Tag Archives: cingular

Have You Ever Been Refused Service?

Can you recall the last time a company refused to perform its service some of the time for some customers?

Well, it just happened last month. For a few weeks in April 2007 Cingular and VerizonWireless decided not to connect some phone calls that their users had requested. It's not because the users had refused to pay their bills. It's not because the users had dialed some nasty mechanism that would bring the wireless service down.

It was because the nation's two largest mobile operators refused to process telephone calls that terminated on some phone companies in Iowa. It so happened that these phone companies in Iowa had established a connection to a conference bridge service, and that by FCC decree, the wireless operators had to pay these networks for terminating the call. Of course, long distance is basically bundled into local and wireless service, so Cingular and VerizonWireless don't get paid much if anything for these calls. Yet, consistent with US regulatory practice, they have to pay the Iowa companies a fee per minute to terminate the calls on their network.

What frustrates Cingular and VerizonWireless is that these phone companies share the revenues with the conferencing companies – www.freeconferencecall.com and others –  who offer conferencing for free as a loss leader. Also, these companies never make outbound calls that terminate on Cingular & VerizonWireless' network.

Well, my view of this is "tough". You were the folks who decided not to charge for LD, so it serves you right to have to deal with these anomalies. We all have to pay our employees for example, even when they cost us money. But it doesn't have to be so negative all the time.

You'd think the bright people at Cingular and VerizonWireless would figure out how to make it worth the while of the free conferencing companies to setup their services on your networks. After all, a minute is a minute.

Fortunately, the chair of the FCC, Kevin Martin, ordered Cingular and Verizon to cease and desist their illegal activity and make the connections. Now, of course, the Iowa phone companies are struggling to get these behemoth phone companies to pay their bills. 

Wireline Customer Erosion?

mobile-telephone-bill

According to the 2006 annual reports of AT&T and Verizon, the two largest US carriers, 7.4 million customers disconnected their wireline service in 2006. AT&T (including BellSouth) lost 6.3% of its wireline connections while Verizon lost 10% of its installed base. Of course, this trend is what led to the $86 billion acquisition of BellSouth by AT&T – to completely own the wireless unit (you may recall that Cingular had been a joint venture between AT&T and BellSouth), and thereby be more on the receiving end of this market transition.

mobile-telephone-billThis is a $5 billion/year problem for these two companies.

According to TMCnet.com, the average monthly phone bill in America is $54/month. JD Powers reports that the average mobile telephone bill is $66/month. Of course, because of the roaming and minutes counting dimensions of mobile phone service, the variability in mobile bills must be higher too. Nevertheless, the ideal customer for a wireline carrier has got to be the one who is also a mobile customer.