Sunday, November 28, 2004

reason for low mobile phone penetration in the US

On my daily reading I stumbled upon a posting on Russell Beattie's weblog, where he thinks about the possibility of Apple developing a mobile phone with CDMA technology. That started me thinking. Will mobile usage in the US, even if it uses GSM technology, ever reach such high percentages of the population as in Asia or Europe? I don't think so and the main reason, why not everybody in the US will switch from landlines to mobiles is the following: in the US you have to pay, if somebody calls you. Mobile phones in the US have an area code just like normal landlines, so you normally don't even know you are calling a mobile number. It costs you the same, if you call a number in a certain area code, no matter if it is mobile or landline. In the rest of the world, if you call a mobile phone it normally costs you more than calling a landline, at least when the call originates on a landline. Mobile operators have special "area"-code blocks, so you normally know, where your call goes. But as mobile phone usage is overtaking landline calls nearly everywhere in the world, soon the cheapest calls will be, if you stay in the same network. So how could the US get higher mobile phone usage rates? Use special "area"-codes for mobiles and get rid of "called party pays" on mobile phones.

1 Comments:

Blogger TeddyTheBear said...

theodoric said...

The real reason why mobile handset penetration is relatively low in the US is that we once had, and still to a large extent have, universal, top-quality wireline telecom service. It's practically impossible to buy a house in the US that isn't already connected to the telecom network. That's true almost nowhere else in the world. The rate of handset adoption in Eastern Europe in the 1990s was driven by the fact that the existing wireline telecom network sucked, so if you wanted a phone at all, you pretty much had to get a mobile. I can even remember when it commonly took European PTTs - even in countries like France and Italy - months to process an order for new service.

How true. Not long ago in the capital of Austria you waited nearly a near to get a land line installed! And two months before the so called telecom liberalisation to state owned telecom doubled their prices! So no wonder everyone ditched their land lines as soon as possible and switched to mobile phones.

3:55 AM  

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