T-Mobile Turns An Industry On Its Ear
nytimes.com
nytimes.com
I personally have nothing but respect for T-Mobile. It is hard to change fundamental things such as pricing when you are such a large corporation. Doubly hard if your competitors have successfully proven contract pricing works.
I hope T-Mobile continues to innovate. The telecom industry is overall a dinosaur. What keeps them alive is their infrastructure and rights of way. If we ever get a wireless alternative that is as fast as fiber (and easily deployable) we'd see the end of traditional telecoms as we know it.
I mean some of their policies like paying the early termination fee for the customers is a bit too aggressive but most make complete economic sense and they shouldn't incur a loss by applying them.
If they are they probably need to take a second look at their organizational structure.
Like every Google Fiber set top box being a wireless access point accessible to other Google Fiber customers, as well as free to Android users? And Google using their fiber right of ways to deploy 802.11ac or picocells?
Only in my dreams sir.
I'm not sure about the Android part, just because it would be almost impossible to prevent someone from running all connections in a house through an Android device and get free internet.
Granted, I did this with an old Galaxy S (it ran upwards of 80°c), which has its antenna and power supply right beside each other.
There's a provider (Shaw) doing this part in Canada: http://www.shaw.ca/wifi/
He's probably not wrong. T-Mobile got a huge boost in the short term from all the cash and spectrum they got as part of the breakup of the merger with ATT. It was a whole year of CapEx ($3-5bn). That let them build out a kind of competitive LTE network. But that's a one time thing. If they continue to lose money, they won't have the capital to play the LTE+1 game.
A provider who can cut your service off immediately for non-payment and charge you to cancel your plan, BUT which cannot be penalized for shitty/failed/falsely advertised service is lead by criminals.
Contract pricing, with termination fees and terms which do not allow for reciprocal credit for failure to provide the contracted service (i.e. without an SLA) should be fucking illegal.
"Fix this, or I'm gonna walk."
"Suuurrre you are."
"No, really."
[go to other end of the mall to the T-Mobile store, talk to sales guy -- who frankly almost got me to switch right then. Walk back to AT&T anyway.]
"Hey, do you want me to still be your customer?" [Wave quote]. "You decide. Ten, nine, eight, seven..."
"Okay, okay!"
I hate dealing with phone sales worse than I hate buying a car.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-11-1955...
Last week the T-Mobile CMO announced a nationwide campaign in which existing and new customers could turn in any Blackberry and get $200 towards a new phone (it was a response in regards to the CEO of Blackberry blasting them the day before).
I had just switched over to T-Mobile a couple of days before (so that I can upgrade phones whenever I want with their Jump program) and gotten $0 for my Blackberry. Usually I don't bother but this time I wanted to carry out an experiment on T-Mobile's customer service and see if I could get them to retroactively honor the Blackberry deal.
Long story short, I twitted their CMO (I'm nobody on Twitter) and he got back to me within 30 minutes. The next day I got a call from T-Mobile's corporate that my account had $200 in credit!
Now, I'm their number one fan.
Someone I knew was in a similar situation but, unlike me, was in a hurry. They _overnighted_ him the sim card for free.
In short, I moved to a new state and my house appears to lie between three misconfigured towers. Multiple phones, multiple models repeatedly dropping calls and texts. Diagnostic app showed phones constantly hunting between towers. T-Mobile customer service abysmal--their motto seems to be FOAD.
Finally paid the $800 termination fee to be rid of them. Both StraightTalk (ATT network) and Verizon work perfectly at this location.
The moral of the story is not that T-Mobile sucks (though they do). Rather, never, ever enter a multi-month agreement with a cell carrier. They are simply not to be trusted.
Perfect. The only bad news is that AT&T won't allow it. I talked to them. My phone is locked until later this year. No, they won't unlock it yet, even briefly. Despite the fact that I'll still be paying the full monthly contract fee I agreed to, the fee that is paying in full for my subsidized phone, any additional service I might want to add must also be purchased from AT&T.
"Sir, I'm afraid your only option is to choose one of our Global Plans, beginning at $1.50 per minute...."
I obviously need to do more research so that the moment my phone is unshackled, I'll know where to run with it.
Of course I'm dreaming of the day when all the lumpiness will smooth out and in most countries you'll just use whatever devices you like to connect to the ubiquitous Internet. Just an international data subscription that you use for everything, everywhere. Talk, text, TV, Web...are all just your favorite apps (plus subscriptions to content from millions of competing producers.)
<sigh> While waiting for utopia, I guess I'll have to figure out the wifi situation in downtown London.
That might not pencil out on its own terms because you're relatively close to the end of your contract, but I think that would take your phone out of subsidy so you can unlock it. The added flexibility while traveling might make the switch worth it.
More important is for me to figure out how to buy mobile hardware / service from now on. Will it be easier if I switch to Android? If I pay full price for the hardware up front? If I use something like Google Voice or something newer and better? Or what?
I don't know, but one way or another I need to figure it out.
If you just need data, you can get a mifi for about £50 for the device and 1G of data. Before you get one, check if they will support VoIP - then you can use Skype etc.
ATT covers 280m people with LTE versus T-Mobile's 210m. Note the number of posters here saying they'd switch to TMobile if coverage was better. Anecdotally, on the east coast between Phila and DC, TMobile is good in the major cities and along thebhighway, but useless in many suburbs. Of course, ATT also spends more in a quarter on CapEx as TMobile does in a year.
It's quite possible that traditional telecom regulation is ill conceived. Rural build out requirements are effectively a tax on providing service in urban areas used to subsidize providing service in rural areas. It's government interference in the market -- and maybe that's necessary to get what we want, but we should at least admit what we're doing so we can properly evaluate it.
In particular, if we want to have a subsidy for rural build outs, that doesn't automatically mean the money should come from telecommunication customers in urban areas. The premise itself is that telecommunications service is something good that we want to promote and make more affordable, so making it less affordable for urban customers in order to subsidize rural customers is robbing Peter to pay Paul. If we have to rob somebody then we should either rob somebody we don't like (e.g. tax cigarettes or gas guzzlers) or the money should come from everyone equitably via a tax on general sales/income/etc.
"Traditional telecom regulation" implies that we can't have gigabit fiber in New York City (population density ~27,500/sq mi) until it is cost effective to also install it in Loving County, Texas (population density ~0.1/sq mi). That seems significantly less desirable than, for example, setting aside a fixed amount of subsidy each year and dividing it between each carrier based on the number of citizens newly served who were not previously served at a given class of service. That way the market works and the most efficient markets are not delayed (i.e. NYC gets gigabit fiber right away) but as the low hanging fruit is picked and the number of new residents offered service per year decreases, the subsidy per each newly served resident increases until the subsidy for installing service to the last unserved resident finally exceeds the cost of installing the service.
Outside of major metro areas T-mobile coverage can be next to nothing. T-mobile only has 2G data here while AT&T, Verizon, and even Sprint have 4G coverage.
I'd love to move to their service and save some cash but it's just not possible.
This is how the rest of the world already works.
I buy an iPhone direct from Apple and then pay ~15USD per month on service with no contract.
Look at how large parts of the world already deal with healthcare, and witness all the vitriol and anger against Obamacare which moved the US closer in line with with most other developed nations.
The US market has serious issues dealing with progressive change, due to massive corruption and regulatory capture.
So here's what i understand about the industry prior to TMobile's "innovations":
- You buy phones from the Cellular service provider, which are bundled with the service (hence apparently higher bills)
- Since the phone is bundled with the service, i assume even if you don't use the service you still pay a good amount every month.
- You have a contract with the Cellular service which forces you to stick with them till the term of the contract.
- So its usually painful to switch carriers (breaking fee etc). (Do you get to keep your old number if you switch?)
- Since you are stuck with the cellular service they can pretty much charge you whatever they want during that time. Sure they gotta give you an incentive to renew the contract but as i see it the competition between carriers isn't that much.
Now here's how things work in my country:
- You buy mobile independently and then pay for the service
- You pay the service typically below 3USD for most users. And it depends ENTIRELY on your usage. No usage = zero payment.
- No contracts with the carrier. You get to switch at the drop of a hat.
- Thing is, cellular services mostly "prepaid" (post-paid is available but few users go for that). So you just pay the service in advance what you think will use and that is credited to your account. This doesn't expire for several months so no worries about over-estimating.
- So switching a service = getting a simcard of that service, adding balance to it (which you can from any corner store).
- Oh they even let you keep the number provided by the old carrier so virtually no switching costs.
- Hence the competition here is unimaginable! "Price war" would be an understatement. They even keep giving incentives to inactive customers to plug in their old sim cards.
- Its so freaking affordable people buy multiple-sim cellphones so they can use multiple services at the same time (hence utilizing best of each provider)
It isn't that bad. They can't charge you whatever they want, your plan is locked in, and if they change it you can leave without penalty. For whatever reason you leave, you can take your number. Pre paid plans are available as options.
Nothing forces you to stay with a carrier. The penalty is just recouping some of the unpaid value of the phone. You owe less as time goes because you are paying back the value of the phone through your contract.
PAYMENT = PRICE_OF_SERVICE + (PRICE_OF_PHONE / CONTRACT_DURATION)
I know this is a "naive implementation", but the problem is they would never take off the charge for the phone even after one had paid it off and that they didn't tend to have transparent billing so you wouldn't really know if/when you had.
The justification for higher contract rates was because they were using that difference to subsidize new phones whenever you signed a new contract. So, 80 bucks a month for basic service and a few hundred MB of usage.
The problem was that after the 2 year contract ended, when they supposedly were able to recoup the cost of the original phone subsidy, your rate never changed. You'd still pay 80 bucks a month, even if you were happy with your current phone.
T-Mobile's change, much like the rest of the world, was to break out the math explicitly like you show. Then once you've fulfilled the (PRICE_OF_PHONE / CONTRACT_DURATION) term, it would simply vanish.
The exact same government agencies that are being praised for their pro competition prescience allowed the market to become an oligopoly between 2000 and 2010.
Side note: nytimes's website on mobile is totally annoying. No pinchzoom and double tap mucks with the font size. Just as we had Flash blockers back in the day, I look forward JavaScript blockers.
just another way third parties found to take the advertiser money and not pass it down to the publishers.
Yes, the whole web sucks now. What you need is a user-agent that chooses to carefully not implement some of its stupidity.