Why do mobile carriers sell phones with a subscription? My roommate and I were debating this the other night. Most other popular electronics devices aren’t sold this way. Cable and satellite companies don’t sell televisions with their video service. ISPs don’t sell laptops and desktops with their Internet service. Bundling phones with mobile service subscriptions is pretty unique. (The only mass-market analogs I can think of are satellite radio and GPS service.)
Why might this be? Continue reading →
“All this top-40s music sounds the same.” I think we’ve all heard this sentiment. The nature of regional radio broadcasting almost requires a regression to the mean in musical tastes. A radio station cannot be all things to all people. I suspect most people will be surprised to learn that some of the most innovative radio broadcasts are taking place at hundreds of stations across the country—and only few people can listen to them. These stations, known as low power FM (LPFM), carry niche programming like independent folk rock music, fishing shows, political news, reggae, blues, and religious programming. (And one station in Sitka, Alaska consists entirely of a live feed of whale sounds.) Continue reading →
There’s been a resurgence in interest in non-contract (prepaid) phone plans and MVNOs in tech reporting lately, which makes sense given recent market dynamics. Prepaid subscriptions number over 100 million, are now 25% of the mobile subscriber market, and Ars Technica recently reported that post-paid subscriptions declined for the first time ever in mid-2012. Prepaid is definitely attracting people other than the usual lower-income folks, students, and the tech-savvy, who have the patience (or need) to navigate the hurdles prepaid sometimes presents. The prepaid market has come a long way since Adam wrote about Straight Talk three years ago, and as one of the newest customers of Straight Talk—an MVNO that leases their networks from the Big Four carriers—I’d like to weigh in on these prepaid market challengers.
This post is mostly inspired by a conversation I had with a telecom expert at a recent event. I asked her if she thought Americans would, like the Europeans have, shift towards prepaid in the next few years. I was optimistic but she didn’t think Americans would go to a prepaid model anytime soon. (She did say, however, that some carriers would prefer we switch to a prepaid model.) So why hasn’t the US market shifted towards prepaid plans like much of the world? I suspect if we polled economists, carriers, and tech writers, most would agree that prepaid is a better model. It’s almost always cheaper to use a prepaid plan and you can avoid a two-year contract. So why hasn’t there been even more adoption of prepaid? I offer a few possibilities from the demand side (there are likely supply-side issues too, but let’s save that for another day). Continue reading →
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