Phone Subsidies Hurting Consumers?

[Nurhisham Hussein]

<div class='os_post_top_link'><a href='http://www.businessweek.com/globalbiz/content/may2007/gb20070529_601522.htm?campaign_id=rss_daily' target='_blank'>http://www.businessweek.com/globalb...gn_id=rss_daily</a><br /><br /></div><i>"The fight over customers is so fierce that, for new subscribers, operators will even offer their year-old models for as little as a penny. The tab for subsidies alone can set the operators back some $16 billion a year...Sounds like a bonus for the common man, right? Not necessarily. The operators recoup their spending by charging consumers steep prices for air time."</i><br /><br />This article from Business Week echoes some of the thoughts that I've had for some time about the business model common to carriers in the US, Japan and Europe i.e. low, subsidized hardware prices in return for locked-in contracts with higher fees. This is in sharp contrast to the mobile market I grew up with and am used to - full price hardware, but no contracts and much lower fees. So this poll is about gauging your preferences, while letting me get this 300lb gorilla off my chest!<!><br /><br />I'll admit - the economist in me cringes at the subsidy model. It isn't just the higher fees, everything about it screams monopolistic practice. By having lock-in contracts, you get some really skewed incentives:<br /><br />•As it provides a guaranteed income stream to carriers, they're going to focus on new customers as opposed to existing customers. That's why new offers, campaigns and rebates aren't "grandfathered" to existing accounts. That's also why there's less of a focus on after-sales service.<br /><br />•On the customer side, penalties for opting out of the contract means you'll tend to stay put to the end of the contract term no matter how much greener the grass looks on the other side. And if you're tying to move from CDMA to GSM, or vice versa, you've got even less incentive to switch.<br /><br />•Since all handset sales go through carriers, phone manufacturers have very little market power. This reduces the incentive to innovate on the hardware side, unless it is features that might drive revenue for the carriers as opposed to features that might actually be useful to users.<br /><br />•Another side effect is at the hardware retail level, there's hardly any competition at all - thus less variety and generally higher retail prices, to the point where subsidized prices aren't much of an advantage. Want an example? AT&amp;T lists the Moto Razr V3 at $199.99 unlocked with no contract after a $50.00 online discount, T-Mobile offers it at $29.99 with a 2yr contract (minimum $29.99 per month) and after $50.00 mail-in rebate (list is at $199.99) - in Malaysia the list price is RM545 ($160 at current exchange rates) and it typically goes for RM450 ($130) after bargaining it down - brand-new, unlocked, without contract, and you can use it with any carrier. Let's take another example, the Sony-Ericsson P990i - oh, wait, you can't get that in the US.<br /><br />•Getting back to the fees again, I typically pay RM190 ($56) a month for calls and data charges. That's true unlimited minutes, unlimited text messages, and flat-rate unlimited data - no fair use applies here. Even better, there're no restrictions to tethering. Sound good? And I'm on the most expensive carrier in Malaysia - you can get a 35% lower bill, if you're willing to settle for EDGE instead of 3G.<br /><br />The bottom-line for a subsidy model is less choice, less competition, less and/or wasted consumer surplus. Sounds all bad doesn't it? Actually, there is only one class of customer that benefits at all from the subsidy model - and, surprise! it's the type of customer that opts for a smartphone/PDA phone. Why? Because the more limited market means that hardware prices aren't discounted much even in a fully competitive market, and this type of customer also tend to go for the more expensive, data-inclusive plans anyway. So while subsidies mean the average mobile phone user gets a bum deal, us geeks get to play with the latest toys - assuming it's adopted by your carrier, of course. And after you've finished with your latest contract. And if you don't mind the higher airtime fees. You can guess where I stand on this issue - give me choice, give me flexibility.

[Timothy Rapson]

I know how to add and subtract, multiply and divide numbers. It is not rocket science. We have two track phones. We spend $50 on one and $30 on the other. We pay about $10 a month TOTAL for minutes. Of course, there is no subsidy but there is no monthly fee.
How the industry is getting people to spend this kind of money on this awful service is beyond me. I guess most Earthlings don't get math.

[Vincent M Ferrari]

If customers had to pay full non-subsidized prices for even the cheapest phones, they'd lose their minds.

As for the argument that airtime is more expensive here because you're locked in, that's simply not true. Vodafone's rates in the UK, for example, are double what any comparable rates in the US are.

I'm not a huge fan of being locked into a carrier, but subsidies are not without their benefits. The phones are significantly cheaper and much more accessible to the average consumer.

Malaysia isn't an Apples to Apples example, either. Malaysia's per-capita income is roughly 1/4 what it is in the United States. If they were charging US rates in Malaysia, I seriously doubt anyone would even buy one.

[Cybrid]

Back in 1999, when cellphone were quite rare. Signing up for a 1 yr contract entitled me to a $400 discount. Nowadays, that subsidy has shrunk quite a bit. The lack of competition between carriers is appalling. For me, and other canadians...there doesn't seem to be any real deals.

[rhelwig]

I would prefer to not be locked in, but at this point it is fairly moot. I have no choice but Verizon as no other carrier has a signal in my area (and a poor one at that).

[ADBrown]

Frankly, I doubt US prices would be any more reasonable without subsidies. People are willing to pay for it now, so carriers have no incentive to lower their rates, subsidy or no.

[frankenbike]

Like all surveys designed to only elicit the response which confirms the hypothesis, there is at least one missing question.

In this case, the missing questions are (IMO):

"The price for service would be the same with or without subsidies, since it's the lack of real competition that keeps rates high. Companies will charge whatever they think the market will bear."

"Rates are actually lower now in the US, than when equipment wasn't subsidized"

"Eliminating subsidies won't matter until all the government forces carriers to allow consumers to use signal compatible phones on their systems, regardless of where they were purchased."

IOW, in the US, competition comes not just between GSM carriers, but the two CDMA carriers. If the consumers can't switch at will from Sprint to Verizon or the MNMOs, and if portable phone numbers aren't automatically portable based on ESNs (without delays or hassles determined by the carriers) eliminating subsidies has absolutely no effect.

When consumers were limited to carrier owned land-line phones and long-distance rates subsidized local rates, land line phone rates were actually far cheaper. The breakup of the phone companies in the US benefitted businesses and people who use a lot of long distance calling, but actually hurt the vast larger number of consumers.

The real bottom line is that the subsidy model really doesn't have a huge impact on what people ultimately pay for service, because there is no real competition. The fact that the carriers are maximizing their market can be confirmed by the fact that I don't think a single person in the US knows anyone that doesn't have a phone. Despite an enormous disparity of income.

$56 a month for calls and unlimited data sounds cheap by US standards, but how does the average monthly income in Malaysia compare to the average US income? You can get a huge number of minutes and unlimited data in the US for around $100 from some of the MNMOs, unlimited minutes for a few dollars more. Does the average US consumer make more than double the average Malaysian consumer? (of course they do)

Put another way, would people in the US trade their incomes for these incomes to get cheaper wireless phone rates?
http://www.mida.gov.my/beta/view.php?cat=4&amp;scat=18&amp;pg=193

Nurhisham, the economist in you should be familiar with the term, ceteris paribus. Your lower rates have absolutely nothing to do with lack of subsidies. In your market, you're actually paying almost criminally high rates. Your rates have more to do with what the market will bear. I'd wager that a larger percentage of people in the US have cell phones, especially children in families (nearly all carriers have family plans that drop the cost per phone down dramatically).

In any market, people only pay what they need to pay, and nothing more, for what they perceive as the value of a product. US carriers would charge exactly the same, whether phones were subsidized or not. And consumers might not be free to buy any hardware they like, but they can eschew the subsidy for their phone to not be locked into a contract. They don't often do that, because there's little to be gained. Most won't even make the attempt to negotiate better rates through their carrier's retention departments when their contract expires.

[Paragon]

In a perfect world I would rather not see subsidies. Since it is not a perfect world I will gladly except them. Here's why...I recently picked up a new P4000 from Telus. The going non contact price is $549.00. On a three year contract it is $199.00 and many times it is a free upgrade. I always figure I have to give my money to someone anyway, so if they are going to commit to me with a discounted phone, I'll gladly stay with them for the term of the contract. If I chose to buy the phone outright I would pay more for the phone, and I would still be paying the same amount for my services. It's not like they charge more for contracted services to get the subsidy money back, like some make it out to be.

I think anyone doing the math is forgetting the fact that you still have to give your money to someone, so why not give it to the guy that is giving you something in return.

I firmly believe that if we see subsidies go away we will not see a decrease in overall costs, instead it will be quite the opposite. We wil be paying full pop for phones and the cost of our services will remain unchanged.

Liker I said, if they are willing to reward me with a cheap phone just for committing do do business with them for a given period of time, I'm more than happy.

Dave

[virain]

Sprint used to offer plans without a contract, I am not sure if it still does. The price was abot 10% higher than with 1year agreement. The catch was, you can't use Sprint phone on any other network, so if you cancel your service, you loose a phone number and money with the phone. If GSM carriers would offer plans with no contract, you would see much more competition, as user would jump from one carrier to another as soon as they see a slightly more attractive deal, that would create a lot of complications and abuse. Just remember phone slamming with land lines, someone calls you, offer to switch a carrier next thing you know, you get a bill from another provider.

[Sven Johannsen]

Sprint used to offer plans without a contract, I am not sure if it still does. The price was abot 10% higher than with 1year agreement.
And I believe that has to do with the contract, not any sort of phone subsidy. It's similar to a lease. You rent an appartment month by month, you pay more per month than if you sign a year lease..

I don't actually believe the rates on phone plans have anything to do with phone subsidies, or at least you wouldn't get better rates if you didn't get subsidized hardware. I certainly haven't, any time I have gone in and just bought a SIM with service to put in a phone I already owned. The rate is the rate. The contract (lease) in return for a lower hardware price is an effort to level their income and keep customers. You can always get out of that lease if you really hate the service. You just wind up paying for the hardware, and some early termination fee.

[Nurhisham Hussein]

Wow, great responses! I was kind of hoping to stir some debate on this issue, and there's a lot of points to consider here.

If customers had to pay full non-subsidized prices for even the cheapest phones, they'd lose their minds...

Only if they're unaccustomed to it. If that's the market you have to live in, people will adjust to the value propositions they're faced with.

As for the argument that airtime is more expensive here because you're locked in, that's simply not true. Vodafone's rates in the UK, for example, are double what any comparable rates in the US are.

Vincent, everything is more expensive in the UK. I wouldn't necessarily take that as disproving my argument.

Malaysia isn't an Apples to Apples example, either. Malaysia's per-capita income is roughly 1/4 what it is in the United States. If they were charging US rates in Malaysia, I seriously doubt anyone would even buy one.

No, it's not a great comparison. But, my point was the lack of competition in the US is what's keeping your rates high.

Like all surveys designed to only elicit the response which confirms the hypothesis, there is at least one missing question.

You're quite right, I didn't do a great survey design. And I think you touched on something I didn't clarify very well: IMHO the subsidy model is just symptomatic of the lack of competition in the industry at many levels. The different signal technology is one structural impediment to reducing that (similar to the situation in Japan).


$56 a month for calls and unlimited data sounds cheap by US standards, but how does the average monthly income in Malaysia compare to the average US income? You can get a huge number of minutes and unlimited data in the US for around $100 from some of the MNMOs, unlimited minutes for a few dollars more. Does the average US consumer make more than double the average Malaysian consumer? (of course they do)

Re: my $56 monthly bill. I used this as an example of of the upper bound of what a Malaysian consumer can be expected to pay - I mentioned that you can get as much as a third less on a different carrier. My wife for instance pays about $12 for unlimited minutes and text, but without data.

Of course, there are some guys out here with $100+ bills, usually because they're paying for more than one line.

Nurhisham, the economist in you should be familiar with the term, ceteris paribus. Your lower rates have absolutely nothing to do with lack of subsidies.

That's arguable. The problem with invoking ceteris paribus is that it really only applies to theoretical models, which by their very nature imply a degree of removal from real-world conditions. Econometricians and applied economists don't have that kind of luxury.

To really get at the effect of subsidies, you'd have to do some kind of factor analysis taking all the relevant variables into consideration, ideally with samples from the same population. That way you can isolate the magnitude of the effect of subsidies. Since that's not something we can do here, we're back to debating our views :).


In your market, you're actually paying almost criminally high rates.

My rates are high, relative to the market I'm in. But I was willing to pay the price for 3G access, and just as importantly, unrestricted 3G access. The other carrier that offers 3G here has fair use provisions.

Your rates have more to do with what the market will bear.

That's an interesting proposition, one that I don't agree with. If that were true, I'd expect to see Malaysian carriers to consistently show lower profitability than US carriers, capex costs being what they are, which isn't the case. Charging what the market can bear is evidence of market power, not perfect competition where you have to take what the market gives you. In the US case, IMHO you're paying what carriers think customers are willing to pay. In Malaysia's case, we had one carrier come in and undercut everybody else. The resulting price war benefited cell phone adoption enormously. That's one of the points made in the article - barriers to entry allowed Japanese carriers to entrench high prices.


I'd wager that a larger percentage of people in the US have cell phones, especially children in families (nearly all carriers have family plans that drop the cost per phone down dramatically).

How much? ;) The US penetration rate is at an estimated 69% (2006, source:CNN), the Malaysian penetration is at 72.3% (Q4 2006, source: Malaysian Communications and Multimedia Commission). Also Malaysia has a much younger demographic than the US - 43.5% versus 27.4% under the age of 20. There's an ongoing public debate here about banning phones in school that's been raging for a few years now - the Government and the teachers union are for it, parents are against. I don't think the lack of subsidies (and having to pay full price for handsets) has hurt market penetration at all.

In any market, people only pay what they need to pay, and nothing more, for what they perceive as the value of a product. US carriers would charge exactly the same, whether phones were subsidized or not.

First, different people have different preferences and values. Under normal market conditions, if prices are cheaper more people would be willing to pay and vice versa. This intuition is what's behind a downward sloping demand curve (if I can resort to use of a theoretical model ;)). The opposite happens with suppliers - higher prices, more supply; lower prices, less supply - leading to an upward sloping supply curve. The nexus of the two curves is the optimal perfect competition equilibrium point.

I don't agree with your second point because in my view that is not where the US market is at. The essence of my monopoly argument is that with market power (phone subsidies with lock-in contracts), US carriers can charge higher rates - in your words, what the market can bear. This results in a social cost (less people can afford it) and a financial one (those who want to, have to pay over the odds). The reason why this is not socially optimal is because the surplus generated by monopoly power is less than the financial and social loss to consumers.

Now there are solid reasons for supporting some degree of monopoly power (see: Schumpeter and creative destruction), but only in the event that it drives true innovation. We'll have to see how VoIP does to see whether that's really at work here.

They don't often do that, because there's little to be gained. Most won't even make the attempt to negotiate better rates through their carrier's retention departments when their contract expires.

This actually supports my argument - if my hypothesis is correct, and rates are higher than they should be, there is no incentive for consumers to go for unlocked handsets. You'll pay the same rates regardless. That's why I'm saying incentives are skewed, and not for the better.

I firmly believe that if we see subsidies go away we will not see a decrease in overall costs, instead it will be quite the opposite. We wil be paying full pop for phones and the cost of our services will remain unchanged.

Dave, I agree - prices are downwards 'sticky' (can you tell I'm not a neo-classicist?). Any change to the market model will result in a painful adjustment period (especially if government mandated), at least until and unless price competition sets in. What the market really needs is for someone to come in and compete purely on price. Given the size of the US market, that's sadly unlikely to happen unless cell-phones get replaced by other 'disruptive' technology (VoIP anyone?). But there's nothing sacred about the rates you're paying now. Haven't they been coming down, especially data prices, relative to what you're getting in value? My contention is that your rates aren't fully reflective of what they should be under a competitive market.

I don't actually believe the rates on phone plans have anything to do with phone subsidies, or at least you wouldn't get better rates if you didn't get subsidized hardware. I certainly haven't, any time I have gone in and just bought a SIM with service to put in a phone I already owned. The rate is the rate.

Sven, see my last comment for frankenbike.

Guys, there's actually one good counter-argument for my hypothesis about consumer incentives that I didn't go into in my original post - the time-value of money. If we agree that under a more competitive market, rates would be lower, most of the actual ownership costs are upfront from the hardware (I'm taking the case of buying a new handset). Under a subsidy model most of the costs of ownership are deferred, since your handset cost is subsidized and even if rates are higher, they stretch out over a two year horizon. Applying a discount rate to the different cost streams might enforce the case that overall costs to the consumer might be lower under a subsidy model (use a credit card rate, if you want to beat me up on this :)). Same analysis applies if you have a higher rate of inflation. This still doesn't resolve the problem of monopoly surplus, though it certainly helps fudge the issue from a consumer perspective.

Keep the comments coming guys!

[martin_ayton]

Two points:

1) Cashflow / "Capex". Particularly in a company purchase, subsidies allow phones to be covered (almost) entirely on revenue, and that is a lot easier to deal with in most companies' internal bureaucracy. For personal purchases, subsidies allow people to have the 'phones now, and although that might mean paying higher charges later, their cashflow doesn't take such an up-front hit, and that is a lot easier for most people to budget. Both are similar situations and, although the underlying reason may be due to your 'future value of money' argument, I doubt that most people would understand it that way.

2) This is a redundant argument because without direct intervention from legislators, the subsidised-model markets are not about to switch to a non-subsidised model. And no legislator is going to be seen to cause consumers to have to pay $lots for devices which they could previously get for $free - that kind of market intervention loses elections. Even if the lack of it makes economists grind their teeth.

[keirmeister]

Like others have said, I doubt cell carriers would ever lower their prices now. But I, for one, would love it if they got rid of the exclusive phone concept. I love travelling in Europe and seeing the wide variety of cell phones available, and wish the US had such a selection.

Of course, I haven't bought a carrier-provided phone in years, and prefer to pay for an unlocked, unbranded, 3rd-party phone if it's exactly what I want/need, so I guess I already miss out on whatever benefit the subsidy gives.

I have a TyTN, which is the same as the Cingular/AT&amp;T 8525. But I'm on T-Mobile. Why would I want to change carriers just to get the phone? These exclusive agreements are exactly why I'm not even considering an iPhone - that and the fact that for pure functionality, the iPhone ain't got nuthin' on Windows Mobile (although it is satanically more attractive).

[Nurhisham Hussein]

Both are similar situations and, although the underlying reason may be due to your 'future value of money' argument, I doubt that most people would understand it that way.

No...but I think they'd understand it instinctively, even if they don't understand the mathematics behind it.

This is a redundant argument because without direct intervention from legislators, the subsidised-model markets are not about to switch to a non-subsidised model.

True!

And no legislator is going to be seen to cause consumers to have to pay $lots for devices which they could previously get for $free - that kind of market intervention loses elections.

Unless there's voter awareness that there's a significant problem with the airtime fees - that's the whole thrust of the Business Week article. The politicos will wake up then. In any case, any kind of government intervention would probably result in some kind of compromise - gradual lowering of the subsidies, rather than a sudden shift, for instance.

[martin_ayton]

Unless there's voter awareness that there's a significant problem with the airtime fees - that's the whole thrust of the Business Week article. The politicos will wake up then. In any case, any kind of government intervention would probably result in some kind of compromise - gradual lowering of the subsidies, rather than a sudden shift, for instance.

I think you have a much sunnier view of your fellow man than I do! In my experience, people seem to be influenced by numbers rather than values. That isn't particularly clear, so let me illustrate by example: Years back when I was working for a large international chemical co., I was involved in clearing up a leak from a stock tank which polluted a local canal. It was a pretty small discharge but still significant, and it hit the national news. What sticks in my mind is the way the leak was reported - the journalist used the measure of millions of milligrammes of pollutant in that one stretch of canal. So we have a very, very large number (of a very, very small volumetric amount, not even expressed in volumetric terms) in a very small number (of a very, very large volume). Sometimes, such measurements are justified and 'usual' usage, but in this case the reporter was not using any form of standard unit. The point is that the reporter understood as I, with a scientific and engineering education had not, that people in general hear raw figures and don't try to understand what they mean. Which, applied to this argument, means that if you think that you can educate most people to understand that by increasing their upfront equipment costs by, say $250 US they will save, say, $15 US per month (my figures may be spurious!) and that will benefit them in the medium term, then I think that you are being rather optimistic. People will remember "$250 vs $15" not "$250 vs $15 x 24." Also, even if they *do* do the maths and decide it really is a better deal, they will *still* think "$250 up front (ouch!) vs. $5 per month overcharge (grr!)" and stick with the situation which hurts less in the short term.

If that were not the case, people would not take out short-term, unsecured loans at high(er) rates to fund consumer (i.e. non-income generating) purchases. AKA credit card spending.

[Nurhisham Hussein]

If that were not the case, people would not take out short-term, unsecured loans at high(er) rates to fund consumer (i.e. non-income generating) purchases. AKA credit card spending.

:lol: All too true!

[Jason Dunn]

Nurhisham - brilliant post, and brilliantly argued. I agree with you 100%.

[Nurhisham Hussein]

Thanks Jason!

I think there's a doctoral thesis in here somewhere.

[Sven Johannsen]

One thing I don't get is why you believe there is no competition in the US. We have four major carriers, and dozens of smaller ones. They may not compete entirely on price...when you get right down to it, they are all pretty close...but they certainly compete in service quality, both actual, dropped calls, coverage, data support, and in customer service. Fortunately for the carriers, those metrics are harder to confirm for the individual, or for any third party analytical firm. You wind up dealing with statistics, and we all know there are lies, damn lies, and statistics.

There has always been some price competition as well. I have seen numerous instances where one company has lowered some pricing aspect, and the others have shortly followed. I think you are right that we won't see any company pop up to compete solely on price. We are too big a country for anyone to have the capital to create a viable network, whether that is VoIP or cell, and do it at a cost that allows undercutting what is already there. Remember that while Malaysia has around 27M people spread over 127K Sq miles, the US has around 300M people spread over 3.7Million Sq miles. Our paltry 69% penetration still means we have more than 7 times as many people with phones, as you have people.

I don't pretend to understand the market here, but I do understand it is a different market than anywhere else. That doesn't just go for cell phones/service. Many of us love rebates, no down payments, no payments/no interest until--, etc. Anything to limit that initial outlay. To offer phone at full price, a carrier would have to offer something else tangible to make that palatable to the American consumer. The only thing easily discernable would be price. So how much savings would you need to make up for that $400-$600 phone. Well $20 savings per month would let you break even in 20 months for that cheap phone. I don't see the phone companies knocking $20/mo off if you bring your own phone.

I think the iPhone will be intersting. Sounds like it will be $500 with a two year contract. And you know the "New" ATT is going to see this as a PDA data plan, not a smartphone one. I wonder how big a segment is ready for that.

[Nurhisham Hussein]

One thing I don't get is why you believe there is no competition in the US.

I don't - that's not what I'm saying. My argument is based on economic theory, and that can be a little hard to get across, sorry ;). The gist of it is that with subsidies and lock-in long term contracts, carriers can exercise market power i.e. to impose a price on the market, rather than take what the market gives. The former will invariably be higher than the latter, even if we're only talking about degrees. I'm saying there's not enough competition, not that there isn't any.

Put it in another way - would the carriers offer subsidies if it wasn't in their interest? Any self-respecting business will always seek to maximize profit-potential, and most (legal) avenues usually entail some form of market/monopoly power. Branding is one, after-sales service is another. Building a nationwide network is a competitive advantage - but it also means you have the latitude to price your goods and services higher than someone who doesn't have one, even if what you're both selling is identical. A lot of this type of business practice is fairly well-accepted, and for the most part I don't have a problem with it - most have beneficial aspects that counter the loss of consumer welfare. My issue with US carrier market structure right now is that you don't have a choice.

To take your example of bringing your own phone, you don't get a rate structure that reflects that you're not taking advantage of the subsidies available. Taken in aggregate, that means consumers are in essence paying for subsidies whether they use them or not. And even if you do take advantage of the subsidies, those who opt for cheaper phones are in fact subsidizing those who take more expensive ones, where the element of subsidy is the highest. That's not fair.

Your comment about the difference between AT&amp;T's smartphone/PDA data plans is actually one proof of carrier market power - price discrimination between different segments of a market is a monopoly hallmark.

I'm not the only one (http://news.yahoo.com/s/usatoday/20070606/tc_usatoday/skypelockedphonesunfair) who thinks theres a problem here it seems, although these guys have a vested interest in breaking the market open.

[Nurhisham Hussein]

I though I'd revisit this topic, because some new developments have occurred that make my original post more than an academic exercise. It turns out both Congress and the FCC are looking at breaking open the carrier stranglehold, starting with the new 700MHz spectrum:

Congress Weighs Cell Phone Flexibility (http://news.yahoo.com/s/pcworld/20070712/tc_pcworld/134383)

New rules could rock wireless world (http://news.yahoo.com/s/usatoday/20070710/tc_usatoday/newrulescouldrockwirelessworld)

Analysts: IPhone Breaks The Carrier Stranglehold (http://news.yahoo.com/s/cmp/20070704/tc_cmp/200900288)

In case anyone's interested, the Tim Wu study quoted in two of the above articles is available here (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=962027).