Carriers Respond – Why Now and Not Before?

The first carrier to respond was Boost Mobile, an MVNO and surrogate for SprintNextel Communications. Plagued by a fragile distribution and antiquated network, Boost sought to gain the upper hand by lowering its rates, attack ads and improving dealer compensation. Operating in the red, the company leans heavily on Sprint for subsidy and although they have migrated some of their handset offerings to the CDMA network, it is obvious that they are unable to compete with MetroPCS’ Value, so they resort to smears and even libel. Consumers have simply found out the hard way, buying expensive handsets that are unable to render a webpage designed for mobile phones… 

T-Mobile was the next company to acknowledge the Change in the Wireless World that MetroPCS brought to the Northeast. They attacked MetroPCS on its coverage, yet they really boasted very little in terms of coverage in Boston and Providence’s neighborhoods, again, the customers disregarding the noise tried MetroPCS (The MetroPromise is superior to any Carrier’s return policy). T-Mobile used inaccurate maps and then soon enough found out that MetroPCS’ coverage is now superior to its own. Oops, time to use another angle. Now they try to ignore us (and Sprint!) and attempt to situate themselves next to Verizon Wireless and AT&T. Their most recent attempt has been to lower their plans and raise the price of handsets. Slick.

The larger carriers have only recently attempted to “lower” their prices… if lowering is offering unlimited voice for $69.99 plus taxes (so really $80 plus dollars) surely they jest! Adding unlimited text brings the customer to $89.99 plus taxes or over $100 for less value than what MetroPCS offers for $40. Period.

Why did have they delayed in offering better plans? Why have some even raised their cancellation fees for certain products like data (internet accessible handsets)? It seems you get penalized and still they demand you sign a contract. Really?

It seems that carriers waited and overcharged their customers as long as they could. Afterall, people in New York and Boston could not use MetroPCS so until then, they gouged customers at their pleasure and it was only when MetroPCS showed up in the Northeast that some executives started seeing their eroding subscriber growth with worry. MetroPCS succeeded in changing the wireless world in more ways than one. Witness the recent onslaught of MVNOs that have been launched in an effort to counter MetroPCS. Yet, MetroPCS is not an MVNO, we own and operate our own network, we have thousands of dedicated stores and trained employees that cater to customer needs unlike an MVNO that relies on gas stations and peg hooks to sell their wares and good luck with any help in getting started or understanding your charges.

Customers were betrayed by the old carriers. They talked about savings while gouging their subscribers. Now, with a predictable monthly amount, all taxes included customers opt for this and not the tenuous definition of unlimited that TMO, AT&T and Verizon attempt to embrace.

Wireless Paradigms are Changing

Getting That Bill A Month Later: The Shocker

For years wireless customers in the United States (and even Canada) have been saddled with two-year contracts in exchange for the proverbial “free phone” or a handset at a lower price. With plans starting as low as $39.99 a month (plus taxes) for 200 minutes or so, customers thought they had enough and did not bother with the $0.40 per minute surcharge – nor did the sales rep.The glee of getting the sleek new handset overcame their senses (and make no mistake, cell phones are an emotional purchase in a very large measure) and they gladly signed a contract and vaguely understood the charges that they were being assessed.The customer left the mall with their handset and immediately started calling their friends with the good news about the “deal” they received.

30 Days Later

The bill arrives.

Not unlike some of the older commercials the customer is seen screaming at the sight of a multi-page bill filled with endless line items marked off at varying costs in multiples of $0.40.  Stories of $2000+ cell phone bills abound. Most of us know a bewildered parent that was caught off guard by their child’s arrival into teen-hood after receiving their first wireless bill that gleefully detailed over a 1000 text messages charged at $0.25 each and being stone-walled by the carrier when they went to the store to complain about the $250 plus hefty taxes in overages. In tamer situations, nobody explained that charges are prorated and that there was an “Activation Fee”. The first bill stated at $69.99 without overages exceeds $120.00 when all is done, and yes, you must pay it if you want to keep that handset and that cute phone number you just printed on your business cards.

An Industry Standard

This customer abuse continued unchecked as wireless carriers invoked the “Subscriber Agreement” and only savvier customers figured their way out of those agreements. Muddying the waters more are the agreements customers are not even aware they are signing when they go an authorized dealer. This additional (subrogate) agreement protects that dealers’ commissions in the event the customer decides to cancel their contract prior to the two-year term. Added up, the leverage of being stuck in collections with a $400 (and sometimes more) bounty on your head weighs heavy on your choice of “switching over to XYZ carrier”, multiply that by spouse and kids and you could be paying a couple thousand dollars to escape from a service you now utterly hate. Some people (with money to burn) gladly do it, others stop paying the bill and contract wireless carriers sell the debt to a collections agency smearing their credit if things are not resolved.

Change is Good – Good Change is Better

On February 4, 2009 MetroPCS Communications (PCS) launched two very important markets to complete its northeastern presence: New York and Boston. For other wireless carriers it was, without engaging in excessive hyperbole, a cataclysmic event.

The carrier – dismissed as a “regional carrier” had invaded the populous eastern corridor and now had a national presence expanding from Coast to Coast. What was even more apparent, as stores blossomed up and down the Five Boroughs, Boston’s 18 neighborhoods, Providence RI, Manchester NH and Massachusetts most populous cities outside of the Hub was that many customers were breathing a sigh of relief. They knew the brand, they had family in Florida that had it and loved it. The time of reckoning for the post-paid (contract binding) carriers had come.

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