Cell phone carriers passing the buck

Cisco's Mini Cell Phone Tower

In the U.S., AT&T, the cell phone carrier that currently has the exclusivity on the Apple iPhone in the United States has had a lot of bad publicity about their inconsistent reception. It has actually been going on since the iPhone launched in 2007 and has not improved much with time. Their competitor, Verizon is well aware of this issue and they decided to launch a series of advertisements that compares the two companies’ coverage areas. You probably saw them; they feature maps of the U.S. with the coverage areas over the heads of people. The ads clearly show the big difference in coverage and these ads have been making the situation for AT&T even worse. In light of this problem, AT&T will introduce a controversial product to improve the reception quality.

The product itself is made by Cisco and is actually a very good idea that has a lot potential for the future. It operates similar to a wireless router that many people have in the home to enable computers to access their internet connection wirelessly. The way it works is by connecting this small box, which even looks similar to a wireless router, straight to your internet connection at home. The “MicroCell” as AT&T calls it, works just like a tiny cell phone tower by shooting cell phone signal in to the air. It will not cost additional money for the user as you already pay for the internet service and it does not use up bandwidth on it. This product has a very bright future and I would not be surprised if it becomes a staple in homes in the next 5 years.

The problem many people have with AT&T and rightfully so, is that they are planning on charging the customer $150 for the product. This is crazy because a cell phone customer pays a monthly service fee in order to have exactly that-cell phone service. So now, they are going to charge an additional $150 to help correct their problem that their customers are already paying for every month. It’s not like the customer only pays for the calls or standby time that is in excellent reception. If that were the case then it would be understandable to offer a separate product to improve the reception if the customer chooses to have it. However, they don’t do anything close to that currently. The cell phone companies charge a monthly fee whether you had good reception or no reception. So with this product, you are basically paying twice for the same service.

It also means that they admit that they have poor reception which their competition can use against them. That is, of course, if they don’t end up offering the same product, which they may very well do. In fact, I would not be surprised if all cell phone carriers use this product because it will free up space on the very expensive cell towers they currently use and let’s face it, no GSM service in North America is that good on reception.

I would also expect Canadian cell phone carriers like Rogers and perhaps Bell and Telus to offer this product as well for the same reasons as AT&T. I would also fully expect them to charge the customer at least the same amount as AT&T will charge in the U.S., if not more. The only cell phone carrier(s) that can compete with AT&T in treating the customer terribly and ripping them off are the Canadian carriers: Rogers, Bell and Telus.

Everyone should be outraged at the plan to charge the customer for this product. However, we should also be quite excited about the prospects this product has not only in its business potential but also because it may make our cell phones operate with great reception like they should be.