It's true that the fixed-line call costs in USA are lower than in Europe. On the other hand - mobile phone calls are 30-40% cheaper in EU than in USA. So the actual mobile/fixed call cost ratio *is* higher in USA... but not by that much.
The big problems for American mobile customers are bad coverage, sub-par customer service, "bundling" schemes that produce cheap per-minute costs but also include hefty monthly fees, lack of pre-paid programs that are extremely succesful for low-income consumers, etc. You literally get better coverage in Prague or Gdansk than in AT&T's New York network or Sprint's Chicago network. The customer satisfaction ratings of Sprint or AT&T mobile programs are about as bad as they can get.
I think we need to realize here that in EU and Eastern European markets there is genuine competition between operators. Consumers can switch at any time: take their existing handset, switch the SIM card and jump to another service. You take a market like England with four major GSM operators and you get competition that produces 200% year-on-year subscriber growth. In USA, switching operators usually demands also switching the standard, buying a new handset, fighting your way out of a complicated contract, etc. Barriers to free market competition always hurt growth.
I wish we could avoid bitterness in this discussion, Mucho and Brian. The numbers are what they are - USA has a rock-bottom mobile subscriber growth. Mexican TDMA operator Telmex just showed 134% growth - and GTE just showed 11% subscriber growth, joining the Baby Bell list of chronic underachievers. I know that many US commentators like to argue that *next quarter* we'll finally see the start of the American mobile explosion. But they have been saying that for years now. It's not showing up in the numbers.
As a result - the riskiest possible play on mobile operators is to rely exclusively on US companies. And many American investors are doing that. It's a lot smarter to diversify to where the real growth is taking place.
The US mobile telecom underperformance may be a painful topic. But for Christ's sake - you have the PC industry, the internet industry, the biotech industry, etc. Stop whining. You can't hog it all. The hottest profit growth in the mobile operator business is likely to belong to Mannesmann, Telefonica, Sonera, Vodafone, etc. European companies with an already implemented international strategy, years of experience in mobile data, a good grasp of managing 150% growth, etc.
There's a reason why Citibank is doing its mobile banking development work with Sonera. They had to get the encryption and mobile service know-how from Finland, because that's where it's at. I'd also like to point out that Carly Fiorina did not base the new Hewlett-Packard WAP development unit in San Diego - she based it in Helsinki. That lady knows what she's doing.
Tero |
