It’s Time For Wireless Carriers to Get Real Or Get Lost

Mobile-company-logos This past week I spent a few days in Milwaukee WI. If Boston is Bean-town then Milwaukee is quite likely Beer-town. I actually drove past the Pabst Brewery. I didn’t know that they still made Pabst, or that anyone would actually drink the stuff. I took it to be like Lone Star in Texas, just something to offer the tourists.

Initial impression of the suds aside, I saw something in Milwaukee that gave me pause. I saw the signs, and they were worrying.

To be more specific I saw a few of the newer T-Mobile billboards. I still mostly like T-Mobile. And heck, Carly-of-the-patterned-magenta-dresses is certainly easy on the eyes, so billboards should be a good thing…but these were cause for concern.

You see, they offered a new plan. At first glance this new plan looked appealing. It offered “Unlimited talk, text and web for only $49 a month with no contract.” Wow! That seems like a good deal. Having rolled off the end of a two year commitment I’m now on a month-to-month plan at $99/mo for that very same “unlimited” service package, or so it seemed.

I wish I’d taken a picture of the billboard, but I was driving at the time. Here’s the relevant portion of the web site.

T-Mobile-No-Contract-Offer-600

 

It has been said , “if something seems to good to be true then it most likely is.” This certainly seems to be the case with this new plan, because the billboard had some “fine print.” Just below the general description of the service offering, in much smaller text, it described “the first 100 MB at up to 4G speeds!”

What? The first 100 MB? That’s a patently absurd definition of “unlimited.” That’s three episodes of the Escape Pod podcasts that I so enjoy while traveling. It’s less than one evening tethered to my cell phone when the free hotel wifi once again proves to be pointless.

Most carriers offer “unlimited” data but in reality set forth some very real limits. In most cases $40-60/mo buys 4-5 GB of data transfer. Sprint has been the lone hold out, offering a truly unlimited “Simply Everything” plan.

T-Mobile’s approach is to throttle heavy users down to 3G speeds when they crest their monthly data allotment. Others may simply cut your data access. According to Gigi Sohn of Public Knowledge some carriers will actually terminate your account for repeated use of too much data.

When a mobile carriers’ “Unlimited” plan in one breath promotes both a dramatically faster 4G network and a trivially small data allowance there’s something seriously wrong. To my mind it’s time for the FTC to have a serious examination of the cellular industry and perhaps force a return to sensibility with respect to plain-truth-in-advertising.

One of the lessons learned at last weeks CloudComm Summit 4 was that the mobile industry has seriously abused their customers with respect to SMS. It was revealed that SMS equates to $1.4 million per gigabyte of traffic! One not-to-be-named developer in attendance quite correctly characterized this fact as “F@$:@*% obscene!”

How can they one one hand promote high-bandwidth features like mobile TV and video calling, while at the same time penalizing or terminating customers who actually take advantage of the very service that they are promoting?

Some carriers want you to pay extra to tether other devices to your mobile phone. This makes no sense. I pay $40/month for 5 GB of data, what does it matter that the data is consumed watching their much-talked-about mobile TV or syncing files from my Dropbox account to my laptop? That’s truly none of their business. I pay handsomely for the data plan, I will use the data as I see fit.

Then there’s the matter of device count. Why should we pay separately for every device that attaches to a mobile data plan? We have family plans for mobile voice minutes. That very concept should be extended into the data realm.

I may have a cell phone, tablet, netbook and laptop…but that doesn’t mean that I should need four separate accounts to provide mobile data access or all of them. Yes, I know that something like a Mifi can be the means of providing data access for multiple devices, but that’s an unnecessarily inconvenient hack around what is fundamentally a broken billing model.

I recently came to the end of the Sprint contract on my 3G Mifi. I cancelled the account since tethering to my G2 on T-Mobile is both faster and cheaper. T-Mobile does not charge for tethering. The combination of the G2 and their HSPA+ network has been a winning combination.

Vader & iphone Of course, today’s T-Mobile is a pale shadow of the T-Mobile that I once came to admire. They’ve slipped in the annual J.D. Power survey on customer service amongst mobile carriers. It seems to me that they’re practicing at becoming AT&T-like. That’s just so much like little kids pretending to be Storm Troopers, as if that’s a good thing. I suspect that T-Mobile is doomed, even if the DOJ succeeds in stopping the merger with the evil empire.

I wonder if Ralph de la Vega, CEO, AT&T Wireless, is actually the father of Philipp Humm? Search your heart Phil, you know it to be true.

  • vlad

    all very true. they are in the business to make money, which doesn’t necessary be logical. I think eventually someone (starving for clients) will offer a shared data plan, but it will be a while 🙁

    • I have no issue with the requirement to turn a profit, but I take exception with the sort of advertising that leads the pleabs to their economic doom. It’s effectively bait & switch. It’s deceptive.

      The idea of a pooled plan for data is already starting to happen in other places. It will happen in the US, but not until the matter is forced by some kind of market or regulatory pressure.

  • The issue to me is unlimited– where clearly there’s a limit. AT&T, T-Mobile, Sprint, and all are in it for a profit… that’s obvious. At the same time, they also offer and enforce extremely one-sided contracts. But that’s another story… anyway… All of these carriers have heavily benefited from government assistance. Although they may be in it for profit, they also received a good amount of our taxes. They also serve as an amazing catalyst for additional taxes levied on us by cities, counties, states, and federal authorities. Good business will always run a profit. To me, a service is either unlimited or not. Unlimited 4G in huge letters with flat out non-unlimited service is a lie. It’s simply not unlimited. It’s heavily limited and tiered.

    • Yes, but what’s an acceptable definition of “unlimited?” They claim unlimited web. Th actual delivery is 100 MB of high speed data (4G rates) then they throttle it to something considerably less, perhaps as much as 75% reduced performance.

      Does it meet a ration definition of “unlimited” as long as they don’t simple cut your data access? Regardless of how slow they throttle your connection?

      If they throttle you back to EDGE speeds you’re connection would be so slow that you’d likely stop using it for anything much. Technically they’re living by their terms of service, but is that actually fair?

  • It is all about marketing. If you want to treat data like voice, you have to convince the public to start watching their usage. Those who remember the early days of cellular remember that voice per-minute rates were insanely high until everyone started using cellular more and the rates dropped — the price to pay to be an early adopter. The term is called “market skimming” or “skimming the market”. Only a small few care about 4G speeds and the carriers have some major equipment upgrades to pay for as well as may still be “testing” or “fine-tuning” the service so they do not necessarily want millions of 4G users overnight. If they charge sky-high for the service, they help pay down the network upgrade debt, filter out the heavy customer service demanding public, and restrict the elite early-adopters who need or simply want the latest service and kick and scream but still pay for it because there is no alternative. Wait about a year or two, as the skimming slope falls and you will see 4G unlimited offered by every carrier that survives the technology change. Short answer: They do it because they can — deal with it or wait until the service becomes more mainstream.

    • “Because they can” is the direct result of a couple of decades of deregulation taking the teeth from those who would look out for the public interest. The matter of truth in advertising is what bothers me most. “Unlimited” has some meaning that they are bending with exceptions. Truly, in the US it’s time for the FTC or DOJ to step in and force some clear expression of the service being offered.