The Globe carried a follow-up "letter to the editor" from the industry group "CTIA - The Wireless Association" (
------------------------------------------------------ THE BOSTON SUNDAY GLOBE June 29, 2008
Letters-to-the-Editor
The fruits of wireless competition
YOUR JUNE 22 editorial "iPhone's false bargain" aires worries that "big companies will . . . keep monthly wireless rates high." In fact, Americans enjoy some of the lowest wireless rates in the world. This is because the American wireless industry is a model of competition, and provides choice and affordability.
In the past 20 years, wireless has evolved from a corner-office luxury to a cultural mainstay for more than 250 million subscribers. Users can choose among more than 600 handsets from more than 30 manufacturers.
Moreover, the cost of wireless voice service - by far the most popular use, available with and without a contract - is among the least expensive in the developed world.
The contract model has promoted wireless adoption and helped Americans access innovative services, while more than 40 million consumers have been able to choose contract-free service. In addition, wireless companies' open-network policies allow customers to use compatible devices whether bought from the carrier or not.
As the marketplace evolves, products and services are being introduced. Each seeks to undercut the others, or provide a unique experience for the user. This competition is the hallmark of the wireless industry.
STEVE LARGENT President and CEO CTIA - The Wireless Association Washington
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It's an interesting business and the wireless carriers have learned something from the IXC "Long Distance wars" of the past decade: whatever you do, don't let your service become an undifferentiated commodity where all you can do is compete on price and race your competitors to the bottom. By offering exclusive hardware locked to their respective networks, the wireless carriers have found a way to avoid the carnage experienced by the LD companies.
There is a certain irony here, because if you look at the advertising platform of the major carriers, they stress their network (ATT: "More bars in more places"; Verizon: "It's the network." etc.) but their stores and web sites stress the specific phones on offer and provide little or no information about which phones perform better on their networks.
Meanwhile, the manufacturers of handsets may be competing on features and appearance, but they remain captive to the wireless providers as their major channel of distribution. (Imagine a manufacturer trying to sell its phone to the consumer at a profit when phones from its competitors are being offered for 1-cent by the wireless providers as sign-up incentives -- especially when the providers will not give the customer any lower rate, even if the customer buys his own phone.)
Just some random thoughts.
Regards, Will The Old Bear