Skip to comments.The $10 Phone Bill (Or A Free Market Strategy In Action)
Posted on 11/10/2009 10:55:17 AM PST by Dysart
The $116 billion business of selling cell phone calls in the U.S. faces a long, ugly decline. That petrifies just about everyone in the industry except Roger Linquist.
With his gray hair and grandfatherly demeanor, Roger Linquist hardly seems like the kind of guy to kneecap a $116 billion industry. Yet the 71- year-old chief executive of MetroPCS cheerfully and brazenly promises to do just that. He aims to bring down the lucrative business of selling cellular phone calls, a business that for four decades has grown bigger and richer with every passing year.
MetroPCS, which Linquist founded 15 years ago, is now the fifth-largest cell phone network in the U.S.--a distant fifth behind the giants that dominate the business: Verizon, AT&T, Sprint Nextel and T-Mobile. Linquist argues that his upstart company's $3 billion in revenue and 3% market share give it the freedom to remake the industry. He means to help turn cell phone calls into just another cheap digital commodity, the same fate that has already befallen the rest of the phone business and doesn't much care what happens to his giant rivals in the process.
The Big Four are scrambling to offset any drop in calling revenue by shifting their focus to new wireless opportunities. They are just beginning to spend tens of billions of dollars deploying new "fourth generation" cellular technology to greatly expand their data-moving capacity and make all sorts of new wireless devices possible, from e-books to dog collars that let you track Fido's whereabouts. Linquist just signed contracts to buy the same 4G technology for a very different reason: He plans to use it to radically improve his ability to carry phone calls--and do it much more cheaply.
(Excerpt) Read more at forbes.com ...
Here is an example of true capitalist taking on dominant market players with what looks to me like a winning vision for his company. If he succeeds he'll drop pricing across the board and capture a goodly share of the market. No doubt he will face regulatory obstacles and entrenched sacred govt cows but this is how it works in a free world.
Newer, smaller, faster, cheaper, more efficient,............none of these words apply to government................
This is the best news I’ve heard all day.
I’m all for getting off AT&T but I’m not giving up my BlackJack 2 that the no-contract offerings don’t support.
A niche mkt for upscale services will remain...but it might also drive that pricing down as well.
I hope he succeeds. I love to see the free market at work. The big companies have worked together to put the screws to us for a long time, keeping their prices artificially high. Now, hopefully, the little guy will come along and wreck the whole thing. You, the consumer, will benefit.
Cellular is ridiculously priced, and they make you think you’re getting a bargain by keeping minutes you’d never used to begin with. How many people have hours of rollover minutes that they’ll never use? Do you know of a single provider that will give you CREDIT for those minutes? Nope. You paid for them, but you didn’t use them. You can’t get your money back.
What a ripoff. Worst part is, it is a market largely driven by CHILDREN. Unfortunately, otherwise sane adults who exercise fiscal responsibility become unable to say no when little Johnny wants a cell phone with all the bells and whistles. Heck, most kids have MUCH nicer phones than mine.
When data and voice is treated the same (as it should be) AND, is priced like a commodity, then I’ll get one of those snazzy, do-it-all phones. Until then, I’ll stick with my cheapo TracFone. It makes calls as well as any of the others.
If everyone else had the same self-restraint, the prices would have come down a long time ago.
MetroPCS isn’t for people who travel a lot, but for those who don’t intend to leave their admittedly limited calling areas its awesome.
Yes they do have mobile internet and stuff.
No minutes, no calling circles, no fives or whatever.
Check out Virgin Mobile’s pay-as-you-go plan at WalMart. From 5c/min to 10c/min depending on how many minutes you buy at a time.
I gave up over 10,000 rollover miutes when I left AT&T for the cheaper TracFone. When I asked them for a cheaper plan they said I already had their cheapest plan. AT&T was costing me $75-80 a month for it's 2 line $59.99 a month plan.
With TacFone double minutes I only need to buy air time every 4 months. Over a year's time I figure I'll save at least half over AT&T.
I think that his business model does not fit the current market.
The booming growth is not grandpa just wanting to make a cheap phone call. The growth is in high data bandwidth services. Smart phones are quickly eclipsing the standard cell phone.
The infrastructure is not in place and it will be years before the bandwidth squeeze is met with adequate capacity. Until then, he will not be able to compete in the smart phone business.
If he takes the shrinking market of voice only service, he may actually not really affect the bottom line of his competitors at all.
Fairly new Metro PCS customer here and so far so good. My old carrier Alltell was gobbled by Verizon and the pricing was just out of sight compared to Metro. The kids I put on Net 10 prepaid. They get 150 minutes a month for $7.50 a month and that includes the phone. It is no longer worth the two year contract just to get a phone the prices of phones are actually reasonable now.
I’m not sure you’ve(and others) had time to read the entire article. There are two pages. Open source, open access, micropcs’s cost leadership position, voice revenue mkt domination and internetwork hopping, metropcs’s buying into 4G network heavily (those who use will be charged)...it’s spelled out quite logically and persuasively by a longterm telcom analyst and CEO. It deserves more consideration, I think. I’m buying it.
I’m not a metropcs customer but I’m betting you won’t recognize the company in 5-7 years.
I had a Virgin Mobile phone once. Living in rural West Virgina, it wouldn’t get service anywhere in my home county!
Needless to say, it went back.
My wife and son and I all have phones on their AutoPay plan. We all got phones that have the Double Minutes for Life option. My wife gets 100 minutes a month (50 min doubled). I get 60 minutes a month (30 min doubled) and my son gets 60 min a month (30 min doubled). They’re added automatically, so we have to do nothing.
Our phone bill for a month on all three is less than $25 a month. I never run low on minutes, but when my wife does (haha!) she just grabs my son’s phone instead.
All three phones can text, and I can even do limited email type stuff, but none have web, chat, or anything like that. Not that I wouldn’t like that, because it would be so awesome to browse Freerepublic from anywhere I was. I’d also like to tether my phone to my Netbook to share the connection....
Alas. Someday, when the price drops. If only more people were like me!