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The Cellular Pricing Problem

Posted: April 14th, 2010 | Author: | Filed under: Uncategorized | No Comments »

Cellular Internet connectivity is becoming more and more popular. So much so that a lot telcos are reporting problems keeping up with the demand. But to make matters worse the telcos, at least in North America, are gouging there customer base with ridiculous fees. Before we get into what the solution to this problem is, let’s just take a quick look into the telco pricing model. Thanks to an associate of mine who is the head IT administrator for an extremely large newspaper publishing house, I now know that Telus’ wholesale cost on talk time is 0.0018 cents per minute. That’s right, it’s not a typo, 0.0018 cents a minute. My associate, because his company does over 1.4 million in business per year with Telus was able to negotiate a flat rate of .002 cents a minute for the entire organization, and just to be clear… yes this is cellular talk time we’re talking about here.

The problem is that the telco industry is an old boys club that’s very very hard to penetrate. Not only from a consumer perspective but from an industry perspective as well. As a small business owner trying to work in the cellular space I can attest this statement. Implementing change or getting an answer to fairly basic question can be a monumental task when dealing with these companies. Which brings me to the problem within the telco pricing model. The cost of data allocation.

Take for example a family plan. There are multiple handsets that pull from a collective pool of minutes. When the pool is expunged the minutes are charged per, nothing like this exists for data. If you own an iPhone with a data plan and a rocket stick with a data plan they’re two separate allocated pools of data. What if you could get a cell phone plan and attach as many devices you like to it. An iPhone, a rocket stick and cell modem in your home. You could pay for one plan and use the allocated minutes and data for not only your cell phone but also your home Internet connection. Wouldn’t that be grand?

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