Cell phones & Iraq

Stewart Alsop comments on the cell phone industry’s generally poor track record of customer satisfaction and service, in particular, how self-interest drives their lack of support for portable cell phone numbers (i.e. enabling consumers to keep their number when switching providers):

Number portability is essential to cleaning up the act of the cellular industry. And I’m not just talking about domestic cellular operators, but international as well. Here’s a key fact, one that I still can’t get over more than a year after hearing it stated clearly: Between 35% and 40% of cellular customers will buy a new phone in the next year. That’s right: In the worldwide installed base of just over one billion cellphone users, at least 350 million of them will buy a spanking-new cellphone. Obviously that statistic makes the industry beam with joy.

It’s also a reflection of a shameful track record in customer satisfaction and service. Can you imagine if a third of the people who owned cars bought new ones every year? (I think the automobile statistic is more like 10% to 12%; of course, it’s a somewhat misleading comparison since there’s a robust used-car market, while no one wants a used cellphone.) What about personal computers? (Maybe 15%?) Or televisions? (Maybe 5% to 10%?)

The cellular industry has discovered one of the conundrums of the free-enterprise system: Confused or unhappy customers generate lots of profit. Happy customers who get reliable products and services lead to commodity industries where it’s very difficult to compete on differentiation. The American cellular operators can see the writing on the wall. Cellphone numbers are portable in Britain, Australia, and Hong Kong. People from those regions are aghast that we don’t have the right to keep our phone numbers.

The article also links to a funny site dedicated to the Iraqi Information Minister — you’ll have to read the Alsop piece to understand the connection.


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