At the beginning of this year, it wasn’t a sure bet
just how the industry would fare through 2009.
Last year around this time, the country was awaiting a new administration and doling out bailouts. Economically, most bets were off. Startup money was scarce, and it wasn’t clear how many unemployed people would be forced to cut back on their wireless spending.
As it turns out, many wireless startups are getting financing, and we’re even seeing a few moves for IPOs. The industry didn’t need a bailout – far from it, as national carriers are still adding new subscribers, although most surmise that they’re just stealing from one another at this point. Sprint Nextel didn’t die; in fact, it’s finding new life in its Boost Mobile prepaid division and acquisition of Virgin Mobile USA.
Verizon Wireless finally got a Droid to give it a better smartphone competitor to AT&T’s iPhone. Who would have thought the nation’s two largest wireless service providers would be fighting for customers willing to shell out in the neighborhood of $200 for smartphones? Not to mention the data plans that make the most of those smartphones. AT&T saw its wireless data usage soar nearly 5,000 percent over the past 12 quarters.
Smartphones represent an area that very well might be saving the hide of one very long-time handset supplier/inventor named Motorola, which appeared to be on its last legs until late in the year. So, smartphones are big, and netbooks, e-readers and other emerging devices hold a lot of promise. M2M is finally getting attention from carriers. Data usage is on the rise despite a down economy. Phone user interfaces are far better than anything the industry had to offer in the past.
LOOKING AHEAD
With its wild popularity, wireless is attracting the watchful eyes of the government, and the FCC is hot on the industry’s back on a number of fronts, from competition to open access. As long as the FCC follows its stated plan to base decisions on facts rather than innuendo or emotions, the industry should benefit from this increased inspection.
But while the FCC is spending a lot of time on its national broadband plan, net neutrality and a host of issues – including handset exclusivity deals – the place where the industry could benefit most from questions asked and answered is in the area of billing.
As part of its broad inquiry into wireless, the FCC is reviewing billing rules. Sen. Al Franken, (D-Minn.), points out in his filing with the FCC that consumers have very little information when trying to make decisions about cell phone or broadband plans. Cell phone and broadband ads often don’t disclose hidden fees and taxes, nor do they always fully explain the costs incurred for switching mid-contract, usage limits and overcharges for text messages and data usage.
But operators make good points of their own. It’s a tricky proposition. Give too much information and consumers will be so overwhelmed that they’re not going to read all the information in front of them – fine print or not. Give too little, and you risk being accused of withholding pertinent information.
I have to admit, I find most of today’s wireless service pricing as confusing as ever. I would bet the average person does not know how much data is being used when they send a photo or an e-mail.
Still, wireless operators share a lot more information nowadays than in the past, and at some point, it boils down to an individual’s responsibility to do his or her homework when making a two-year buying decision. However, at least one operator made a smart move early this year when it rolled out a $50 plan that doesn’t add on a bunch of taxes and fees. Sprint’s prepaid division, Boost Mobile, says $50 equals $50. Right on.
Overall, the industry can do a much better job in communicating the real cost of wireless services over the life of customers’ contracts. As for those night and weekend minutes? That strikes me as archaic, although it probably serves a purpose in reminding people that there is such a thing as peak calling times when network capacity is pushed to the limits – an increasingly important characteristic of wireless that consumers should be aware in this day and age of data downloads.
Besides proposed FCC rulemakings, what else will the new year bring? Will consumers continue their love affair with smartphones and shell out for the data plans, as many analysts predict? Or will consumers be more likely to pinch pennies and jump on prepaid plans? It’s probably somewhere in between. Given the speed at which this industry works, we’ll all know soon enough.