Cell phone customers have a better chance winning at
roulette then they do finding the best carrier for their usage needs,
according to a UC Irvine business school professor.
But Peter Navarro, an economics professor at The Paul Merage School of Business, also says there is a simple solution for a market that has grown to more than 140 million customers who consume more than 50 billion minutes of airtime a month.
In an article published in the Journal of Policy Analysis & Management, he points to three critical factors that tilt the odds in favor of roulette: First, providers do not have to reveal to consumers the location of coverage problem areas (dead zone and congestion areas, which lead to dropped calls and busy signals); second, problem area locations are different for each provider; and third, consumers have different usage needs and use their phones in different coverage areas.
Navarro says since the Federal Communications Commission (FCC) does not now require carriers to publicly disclose this information, and no single carrier has any incentive to do so alone because the other carriers would use that information in advertising campaigns to steal customers.
The end result is that consumers must use unreliable sources of information to make purchase decisions -- for example, the opinions of friends or family members who may have different usage needs and are in different coverage areas.
"We either wind up dissatisfied and stuck with a bad carrier for our particular needs or we have to pay costly switching and exit fees until we find the best carrier," Navarro says.
Navarro says that there is a very simple solution that would lead to improved cell phone service for consumers.
"If every cell phone service provider was required to provide detailed coverage maps of their service areas, each of us could easily and economically find the best cell phone provider for our particular needs," he says.
To fix this problem, Navarro recommends that the U.S. Congress consider the "Cell Phone Users Bill of Rights," or S-1216, proposed by Senators Charles Schumer (D-New York) and Barbara Boxer (D-California). Navarro says S-1216 correctly concludes that "consumers may not be aware of the deficiencies in wireless telephone service quality until after they have signed a contract, and exorbitant early termination penalties effectively lock consumers into undesired, long-term contracts."
The full article published in the Journal of Policy Analysis & Management is available by e-mail or can be downloaded from http://gsm.uci.edu/~pnavarro/audio/.
But Peter Navarro, an economics professor at The Paul Merage School of Business, also says there is a simple solution for a market that has grown to more than 140 million customers who consume more than 50 billion minutes of airtime a month.
In an article published in the Journal of Policy Analysis & Management, he points to three critical factors that tilt the odds in favor of roulette: First, providers do not have to reveal to consumers the location of coverage problem areas (dead zone and congestion areas, which lead to dropped calls and busy signals); second, problem area locations are different for each provider; and third, consumers have different usage needs and use their phones in different coverage areas.
Navarro says since the Federal Communications Commission (FCC) does not now require carriers to publicly disclose this information, and no single carrier has any incentive to do so alone because the other carriers would use that information in advertising campaigns to steal customers.
The end result is that consumers must use unreliable sources of information to make purchase decisions -- for example, the opinions of friends or family members who may have different usage needs and are in different coverage areas.
"We either wind up dissatisfied and stuck with a bad carrier for our particular needs or we have to pay costly switching and exit fees until we find the best carrier," Navarro says.
Navarro says that there is a very simple solution that would lead to improved cell phone service for consumers.
"If every cell phone service provider was required to provide detailed coverage maps of their service areas, each of us could easily and economically find the best cell phone provider for our particular needs," he says.
To fix this problem, Navarro recommends that the U.S. Congress consider the "Cell Phone Users Bill of Rights," or S-1216, proposed by Senators Charles Schumer (D-New York) and Barbara Boxer (D-California). Navarro says S-1216 correctly concludes that "consumers may not be aware of the deficiencies in wireless telephone service quality until after they have signed a contract, and exorbitant early termination penalties effectively lock consumers into undesired, long-term contracts."
The full article published in the Journal of Policy Analysis & Management is available by e-mail or can be downloaded from http://gsm.uci.edu/~pnavarro/audio/.
© 2005 Business Wire
