Quality of U.S. Wireless Networks is Pathetic : .. .. .. .. .. .. .. ..
Published: Dec 19, 2004
Modified: Dec 19, 2004 6:23 AM
U.S. more connected to cord
Country uses wireless less than elsewhere; service quality one of the reasons
The Associated Press
On a trip on the Tokyo subway last year, almost everyone ignored the young man talking on one wireless phone, sending messages with another and juggling a third.
Such cell phone overload would almost certainly get noticed in
the United States, which lags the rest of the developed world in mobile-phone use.
An estimated 57 percent of the U.S. population chats on mobile phones. The proportion is similar to that in much poorer Jamaica, where 54 percent of the people have mobile phones, according to the International Telecommunications Union.
By comparison, in Hong Kong there are 105.75 mobile subscribers for every 100 inhabitants. In Taiwan, there are 110.
Sprint's $35 billion deal this week to buy Nextel Communications is likely to spark another round of price wars and handset giveaways in the United States, but it will take more than industry consolidation and aggressive marketing to increase use.
Why? The reasons range from credit checks to network quality to coverage areas.
Wireless networks elsewhere are simply better than those in the United States, said Albert Lin, an analyst at American Technology Research.
"For a long time, the U.S. had way too many networks being supported by not enough investment," he said. "The quality of U.S. networks is only now coming close to the quality you would see in major European and Asian markets."
Not that the European model was perfect: Companies there paid $125 billion for licenses to operate "third-generation" mobile networks that enable European users to zap videos and data by phone. The result: Mountains of debt, but a chance to sell phones packed with features James Bond would love.
That hasn't been the case in the United States.
Wireless companies were the No. 2 sector for complaints to Better Business Bureaus in 2003, trailing only car dealers. They were the second-lowest ranked industry in the University of Michigan's customer satisfaction index, behind only cable television companies.
One reason American consumers are miffed is what Forrester Research analyst Lisa Pierce calls "big holes in rural coverage." In the area of Tampa, Fla., where she lives, her calls start breaking up one mile south of her home. Her husband uses a different carrier; his calls break up one mile north.
Another reason for lower cell phone use in the United States is how service is sold. The largest services sell phones by subscription, requiring a credit check and a commitment of at least one year.
"We have tapped out the prime-credit segment in the U.S.," said Roger Entner, a Yankee Group analyst. "Everyone who wants to have a wireless phone and can pass a credit check has one. Everyone who can pass a credit check and doesn't have one -- after ten years of a continuous barrage (of advertising), they're not going to cave."
If the industry wants more users, it will have to change its business model to embrace people with weaker credit who are willing to prepay for service, he said.
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