not happens with the US carriers.
With regard to the "response" you have got from Steve Largent, the CEO and President of the CTIA, which I read carefully. It is totally misleading, and he is back with what he is good at. Which is other none than deceiving the american customers. I also take his commentary and all the facts that he says are backed up by well respected companies as BULLSHIT. Mr. Steve Largent is insulting my intelligence and the intelligence of many other people with his statements. Mr Steve Largent, I ask you to apologize to Tomi and to his readers for such misleading statements as soon as posible if you have a tiny bit of decency.
I you do not apologize, I hope Tomi make things right showing everybody what you are saying is nothing but BULLSHIT. I am very sorry about my manners, but Mr Steve Largent did upset me big time.

[David Doherty]

My favorite bits in Steve Largent's "What Planet are you living on":

"my statements are based on credible, third-party information and not on my opinion"...

"I could not let your unfounded and uninformed assertions go unchecked"...

Does this guy not know you are THE mobile industry stats compiler? I'd like to see him point to anyone else who shares anywhere near the same quantity/quality of stats... (99% of which you share completely freely)

"While I recognize that your post is one that is focused on generating marketing leads for your consulting business and selling some books"...

Bit of a petty dig (don't CTIA also sell a few things?) but he's definitely right about the eventual outcome. The landslide success that will be enjoyed by the smart US operator who takes your advice and goes first with 'no more roaming charges inside the USA' and/or 'no more charges for incoming SMS' will provide further testament to your ability to predict mobile industry trends... as the consultant who openly advised on what will probably prove to be the biggest growth opportunity in the 2010 US mobile industry I'd expect the publishers will be chasing you for your next best seller - which will no doubt feature a few quotes from Mr Largent's reply as evidence of the level of apathy that existed in 2010.

[Tomi T Ahonen]

Hi all who commented

Thank you very VERY much for the kind comments. I will return here to reply to each of you individually, as is our custom here at the Communities Dominate blog. Meanwhile, since Steve Largent of the CTIA has kindly responded in a very 'factual' response at the official CTIA blog, let me first do the formal reply to him and then will return here and chat more with you all. Meanwhile, please do keep the comments coming. I am really appreciating it!

Tomi Ahonen :-)

[Paul M]

when I visit USA from UK I am amazed at how backward the charging structure is for mobile phone use; here in the UK it's possible to run a phone for a dollar a month if all you want is emergency calls (voucher based pay as you go system where the credit doesn't expire), phones are cheap, operator profits are high, and the customer has a fairly clear idea of how much service costs (even including the eye-watering mobile data roaming).

[Tomi T Ahonen]

(will do 5 responses now)

Hi Antoine, John (twice, Jonathan and Steven

Antoine - thanks! Yeah, I had been building this rant inside of me for quite some time, and then that FCC report came out and I knew I had to write it..

John - actually, the trend in Europe has been for quite some time already that the cheapest minutes are onto other mobile phones on your own network, significantly cheaper than calls to landlines. But yeah, international calls in any country are driving Skype use from the UK to here in Hong Kong to Israel to Brazil to the USA. No difference there, and I think it has nothing to do with mobile or not, receiving party pays/calling party pays or not - its a factor of international calls being more expensive. Did you know expat and migrant workers tend to be biggest Skype users..

Om your argument 'in the USA people use SMS less because they use voice minutes more' is factually untrue. 2009 was the first year - the CTIA made big announcements about this, when the USA followed the global trend, that the total number of outbound communication attempts were now more SMS than voice calls. Even in the USA. So that argument doesn't wash. The facts are in, all countries, all consumers prefer SMS over voice and very validly the 'cell phone' is no longer primarily a 'phone'. It is now globally primarily a texting device, with voice the optional extra. In India its at the level of 30% of consumers have stopped making any outbound minutes, in the USA its at 11% of consumers have stopped placing any calls at all. Global trend.

Then on unmetered local calls - that sounds reasonable, except that the world's highest penetration mobile nation for almost a decade - Hong Kong - was exactly the same situation. Free local calls on the landline (and now one of the world's best broadband speeds, widest broadband adoption and lowest broadband fees - feeding Skype use). No, if that was true, then Hong Kong would have to linger at the bottom of the charts, not literally the world's highest penetration country for I think it was 8 years in a row. The evidence disproves your hypothesis, I am afraid. That was not the reason. The reason is as I explain in the blog.

John (second comment) - LTE - haha yeah, good point.

Jonathan - thanks! Yeah, for those who have not lived outside of the USA, or for those foreigners who have never lived in the USA, it is difficult to fathom the huge gulf between the US domestic market and all other countries. But those who do experience that, tons of expats both ways in our industry haha - the stories are vivid. Thanks!

Steven - great example yes from Sprint early on, and haha, I hear you, that is so typical today (the WiMax example)

Thank you all for writing

Tomi Ahonen :-)

[sp]

#80,

You used to be my hero... Not as fast as the other guy running a wide-out pattern but you could magically anticipate where the ball would be. It was like you had eyes in the back of your head. Hands of gold. I enjoyed every minute watching you impress everyone inside the Kingdome. However, today is a new day. And today I have to say that your actions disappoint me. So much so that I will not be sharing stories with my son of the incredible Largent during the Chuck Knox era.

Your comments are ridiculous. Your position is insulting. You are myopic in your thinking and explanations about benefits to consumers and businesses.

So long number 80. I believed in you.

[Vezance Xocobs]

@Tomi: I love all your articles. First, i used one as a reference for a blog post. now i am using this one as a reference for my college project. you have some amazing stats and info posted here and in the rest of your articles. thanks again.

[yiwu market]

Ok, i think i will save this for thenext time I’ll have to argue with Frank (friend of mine) about it! I wasn’t wrong

[Polly]

I love all your articles. First, i used one as a reference for a blog post. now i am using this one as a reference for my college project. you have some amazing stats and info posted here and in the rest of your articles. thanks again.

[white iphone 4]

Every time I see blogs as good as this I KNOW I should stop surfing and start working on mine!

[Henry Peise]

As you can see the iPhone 3G has a problem getting a sharp focus on objects that are close to the lens. The photo is blurry and very grainy compare with white iphone 4

[iphone cases]

I was reading something else about this on another blog. Interesting. Your position on it is diametrically contradicted to what I read earlier. I am still contemplating over the opposite points of view, but I'm tipped heavily toward yours. And no matter, that's what is so great about modernized democracy and the marketplace of thoughts on-line.

[Global Online Shopping]

Global Online ShoppingOm your argument 'in the USA people use SMS less because they use voice minutes more' is factually untrue. 2009 was the first year - the CTIA made big announcements about this, when the USA followed the global trend, that the total number of outbound communication attempts were now more SMS than voice calls. Even in the USA. So that argument doesn't wash. The facts are in, all countries, all consumers prefer SMS over voice and very validly the 'cell phone' is no longer primarily a 'phone'. It is now globally primarily a texting device, with voice the optional extra. In India its at the level of 30% of consumers have stopped making any outbound minutes, in the USA its at 11% of consumers have stopped placing any calls at all. Global trend.

[rosetta stone spanish]

amazing, i love your tutorial, I gradually learned from time to time, thank you very much