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fiberguyMy views are my own.Premium
join:2005-05-20
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1 edit | reply to JazzJRabbit
Re: I really wish I had a few billion laying around for Correct... and also not possible becuase he'd be stuck with that network for many years to come while others, who are charging more, would be able to continue to upgrade their networks..
While it sounds nice to offer that kind of service, as a consumer, it's not so easy to sit there and say they'd allow totally open access for $35 to $50 a month for very long. He'd soon find out how fast that network would become overloaded.. customers would be complaining.. he'd not be able to build a nationwide network.. upgrade to new technology.. etc etc etc. They'd be doing it now already.
It's easy to arm chair as a consumer, but when the pen hits the spread sheet, the reality hits...
"Dumb pipe".. more like "pipe dream".. 
Boost, to this day, is the only network that comes close to being a nationwide flat rate carrier.. and that's because that network was built out under a per-minute plan model and was able to expand. However, Nextel will never grow.. it will never expand, and eventually it will reach capacity issues again. As it ages, it will be expensive to keep up, etc. At some point, that network will become de-commissioned, and those users will be migrated over to Sprint's CDMA network or their next-gen, if they really build one out.
Further, he says "buy your own phone".. um... how fast is the Google Nexus flying off the shelf? People don't want to pay full price for phones, that's why they take the deals with contracts and ETFs attached now as it is. Otherwise, they'd be buying phones at full price knowing they could leave when they want. Consumers already have some of these options available to them, and they don't take them.
Also, if this kind of service was possible and profitable, which it really isn't for sustainable long term growth, then carriers like MetroPCS could be killing the competition. The fact remains, with out contracts, and low "all you can use" service plans offered, there is a reason why carriers like Metro aren't nationwide yet. They simply don't have the revenue stream to build out, nor can they really count on what their customer base will look like from this month to the next. Having customers in contracts and ETFs for discounted phones give the large carriers a good idea for forecasting their revenue. The realize that they have customers for X amount of time and are less likely to leave that contract becuase of the $200 fee for breaking. So, they can count on what revenue to expect over the next 24 months. Month to month carriers can't do that. | |
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| said by fiberguy: ... and also not possible becuase he'd be stuck with that network for many years to come while others, who are charging more, would be able to continue to upgrade their networks.. ... "buy your own phone"... People don't want to pay full price for phones, that's why they take the deals with contracts and ETFs attached now as it is. Otherwise, they'd be buying phones at full price knowing they could leave when they want. Consumers already have some of these options available to them, and they don't take them. ... if this kind of service was possible and profitable, which it really isn't for sustainable long term growth, then carriers like MetroPCS could be killing the competition. ... Having customers in contracts and ETFs for discounted phones give the large carriers a good idea for forecasting their revenue. ...Month to month carriers can't do that. I don't see a lot, factually, to disagree with there fiberguy. What I would add though is a questioning of some underlying assumptions.
1. It's not possible for a "dumb pipe" carrier to win because their established, vertical, revenue-forecasted, deep-pocketed rivals would drive them out of business by undercutting the newcomer's pricing strategy during the phase of their business when fixed costs are constantly increasing but revenues have not caught up. In other words, as technology businesses mature, the barriers to entry get higher all the time, which favors incumbents. The cost of capital is so high that it does not make sense to challenge the status quo.
So even if the dump pipes could charge a reasonable rate that allowed for R&D, expansion, and obsolescence, it really wouldn't matter because the established carriers don't have to cover startup costs that they bore when capital was cheaper.
2. Since subsidized, locked phones are the mode, there's no advantage to buying my own phone if I get no break on the monthly rate and I can only use it with one or two carriers. The easiest example of course is the iPhone. I pay $500 or $600 or whatever to own the phone outright. Now I can go to AT&T, no one else, and pay them $30 a month for data and $40 a month for a bucket of minutes. With month-to-month, I can leave any time but then I just have a $500 doorstop. Or I can pay them $70 a month and get the phone for $99. Then I just pay a big early termination fee if I want out of the contract. If I figure my costs over the first two years, I pay more by buying the phone outright.
However if I could buy any phone and take it to any carrier, I could hop around as much as it would make sense to pay setup fees to get lower rates on the services I want.
I agree that the market is divided very cleverly so that carriers cannot (yet) make a business case for doing anything but operating as they do now. In other words, they are making money and they don't want that to change.
So any disruption is likely to help consumers, and to that I say, bring on the dumb pipers. Most will fail but if they give any significant number of people an inkling of how things could be, that's more likely to happen some day.
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| reply to fiberguy
Sprint is already moving Boost Customers off the iDEN network. The BlackBerry Curve on Boost is powered by the Sprint CMDA network and NOT the iDEN network. and for $10 more a month, it's worth getting the BB for a better network; especially for data.
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