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Would US Carriers Lie To Save Customers?

Aug 28th

Posted by Chris Leckness

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Tagged: , in Opinion
closeThis post was published 3 months 2 days ago which may make its actuality or expire date not be valid anymore. This site is not responsible for any misunderstanding.

holygrail I am not accusing any major US carrier of anything here, seriously. I just want to get that out there first and foremost. This post is basically me thinking of a potential conspiracy theory. It’s kind of far fetched, but maybe it’s not. Give me some latitude on this one and think outside the box a little.

OK, we all know that the carriers are fighting each other for customers in the US right? It’s not to the point where the US Long Distance game was in the mid 90s where you could carrier hop for a couple months and actually make a couple hundred. No. Not that bad yet, but it is so bad that carrier exclusivity is quite important for them with handsets. Fierce Wireless wrote a piece the other day about the subject. The article mentioned that the prior to the iPhone, the actual phone was 7th on the list of what was important when choosing a carrier. I am sure that this was a survey that stretched across the entire spectrum of users. I would be willing to bet that the numbers would be much higher among users that are looking for “smarter” phones, not just the throw away freebie phones.  The issue of exclusivity is serious enough that the FCC is looking into the game…

Over the past few months, the government’s interest in the practice of handset exclusivity has intensified. On the heels of Congressional hearings in July, Verizon Wireless agreed to dial back its exclusive deals with cell phone manufacturers to accommodate smaller carriers. This week the FCC, which has already begun a review of handset agreements, has made the issue a focus of its regular monthly meeting. But no matter what the setting or circumstances, whenever U.S. lawmakers and regulators discuss competition in the wireless industry, the elephant in the room these days is almost always the iPhone.

Well, with the blogosphere jumping at the slightest hint of a hot new phone coming to a carrier, what about this scenario?

What if some hot shot, genius marketing person saw that the “Holy Grail” Phone (The HTC Touch Pro 2 IMHO) was getting a ton of buzz. Well, carrier A is rumored to be getting this one, but carrier B which happens to be the hot shot, genius marketing person is not planning to get this one. They learn from the blogosphere, which might or might not be right, that carrier A is supposedly getting an exclusive on this “Holy Grail” phone. What is to stop hot shot, genius marketing person from creating a fake PowerPoint slide depicting the “Holy Grail” phone in their line up. The blogs would gobble this up and there would be posts everywhere, including this site, with titles like “Carrier B to Get Holy Grail Phone in April”. Of course, here, unless it’s factual for sure, it would read something like, “Could Carrier B Get The Holy Grail Phone?”.

So seriously, think about this, lately there have been so many leaked internal documents that have leaked out into the public. Many of them are proven to be true months or even days down the road, but some have come up fruitless. So with so many power users switching from carrier to carrier based on an exclusive that one carrier has, would a “Fake Leak” keep customers from pulling the trigger long enough for their carrier to release the “Holy Grail” killer?

  • How many people changed carriers just for the iPhone?
  • How many people changed carriers just of the Palm Pre?

Do you think a carrier would ever pull such a stunt in an attempt to keep their users from hoping over to carrier A for the “Holy Grail” phone? Are there any laws preventing such tomfoolery from happening? If this were to happen, how could they prove it wasn’t a fanboy of carrier B just trying to get some hits to their blog?

Once again, this is not something that I suspect is happening now, but it’s a thought.

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  • It's an interesting thought. I'm not sure that there's anything illegal about spreading disinformation, but it could backfire in at least three ways.

    First, there's the Bad Press effect. If a carrier got caught doing this, there'd be tons of bad press that could damage the carrier's reputation and maybe even depress the stock prices.

    Second, there's the Cry Wolf effect. Even if they weren't caught intentionally doing it, if the handset never came out on the carrier, people would point that out. If it happened a couple of times, people would stop believing anything leaked and ignore the carrier.

    Third, there's the Osbourne Effect. People who might not have considered switching carriers anyway but were interested in upgrading their phone might delay purchases waiting for the new phone, costing the company money now for possible money later.

    While many people may have switched carriers for the iPhone, how many actually paid an Early Termination Fee to do it? How many phones would actually have that kind of impact? Did the T-Mobile G1 Android phone or the Palm Pre have that impact?

    Steve
  • VeryPossible
    While I think this is entirely plausible, it would not stop me from switching.
    The TP2 has already been released on T-Mo, but it does not have a 3.5mm headphone jack. No Deal!
    The TP2 is rumored to be released on Verizon (my current carrier) and will have a 3.5mm headphone jack. However their voice/data plans are expensive and they have a bad habit of locking out certain features on their handsets. No Deal (whether true or not)
    The TP2 is rumored to be on ATT, without a 3.5mm headphone jack and they have the iPhone. No Deal. Even if they had the headphone jack I would boycott them because I am so sick of hearing about the iPhone.
    The TP2 is rumored to be released on Sprint on September 8th. It will have a 3.5mm headphone jack and Sprint has cheaper plans than Verizon. Deal!

    So in my case, even though I am looking for a "smarter" phone, I also want the whole package. I am tired of paying Verizon's rates and not being able to tether or use the GPS without paying a monthly fee.
    Even with cheaper rates, I want a 3.5mm headphone jack as my car has an Aux input, but not bluetooth. Who wants to carry some stupid breakout box to be able to connect headphones.
  • Regarding Verizon's rates, yes they are expensive (too expensive if you ask me), but you may get what you pay for. How good is Sprint's coverage (especially 3G)?

    Regarding a 3.5 mm jack, it's certainly nice to have it, but not that crucial. My Samsung Omnia has an annoying proprietary jack, so I just carry the dongle attached to my earbuds. If your car has a 3.5 mm input jack, just keep the dongle attached to that cable. Yes, you may have to buy another dongle for the headphones and the car jack, but that's life.

    I think choice of carrier is far more important than whether the device has s 3.5 mm jack or not.

    Steve
  • VeryPossible
    In my area Sprint coverage is very good, including 3G. They have been working hard on their 3G rollout. And in many markets I think they have matched Verizon's coverage.

    I have never liked Verizon's rates, but had stayed due to coverage. I think that has changed enough to where I am willing to try Sprint.

    While I would not make an overall decision based on a 3.5mm headphone jack, it could be a deciding factor all else being roughly equal.
    Although I did not get a 3.5mm jack on my last phone and I rarely use it to listen to music because of the hassle of using adapters.
    So to me personally it is in the top five points of importance (with coverage, rates, call quality, qwerty keys).

    In the case of the Touch Pro 2 (a handset I have been waiting on for months...no years), all of the major carriers are rumored to be getting it.
    Given that, the 3.5mm headphone jack became a deciding factor along with primarily rates/coverage.

    I agree with your other points, bad press, wolf, and Osbourne. Which raises another question.
    What if a competing carrier wanted to sabotage another carrier by giving them bad press. Carrier A could leak a document purported to be from Carrier B with bogus info.
    As you noted, doing this several times may disenfranchise their customers enough to get them to consider switching or miss some other phone they would have gotten.

    Conspiracy theories abound in the world of cyberspace. I think this is plausible too.
  • Yes, a 3.5 mm jack could be a tie-breaker. I personally wouldn't it put it #5, but it sounds like you've given it a lot of consideration, so I'll just say different strokes.... :D

    As for Carrier A releasing something that looks like Carrier B had a leak, I think that would be illegal. In fact, now that I think about it, even Carrier B leaking disinformation on its own might be illegal. If stock prices went up on the leak, that could be construed as market tampering. Even if not, it would likely generate shareholder lawsuits.

    Steve
  • Jake
    I know scores and scores of friends and colleagues who went to ATT for the iPhone. I literally don't know only two people who went to Sprint for the Pre. And they actually returned the Pre and quit Sprint within 30 days because of problems with their Pres (no standalone GPS, defective blotchy screens).

    I am considering going with Sprint when they get the Touch Pro 2 if it is $300 or less and will go with their $50/month plans since it has a sim card slot for use for travel outside the US as well as cdma.
  • breley
    Using social media as proxies in market share warfare has undoubtedly been going on for some time, but this would be an interesting FUD twist on it. What would be the ramifications of making such false statements, especially if they could be traced back to carrier B spinning them out? A possible example might be what happened regarding that Bayard fellow from Belkin buying positive router reviews on Amazon and other sites late last year.

    Clearly, bloggers need to be judicious about how they portray the "tips" they receive to distinguish between rumor and fact, lest they lose their own credibility.
  • badersk
    Interesting thought. Nothing suprizes me anymore. So this is plausable. I have always felt that leaks are an important marketing tool. I can't believe for example that companies really can't prevent there software from leaking out, like wm6.5 has been doing. I think that most of the time it is on purpose.
  • srvctec
    I sure wouldn't put it past them to pull something like this.
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