Data caps can we get rid of them?

Changes are afoot in the mobile industry. We’ve been seeing a sea change with how T-mobile looks at their customers. They’ve been changing the contracts and potentially even eliminating them. They’ve separated the phone payment plan from the monthly access fees which is an imortant first step in completely separating the purchase of a phone from the carrier that provides the services. This will eventually reduce the amount of junk files installed because  the carriers can’t force the providers to install them. I think that the reason why the Nexus 7 isn’t on Verizon Wireless is that they are refusing to install the bloatware that the Verizon is trying to force upon Google. I think this is a good thing. Google has also filed a suit against VZW to force them to allow the Nexus 7 on their network. This is going to break the carriers power over the user. Carriers don’t want to be dump pipes for the internet. The wired and cable companies are actively fighting against this by puttng data caps on downloading content. At the same time they’ve experimented with this, the wireless providers have been much harsher. However, these caps weren’t a problem in the past. According to BGR a website that focuses on mobile issues has noted that the amount of data that wireless users has begun to regularly break the data caps. T-mobile has also offered all of their plans without datacaps. This will likely push many data users on verizon and AT&T to switch over to these networks. This will likely put more pressure on the carriers than they have experienced in over a decade. I look forward to this increase in competition especially since I refuse to go over my data caps and greatly limit the amount of data that I use over the wireless networks. I believe we’ll see some interesting changes in the future.

I think that these changes will also preclude the merger of T-mobile and sprint as the US market needs additional competition not less. I think that there will be changes in all of the companies marketing and product offerings, but likely T-mobile will be the largest winner with Sprint in second.

AT&T deal is most likely dead

We all should be extremely happy that this deal failed. Even those that don’t live in the US. Two major US agencies were investigating the eventual impact of a merger between AT&T and T-Mobile. From a consumer point of view what would have been the impact of the merger?

Well, there could be benefits, for instance T-Mobile users will get access to a much larger network. They will have higher quality signal connection in more cities and in more areas through out the US. T-mobile has one of the smaller network area coverage of the 4 remaining cellphone providers in the US. (Verizon, AT&T, Sprint, T-Mobile). AT&T users may get some relief in large cities like San Francisco and New York. It is likely that the combination of the two companies’ networks will increase the total capacity in a given city.

AT&T and T-Mobile claim that not only will these things be better for the customers of both providers but there will also be an increase in investment in the network. However it really doesn’t seem to be the case. Based on their own documents they show that it would actually reduce the yearly investment in the cell networks for the new network overall, reduce the number of employees and likely increase the prices of cell service.

Why is this expected? Well, if the networks are combined there will likely be a reduced need for RF Engineers. These guys are effectively the “Can you hear me know guy” from Verizon commercials. They both design the interaction between the cell sites and look into where the coverage, how much capacity there is for calls/text/data in a given area and if there will be dead spots within their expected coverage area. If a group of engineers for both T-Mobile can cover all of NYC and there’s a group at AT&T to cover the same area, well some of them will have to go.

What about the investment though? Well, if capacity suddenly increases in areas that are cramped for capacity, then there will be less investment. Additionally, if there is excess capacity in areas that don’t have the growth potential for fully meeting that capacity the new merged company would be stupid not to redeploy those areas that have less capacity. This means that AT&T could potentially go a few years without actually buying new equipment to meet capacity demands.

Why would prices go up? I wrote an article about how monopolies at the Urban Times. Effectively, when there are not pressures driving a company to lower prices to attract more customers prices will rise or stay the same. Which will be significantly higher than the costs of the company. With only two other competitors, which most people assume Verizon would buy Sprint, there is little pressure to innovate and keep prices low. Additional the cost of switching keep prices higher too.

Because of these reasons it’s a very good thing that the US government stepped in to prevent this merger. It also indicates that the government is still willing to step in and act in the best interest of the people. In fact, the collapse of this merger could be a good thing for T-Mobile users as the company will get a settlement of $4 Billion. This should be invested in their network and will increase their ability to compete. Another reason we should be happy for this collapse, is that T-Mobile is a very innovative company in terms of adoption of new types of cell phones. T-Mobile has also had excellent customer service compared to the other cell phone providers.