An unholy telecom-OEM union U.S. wireless phone customers have for years received shoddy service from their telecommunications service providers, many of which seem more intent on squeezing additional income by whatever means possible out of the subscriber than through exemplary service. Compare U.S. mobile service to what’s available in Western Europe, Japan and even China and it quickly becomes obvious that we trail these regions by miles. The complaints from customers are numerous, including substandard phones and limited features but I will deal here only with the most galling, which Apple Inc. with its iPhone is helping to perpetuate.	Bolaji Ojo Business Editor
Most service providers offer phones that are locked into their individual networks, which means customers must purchase a new phone—in addition to signing up for a minimum one-year (but typically 2-year) contract.—each time they switch provider. Over the course of the last ten years or so, I have personally switched providers several times, ending up with many fairly new but no longer usable handsets in drawers at home. Aside from the wasted resources, I have no reasons to believe this practice has resulted in increased customer loyalty. In fact, it has probably made many of us furious about being forced into relationships we detest and for making unnecessary expenditure on unwanted phones. Apple’s iPhone perpetuates this terrible disservice to customers and the company can only expect a black eye from this. It is disingenuous of service providers and their equipment suppliers to imply that customers aren’t willing to pay the full cost of the phones. We are, as demonstrated by the thousands who first purchased Apple’s iPhone. The service providers love the predictability of their subscription income and locking the handset to their networks secures this revenue flow for the life of the contract. The payoff for OEMs comes from guaranteed high-volume sale of cheaply made equipment through service providers. However, by locking its iPhone in the United States to only the AT&T network, Apple leaves out sales it could make to the millions of potential customers who might wish to dump their current handsets. Arnie Berman, an analyst with SG Cowens says this unholy union between the service providers and the OEMs is unraveling. In a report, Berman notes the following practices that he said pitch customers against their service providers” “The 4 major wireless service providers in the United States – Verizon Wireless, AT&T, Sprint Nextel and T-Mobile – all engage in a long list of anti-consumer practices. These practices include the intentional omission or crippling of handset features that the major handset makers offer in other geographies – and that U.S. consumers would like to have. The service providers also intentionally restrict the abilities of mobile Internet users to go where they want to go and do what they want to do on the web. The dreaded fear of becoming a “big dumb pipe” has prompted Verizon et al. to pursue a strategy of defending the ring tone and texting revenue streams from the threat of ‘open access.’ Operators have favored a policy of restricting mobile users to a walled garden Internet experience in the belief that this approach maximizes revenue. However, this belief is newly under siege –and likely to become significantly more so.” I hope he is right. Posted by Bolaji Ojo on Oct 16, 2007 09:21 AM in OJO-Mojo Tech Report

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