Economics at Work

Three years ago, when I opened my plumbing business, I needed a cell phone. (Now, since the technology isn’t necessarily cellular, they’re called “mobile” phones.) Choosing a provider was like exploring an uncharted jungle. It required great powers of analysis to construct an apples-to-apples comparison of what was being offered. Most irritating was the fact that the various companies were obscure deliberately.

I was equal to the task, though, and I ultimately went with SunCom, a fancy name for AT&T, which was just about the biggest and most reliable option I found. I got 1,000 anytime minutes for $55/month, plus all the little add-on fees.

It’s been okay. I have discovered on the Internet that everyone has gripes against his mobile phone company, and mine are no different from others, except for one annoying point: roaming!

I can be in the middle of Memphis and unable to hit an AT&T tower. Wham: sixty cents a minute. Being in the plumbing business, I have little choice as to whether or not I’m going to talk on that phone. End of the month, another $5 or so tacked onto the bill. But what’s money to a plumber, right?

It’s the principle of the thing. :rolleyes:

Last November a law was passed that makes your number portable; that is, you can go to another company and take your same phone number with you. I was promising to do exactly that last year, but I waited a month or two to let them iron the bugs out of the transferral system, then I had a month or two with no roaming, then I got busy — ah, you know the drill. I just let it go.

Well, yesterday I finally did something about it: I moved to T-Mobile. I have the same 1,000 minutes, but at $40 instead of $55. There are NO ROAMING charges and free long distance. I paid a $35 activation fee and got a “free” Nokia 6010 handset, a quantum upgrade from my old Motorola V120c.

This is how the free market works. AT&T tried mightily to keep me, but they just couldn’t do it. T-Mobile simply had a better deal. They got me on a one-year contract. At the end of that year, if they haven’t kept pace with their competition, they’ll lose me the same way that AT&T did.

Technology is becoming cheaper; these companies’ sales volume is increasing all the time; everybody just has to have that mobile phone; and yet, for all that, the prices have only barely come down in three years. AT&T doesn’t have a single offer on their web site that’s any better than the one I got from them three years ago. Among phone users, the pressure is increasing to drive prices down. The high prices cannot be sustained against such pressure (unless the government steps in and forces people to pay higher prices). Step by step, companies that cannot compete will be marginalized in the phone market.

Can you hear me now?

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