August 27, 2014

Consumers Will Emerge Victorious in War of Providers

It’s been said before that 2008 will go down as the year of the mobile device. Cell phones are getting smarter every generation and the rate of adoption is skyrocketing. Many of the smart phone buyers will probably tell you that they never pictured themselves buying one. Why is this happening? What has spurred this trend? One can’t really point the finger at one particular reason as it’s a combination of many things happening in the industry.

Everyone knows that customer satisfaction is what drives people to buy or use certain products and services. Now, more than ever, these satisfaction rates are climbing. There are three things that have happened over the last year within the cellular industry that have started changing things forever. Commitment to being open, pro-rated early termination fees, and the price war of 2008 are going to be looked at as the events responsible for the sea-change.

Lately each company seems to be mimicking the next, afraid to get left behind. After all, if 3 out of 4 companies are providing something you’re not, then your customers will be looking to go elsewhere. Taking a look at what Sprint did two weeks ago with their announcement of the $119 unlimited plan. While I am not an expert in the field, I can still add a few things up. Sprint was essentially forced to do something dramatic to keep from hemorrhaging customers. Maybe by dropping their prices and offering something so unique, people will forget their less than stellar customer service.

Sadly, that idea will never come to fruition as Verizon, AT&T, and T-Mobile all announced similar, if not better deals within a week. My thought is that Verizon and AT&T made the plan announcements just because they’d rather not be beat at a game they are currently winning. T-Mobile is in no position to jump Sprint anytime soon if things continued at current pace so maybe that is why they were so aggressive in their plans to offer unlimited calling and texting for $99 a month.

How will Sprint combat these other plans? The latest rumor is that they are considering a $60 unlimited calling plan. This could not come at a better time as early termination fees are set to be prorated if they are not already. Customers will be able to switch carriers without that $200 hefty cancellation cost. The burden to retain customers gets heavier every day.

By offering an open network, users have the capability of switching to other carriers without being forced to buy a new phone. On top of that, they don’t have to wait until their 2 year contract is up. It’s not out of the realm of possibility that you could be switching providers every few months. That is at least, until the dust settles a little bit.