Many moons ago I worked in the wireless business. Fairly un-memorable frankly, except for maybe one thing. I witnessed the fall of the complex, 'sell more through confusion' pricing era. While working for one of Canada's leading wireless networks, an upstart called Fido (now owned by that same network) disrupted the industry North American wide by introducing flat rate pricing. I will never forget: 400 minutes for $40. No weekends, nights or other convoluted restrictions. Just straight up. And the legacy providers were in a panic. This would be the end of margins as they knew them.
Well, 12 years later, wireless operators are doing fine. But, finally, we have more pricing disruption. Verizon - then its closest friends - launch unlimited wireless calling plans this week. It was only a matter of time really, or a matter of who would do it first. It kind of reminded me of the airline business. One offers something, the others follow immediately. How do they know, I wonder, far enough ahead that they even have TV ads ready to support it? Big brother, I imagine.
There has been much debate online about the good and bad of these new offers. As in good for the consumer, bad for the provider. Some would argue otherwise. The best piece I read to date is found here, where Om Malik insists this is a mistake. Om's position is based on the assumption that the providers stand to lose by way of all the heavy plan subscribers - or overage sinners - will smartly change their plans and bid adieu to monthly penalties. Probably right.
On the other hand though, we have the under spenders. Those with the $70 plans who rarely go over. But what a screaming deal for them to spend $99/mth and never again have to worry about overage. And get to tell their friends about it. Is that not an extra $30/mth for the carrier?
It's anybody's guess where this will go. Even for the analysts who will tell you otherwise. But one thing is for sure, number portability is working. After all, back when Fido offered 400 minutes for $40, only those without a phone could brag about their new plan.
Sunday, February 24, 2008
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