by Shonika Proctor

Created on: August 09, 2007   Last Updated: May 12, 2012

Cell phone companies should not be permitted to hold customers to contracts because what many people often fail to realize is cellular phone service is very much like a 'utility'. It is a 'public service' just the same as if you have a regular land line telephone bill, a gas bill, an electric bill or a water bill. Each month you receive a recurring bill for a set fee based on the amount of 'public space' i.e. airtime minutes you use. Regardless of your cellular provider, you also pay a collective 17% across the board in associated local and state taxes, industry regulated fees and such which you technically have little or no control over. If you do not pay your bill, then your service is interrupted. And if you want to get your service reinstated you call in to a customer call center or visit a local retail store and pay the bill along with the reinstatement fee, similar to what you do with your utilities. And whaddya know? It is regulated by the same people who regulate your landline phone bill!

Understood, the reason that carriers have to charge the early termination fees is to cover their operating and expenses and the cost of 'maintaining' that customer. And it is also done as a measure of insurance to recoup lost revenues on advertising and subsidized hardware to initially acquire the customer. However, with that being said, if the carrier is concerned about being able to pay for regular system upgrades and maintenance, cost of printing and mailing all those paper bills (which are substantially larger than your regular utility bill) and having to handle tons of calls to customer care, then they should offer two options:

(1) Pay a non-subsidized cost for your hardware have no contract terms and get an electronic statement and 'x' amount of calls into customer care per year. Pay an 'administrative' or ala carte fee if the customer exceeds that amount or wants the same 'amenities' as a 'contractual' customer. There is still some risk to the carrier if the customer bails out of service early and they heavily rely on their monthly revenues to maintain the network, introduce new features and such. I do not think the carrier can be faulted when they are experiencing 'growing pains' which happens on occasion. Some customers are not so forgiving in that sense. In many cases, sometimes things have to get 'worse' to get 'better'.

Or

(2) Pay a subsidized cost for hardware and the customer will incur the early termination fee if they don't commit to the 2 years (because the carrier still has to recoup their hardware discount). And they would also get the full suite of 'services' that they normally get at no additional fee. The carrier has less risk involved in this situation because it is almost like their money is 'guaranteed'.

To put a customer in a position where they can only choose a pre-paid phone (as a non contractual option) with a limited hardware selection and higher monthly airtime fees is not acceptable. They have a lot of resources available to them and there are many alternatives that they can consider. If they learned to migrate from their sales centric mentality, put the customer first and open the communication channel so that it is two way, they can attract new customers easier, retain customers and make money.

Indeed it's so simple, that it's complex. Such is life.

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