8/19/2009 1:16:00 PM
Relationship between the consumer and mobile industry is awful
Two questions about the mobile industry emerged for me several years ago and remain unanswered. Why are people so suspicious of mobile phone companies? And why is it constantly ducked by the industry? Andrew Harrison, Carphone Warehouse’s CEO, confronts many aspects of the industry on page 14, and hopefully starts an honest, open debate to see what can be done to change perceptions that frankly restrict the profitability of all segments in the industry.
Harrison will undoubtedly be accused in some quarters of pursuing a cynical Carphone strategy, but many of his sentiments are ones we have repeatedly heard from disgruntled consumers. Much of this has to do with how the industry grew amid the wild landgrab of customers in the late 1990s and early part of the current decade.
There is clearly a legacy issue of consumers accustomed to free phones, bargaining for cheap line rentals and operators now having to manage this expectation with their own financial objectives. It is impossible to turn the clock back, but it is worth taking a moment to reflect on where we are as an industry and what is happening.
Many consumers feel they are being cheated despite the ridiculous value they get. Operators and manufacturers fall into commoditising their products and services (even when new ones appear – e.g. dongles). Operators in particular appear to have been backed into a corner of declining margins in such a competitive environment, and now have to justify tactics such as 36 month contracts and stealth charges, which end up frustrating consumers.
The prevalence of websites offering tips and loopholes for consumers to take advantage of operators hardly helps things. But the current relationship between the customer and the mobile industry doesn’t appear healthy for either party.