If you keep up with the cellular industry (or mobile industry for non-US residents) in America, you’re probably aware that we are in the dark ages in terms of technological advancements in networks, cell phones, and freedom of choice. Over at CNET, you can view many of the hot cell phones that are available in Asia and Japan. These phones are years ahead of what is available in the US, and if you’re lucky enough to grab an unlocked GSM phone from Asia, good luck having it activated with AT&T or T-Mobile in the United States. Even if you can get one of those GSM carriers to activate the phone, many of the features will not work. Why? Because we’re so far behind the rest of the developed world that it’s a joke.

As many Americans are aware, we have our “choices” of carriers, but none of these carriers can agree on a universal standard of GSM, CDMA, iDEN (going away since Sprint took over Nextel), or TDMA for cell phones. Therefore, we have a network of cellular towers offering different standards, and depending where you live, your coverage can be great or exceptionally poor. Network coverage is a main factor that keeps people with a carrier they may or may not like. If you’re in a rural area, GSM is probably extremely poor in your area. You’re more likely to have TDMA or CDMA in the country or smaller cities. That means you’re probably with ALLTEL, the top rural area carrier. City dwellers are most likely using CDMA, GSM, and maybe iDEN for (primarily) business users. That means you’re with AT&T or T-Mobile for GSM (which works in Europe) and SprintNextel for CDMA/iDEN (does not work in Europe) and Verizon Wireless for CDMA (also does not work in Europe). While choice is a good thing, having multiple network standards instead of one in the US is not good for the consumer. In Europe and Asia, everyone is on the same network standard. There aren’t four to five (or more) network standards, hampering coverage for its consumers. Because there is one standard, such as GSM in Europe, everyone benefits from excellent coverage.

In addition to not having a universal network standard, we are also behind the rest of the world in terms of phone features. There are Asian cell phones that allow people to pay for purchases with the swipe of their cell phones. Downloadable content such as music, TV shows, comics, books, etc. in Europe and Asia is much better, and text messaging (aka SMS) is more advanced. While other nations have been enjoying the benefits of 3G content for years, we’re just now getting some of that functionality in America. Since carriers control the features allowed on the cell phones they sell in the stores, some of the advanced functionality in European/Asian cell phones will probably never see the light of day in America. For those features that do make it, you can bet that your carrier will charge a premium for you to use it.

If you’ve ever had a cell phone, you’ve most likely been required to sign your life over to your carrier for a minimum of one year; two years is standard. I have always had an issue with cell phone contracts with no ability to terminate it without penalties ($200 or more per line). Leaving your carrier before your contract expires is a price many are not willing to pay. In Asia, specifically, you can go to a vending machine or other shops and purchase any phone you want and have your phone activated with any carrier you want. If you hate the service at the carrier, you can leave without any penalties and take your business elsewhere. Because of this practice, it is in the carrier’s best interest to keep you happy, unlike the United States. Here, your carrier can treat you any way they want because they know they have you for at least one or two years. While there are ways to get out of your contract, carriers unfairly lock its customers into a two year agreement. This is mainly because they are selling you a subsidized phone, which is why you can get deep discounts on certain phones or free phones altogether. Most people don’t want to pay full price for cell phones; however, they may be unaware that they are locked down to that phone for a minimum of a year, depending on your carrier. The iPhone, on the other hand, is a different issue altogether. You are purchasing an unsubsidized phone at full price yet are still required to sign a two year contract with AT&T unless you go with the pre-paid service. Sounds unfair? That’s because it is. AT&T should at least offer the option for customers to sign a one year contract especially since the phone is unsubsidized. Since Apple is making the money off of the iPhone, AT&T has to get their money by other means, which is why they are foisting mandatory two year contracts on customers who do not opt for pre-paid.

There are a number of other issues as to why the cell phone industry in America is broken. Carriers are ruthless in their pursuit on keeping a closed platform and keeping third-party multimedia services (ring tones, graphics, applications, etc.) out of their hand sets. This keeps choice limited to what your carrier offers…at the expensive prices they are going to charge you rather than free or less expensive competitors. Cell phone insurance, while helpful, often has hidden information that consumers are unaware of. If you lose your phone or it becomes damage, your cell phone replacement is often “reconditioned,” which means it’s refurbished and not brand new. In addition to paying a $2.00-3.00 monthly insurance fee, you also are required to pay a $50.00 fee (and upwards) to have your phone replaced through your carrier’s insurance partner. Why should you have to pay an additional fee for a phone that’s more than likely pre-used? Finally, there are the infamous contract extensions that occur without your knowledge. You may not sign a new written agreement to extend your contract, but something as simple as the desire to add more minutes to your plan can extend your contract. Some carrier operators inform you of this; some do not. With all of the dirty tricks carriers pull on its customers, it’s no mystery that most people hate their carriers in the US.

In order for US carriers to change their image and provide better service to customers, they must adopt the business models in Europe and Asia. They could start with using one network standard (GSM), eliminating mandatory contracts, and offering more phones that are advanced with increased functionality. Unfortunately, the government is not willing to upset the apple cart (powerful cell phone lobbyists) by regulating the cell phone industry in order to provide better services for consumers. Therefore, that means the US cell phone industry will remain fractured and always two steps behind our European and Asian counterparts.

Posted on Wednesday, August 8th, 2007 at 5:28 pm in the category:Commentary, Life, Play, The Machine. Comment RSS 2.0 feed. Comment it , or trackback this post.