Was somebody listening or had the time finally come for there to be a fixed price unlimited calling plan? Verizon was the first to break the ice and announce a fixed price deal although it is at a rather steep $100 a month. (I know it is only $99.99 but who are we kidding?) AT&T ever the follower and never the inovator, (though some may claim otherwise thanks to the iPhone even if it was Apple's creation and not AT&T's) followed suit with the exact same offer. T-Mobile then did likewise but thows in texting where the others are charging an extra $20. Sprint/Nextel is the last hold out but there are many that think they will come in with a fixed price plan also but at a lower rate to be competitive seeing that they are losing market share. The guesses for them range anywhere from $60 - $85.
This raises the possibilities of a price war. Frankly I would gladly welcome one. The cell phone industry has had excessivily high margins on essentially a commodity item for far to long. It is the perfect time to introduce competition back into the business instead of the price fixing nature that has prevailed since the early days of the brick.
Granted this latest pricing effort only affects the top 13% of users who have phone bills that top $100 a month and Wall Street is beside itself trying to figure out what the impact will be to the bottom line, but it is a start and I am hopeful that the trend will expand throughout the market and even reach a simple lad like me. I do not own a cell phone as of yet, (see http://farrwestview.blogspot.com/2008/01/there-is-need-for-real-cell-phone.html) but I know it is just a matter of time. It is inevitable. Yes I am a gadget junkie, and yes I like tech, and yes there is a safety factor for a guy that likes to travel, but no I do not like hauling around the electronic leash, that is why I like to travel, and no I haven't needed one for safety reasons in my mumble years yet, and no I don't have to get on the phone the second I get behind the wheel, and no I don't need to talk with my mouth full in a resaurant, and no I don't need to have someone with me when I go to the bathroom, and no I don't need my hand upside my head to make it look like I am sane when I am talking to myself. My wife wants me to have one so it is just a matter of time, nuff said.
With this 'new' pricing scheme, that Cricket started sometime ago and land lines long before that, there is the possiblity for a whole new business model for the cell phone industry. As rates drop the way people communicate will finally be able to break free from the land line forever, and I know many of you have already. Other areas around the world are already there. We just need the economic incentive to make it feasible and then we too can take advantage of the fruits of our technology. This change may be coming at this time because of the talk of a new business model that would revolutionize communication cost by introducing advertising to pay for expenses and thereby reducing the direct charges to the consumers. I have heard that Google was interested in this approach. Maybe talk was enough to spur the big boys into action to stem the possibility. Whatever the reason, bring it on. If the consumer can win back even just a little, we will all be better off for it.
This is Ed Nef with a view from the Farr West.
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