This week's post from Mobile Industry Review.
A few days ago my son dropped into the conversation that he’d like the new iPod Touch for his birthday. Great, I thought, as I’d been looking for ideas (although a little pricy!). However last year he had an iPod Classic and already that’s ancient history (although my wife is going to have it, so it will be recycled!). The 80GB disk was meant to last him ‘ages’ but of course a year on it’s yesterday’s technology and all his friends are getting the latest iPods! His iPod Classic was a replacement for a Motorola RAZR with iTunes (sorry Ewan, and I wouldn’t let it happen again!). So, in the relentless march of consumerism my son has upgraded his music player every year to something newer and slicker.
What’s all this got to do with mobiles? Well, I think many will identify with the annual upgrade cycle and the mobile industry used to reflect this with 12 month contracts but now it’s getting increasingly hard to find a competitive deal on a 12 month contract. 18 months has become the norm. Not only does this mean we’re stuck with our handsets for longer but our needs change and we’re trapped in contracts that may no longer suit us. As an example, my wife would like a 3G iPhone but she still has 6 months to run on her contract with 3 and not surprisingly doesn’t want to incur two sets of contract charges or have to pay for one on PAYG.
Whilst I can understand that the networks want to lock us in for longer to boost their margins, longer contracts run contrary to consumer behaviour and choice. More than ever, phones get a daily battering. Now they’re not just phones but music players, cameras, web browsers, sat nav devices as well. Expecting them to last 18 months is a big ask. You can go and buy SIM free but that’s a minority interest and you end up paying for both the contract and the handset.
So what’s the answer? A completely flexible tariff that let’s you choose exactly what minutes, texts, data, contract length, handset (with or without subsidy), international pricing and other options you want. As well as generating a monthly tariff price based on the criteria you select, the sign-up process would generate a handset price. If neither of those is right for you, you juggle the options to get the right price. Alternatively, pick the price that suits you and see what you get for your money.
I know times are tough for the operators but this would be a real USP for someone in the market. And it would deliver real consumer choice - so who’s going to step up to the mark?