Maurice, I would have responded to this post earlier, but I had to take the bus today, because, using your methodology, I realized I couldn't afford to put gas in my car. I was all set to do it, even started the pump, when I realized the damn thing was sucking money away from at the rate of 4$/minute! 240$/hour! After taxes! I'd have to make a million bucks a year before taxes to afford that! So I took a long bus ride gazing sadly out the window at all the millionaires (quillionaires?) riding around in their gas guzzlers.
OK, that didn't really happen, because I realized it's a little absurd to extrapolate "bursty" expenditures like pumping gas or talking on a G* phone as if you were making them continuously. If all activities were analyzed that way, there'd be a lot less champagne and airplane tickets sold, among other worthwhile economic activity.
IMHO, a better approach to analyze G* use in developed countries is from the point of view of the employers of the user, keeping in mind that G* only anticipates about 7 minutes average use per business day. In the US an average employee costs, counting his salary, benefits, overhead, etc, upwards of 40$/hour. 7 minutes a day on a G* phone is 10$, or about 3% of the employees cost to the employer. The employer has to assess, will I get 3% more productivity out the employee by keeping him connected during his working day (and, of course, are there cheaper alternatives where that employee is working) Taking into account the demographics and cellular coverage in the US, I don't find it hard to believe the answer will be yes in a 100-200K cases.
I'm not trying to defend a particular airtime price. I have no better idea what the "right" price for a minute of G* usage is than I do the
"right" price of the stock (actually, I DO know the right price of the stock, unfortunately, the market disagrees with me.) I do believe that whatever "published" price Airtouch goes forward with will be the starting point for downward negotiation with high volume customers, who will demand (and get) discounts for early adaption, guaranteed minimum levels of usage, off-peak usage, long term commitments and god knows what else. Also, I disagree with you that it's that easy to raise prices once demand is established-but that's a subject for another posting. |
