Why People Hate Cell Phone Companies

In: Advice By: Brian Armstrong

7 Jul 2007

When did cell phone companies get the idea that making things difficult for their customers was a good idea?

Here are just a few examples of where they went wrong:

Having two year contracts, and extending them at every opportunity. If you have to threaten your customers to keep them from leaving, you’ve got a problem.
Sending customers outrageously large bills when they use too many minutes. Why would you want to punish the people who are using your service the most? They should automatically upgrade you to the next plan, or call/text you to let you know you’re at your limit.
Having way to many service plans, features, and line items on the bill. My last bill had no fewer than 12 line items on it, many of them taxes and fees that I couldn’t explain the purpose of. (Note: Apple, a company that understands this, tried to fix this with the iPhone.)

Each one of these features was probably designed by a well meaning MBA or consultant who did a detailed analysis of how it would improve the bottom line. And they were probably right. Using a two year contract probably DOES improve the bottom line by selling more phones up front (you get the phone cheaper since it’s being paid off over time).

But the problem is that the consumer doesn’t CARE about T-Mobile, AT&T, or Verizon’s bottom line. All they know is that they felt angry the last time they were locked into a plan, used too many minutes, or saw a “Regulatory Programs Fee” on their bill.

Did the cell phone companies really need the government to step in and tell them they should let their customers keep their phone number when switching? It seems like a no brainer to me. If you can provide additional value to your customers with hardly any additional work, maybe you should do it.

Trust your customers and treat them with respect, and they will reward you with far more business in the long term.

Cell phone companies are winning the battle and losing the war with this type of short term thinking, and it’s time they woke up.

What do you think?

6 Responses

Ryan

July 10th, 2007 at 4:57 pm

Brian, you are totally right about cell phone companies in the States. People probably wouldn’t mind being locked into plans so much if the bills weren’t so ridiculous and if the cell phone companies offered decent service. For example, as a guy living abroad now and someone who travels overseas often when living in the States, I wish that American cell phone companies would leave their phone unlocked. When I am in Bulgaria, for example, shouldn’t I be able to put a Bulgarian SIM card in my Cingular/AT&T phone and have it work? Why is my phone “locked” into just their service? That is total crap!

Fortunately, some of the prepaid phone services are finally competitive. Cnet.com has a great article outlining how to go about getting a prepaid phone. Check it out at http://reviews.cnet.com/4520-3504_7-6260217-1.html

Ryan

Brian Armstrong

July 10th, 2007 at 7:03 pm

Ryan, you’re right…locking phones is another big mistake they’re making. Thanks for the info on pre-paid plans!
Brian

Brian Armstrong

July 20th, 2007 at 7:22 pm

David Pogue wrote about this in more detail here: http://pogue.blogs.nytimes.com/2007/07/18/iphoneatt-billuh-oh/

September 4th, 2007 at 11:27 am

As someone who worked for T-Mobile, who was one of the smaller companies back when WLNP (transfering numbers from one company to another) was released, I can say T-Mobile was looking forward to WLNP and benefited when WLNP happened. (Employees got shifted to help the Activations dept.) I was told that before the government mandated that WLNP was to be required, the earlier answer was the WLNP was prohibited. Phone companies were assigned their own NPA/NXX’s (Area code + 3 digit prefixes that follow) and regulations weren’t allowing them to be giving/taking NPA/NXXs that were assigned to other companies. So that’s why nobody offered WLNP before the government insisted it was required.

Brian Armstrong

September 4th, 2007 at 5:36 pm

Good to see another perspective, I’m sure they are not all bad people, thank you!

helicuss

December 31st, 2007 at 2:27 pm

cell phone companies differ no more than any other company, They are there only because they want your money. the more money they can get without going over the compeditors defiantly low price, the more profits they’ll get. more often they’ll offer the phone usage price $15.00-$20.00 lower than the leading compeditor, and highten the connection, or some other line-fee in claiming it’s some other regulated fee that we’ll never be able to figure out without breaking out the all knowing magnifying glass, and a copy and paste legal aid. These companies are all sham, and anyone with a degree in rubix cube, or nintendo can easily spot this out with a dirty finger. you all sit here and try to tell me that one companies better than the other…. NOT. there is no company out there who can honestly say that they care about their customers beyond the slap on the ass as they pass you on the internet around billing time. They all want your money, and they’ll all do whatever it takes to raise the price eccostentially beyond limits as long as the other leading companies will follow, or lead the way. the end….. nothing further!!!

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Why People Hate Cell Phone Companies

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