Verizon and the Battle for Subscribers
The wireless telecom industry is very intriguing to me. I’ve written about AT&T and Verizon before, and more specifically about the battle for subscribers and the expansion of wireless data network infrastructure.
AT&T has been growing fairly extensively over the last several years primarily due to the cult like popularity of the iPhone, which AT&T has had exclusive rights to from the initial iPhone release.
Verizon is on the verge of releasing the “Droid” Android phone which I hear is garnering great pre-release reviews.
As I’ve mentioned in my previous posts, wireless providers are running out of marketing gimmicks to attract new subscribers, at least as it pertains to phone costs. Carriers are practically giving away high tech and very capable smart phones a la the Blackberry and make their money on the monthly plans. So with the cost of the hardware already at zero, the only other front to wage war is on the plans themselves.
This is where Verizon, specifically, is starting to reveal it’s elitist mentality.
In an article over at The Wall Street Journal, Verizon CEO Ivan Seidenberg said that while T-Mobile rolled out new low cost plans over the last weekend, his company had no intentions of doing so.
Verizon does have great coverage, and for those who need to be connected anytime all the time, they may be willing to pay a premium for the service. The average Joe I suspect, will still go with the low cost provider. Coverage at the big carriers is so widespread and evolving so quickly that service and coverage are starting to come to parity. With that in mind, the last competitive advantage is coming down to price.
And Verizon is losing.
To me, it seems a bit arrogant that Verizon doesn’t want to respond to T-Mobile’s new pricing plans. They’re losing the market to AT&T through the iPhone popularity, and while the Droid may be great, it’s going to come at a hefty price.
And I don’t mean for the phone.
Sphere: Related Content
Loading ...
Verizon can do what it does because ultimately they care a little less about the consumer market and more about the corporate market. Most consumers want good coverage, but primarily good coverage where they live. As result Verizon’s great nationwide coverage is actually not that big of deal. However for a corporate customer, nationwide coverage is critical. Verizon is still really out front here especially in terms of data service. AT&T is second, and T-mobile and Sprint cannot even compete. A large business customer is scattered across the nation, and usually only support or want to support one provider. Plus business travel is across the nation.
I’m no fan of Verizon, but they do know what they’re doing, and they are evolving. One of the biggest gripes about Verizon from more techy users has always been the lack of good phones or cripping of the phones they did support. The new Droid phones are a step in the right direction.
I think both AT&T and Verizon realize that if they were to compete soley based on service, price is the only game in town. However, if they compete on phone products they know they can latch onto branding of the phones. AT&T has already hooked it’s star to Apple, and I don’t expect AT&T to give that up. Verizon is trying to do same thing with Droid…
Hey Dong,
Good points all around. I guess the only place I’d disagree is that if Verizon and AT&T compete on phones, then locking people in to 2 year agreements really runs against the grain.
Personally, I’d like to pay full price for the phone and forgo the contract. But that’s just me.
Thanks for chiming in.
Grant
nice post. it really does seem like the phone technology is becoming more level amongst the providers. i still have a plane-jane flip phone, not ready to tie myself to an all-doing ’smart phone’. i’m sure one day i will step off the edge and purchase one of these gadgets, and hopefully by then the phones will be the second factor of my purchase, first being my monthly rate. right now i’m perfectly content being away from email, quotes, weather, scores, and all the other impulsory features these phones provide…because i know it will all be available on my laptop or pc at home and can digest all of it at once and move on with my day (i must preface i’m not corporate and for work i’d rather talk to an actual person than be involved in a series of emails). don’t get me wrong, it’s pretty cool to be sitting in a bar, i.e. 2 hours ago, being able to look up ku’s and mizzou’s bball schedule on my buddies iphone, thus the beginning of a conversation/argument that leads to betting/shots with the entire bar. but, for the time being, i will always know someone who has a smart-phone…kind of like friends with boats…better to know a person who has a boat than to have one yourself…