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CTIA CEO on Tomi Ahonen’s “outrageous & factually incorrect statements”

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There’s an absolutely fascinating argument burgeoning between Steve Largent, President & CEO of CTIA (the American Wireless Association) and mobile industry analyst/commentator, Tomi Ahonen.

Ahonen posted this excellent diatribe laying into the American mobile industry (primarily the operators). Steve wasn’t happy. Not at all. So unhappy was he, that he ended up having to question whether Tomi lives on this planet.

Steve published this response to Tomi’s post and made a convincing argument citing lots of facts, but failed to answer many of Tomi’s key points.

I recognise that much of Tomi’s post was informed opinion. He didn’t cite everything — neither do I when I’m delivering an opinion-based rant. But to assume — as I think Steve does — that Tomi doesn’t know his stuff, is patently inaccurate.

I think Steve really didn’t enjoy comments such as this one from Tomi:

[Addressing the American wireless operators] What the h*ll are you doing charging for incoming SMS? That is the dumbest idea I’ve ever heard? Do you have 100% adoption of SMS? No, I didn’t think so? The USA adoption rate for SMS among US cellphone subscribers is 64%. Why are you not at 100% – the world adoption rate is 78%, why are you only at 64%? Its that idiotic idea to charge for incoming SMS !

I’m with Tomi on this one. Charging for incoming SMS is ridiculous. Totally ridiculous. This point is thoroughly deserving of a perspective Steve. Is it the CTIA’s policy to support charging for incoming text messages? Or are you just looking the other way on that one?

What about the archaic medieval torture method of charging for State-to-State ‘roaming’? That’s right, Tomi got stuck in there too:

So while we’re on the [subject of] roaming. What is this I hear that you still punish American domestic citizens for making ‘long distance’ calls within the country? The roaming charges for national calls? Come on! Its another caveman era concept. Its been abandoned in almost all countries already. Why do you insist on this punitive practise? The big four networks have near-perfectly national footprints, you really have to stop these types of archaic medieval torture methods.

Steve doesn’t counter this one directly. Understandably.

I’d like to see a Q&A response between Steve and Tomi. For instance, Steve, is this assertion from Tomi inaccurate?

You know fully well, you make profits on cellular calls across the country, the distance is totally irrelevant to your pricing today as you have your fiber-optic backbones long since deployed and your cross-country calls go on the IP packet network anyway. If its on your network, its a profitable call. You have no basis for charging more for long distance or ‘roaming’ except that its a nasty habit you got into, and you think you can get away with it. The roaming is pure greedy profit that has no place in the market in the 21st century, because your customers have a choice.

I do have to wonder why Steve didn’t answer this point directly.

And what really got up Steve’s nose? Perhaps this final paragraph…

I literally ‘wrote the book’ on modern mobile operator (carrier) marketing, customer care and loyalty. That book is referenced in several dozen books by other authors. I also created the Oxford University course about this topic, and have run seminars and workshops about carrier marketing on all six inhabited continents. I have advised carriers internationally on marketing matters for more than 15 years. I can say without a shadow of a doubt, that US based carriers are the dinosaurs, the obsolete cavemen, and their actions are obsolete and they must change or be killed off. Their conduct is appaling. They are a disgrace to the industry. I urge them to change now, and I advise American consumers to revolt, to write to their congressmen and demand change. It is time we brought those complacent, conceited, arrogant, bloated and colluding carriers to the 21st century. Its time to wake up.

The American wireless industry is being dragged kicking and screaming into the modern era though, as I’ve documented here on Mobile Industry Review over the years. Steve from the CTIA lists out some useful stats to demonstrate this. Did you know, for example, that there are 132.2 million 3G subscribers in America? (More than France, Germany, Italy, Spain and the UK combined).

I wonder what Tomi will respond with? I’d like to get both of these guys in a room and film it, I really would.

(Got this first via Phoneboy‘s tweet)

By Ewan

Ewan is Founder and Editor of Mobile Industry Review. He writes about a wide variety of industry issues and is usually active on Twitter most days. You can read more about him or reach him with these details.

10 replies on “CTIA CEO on Tomi Ahonen’s “outrageous & factually incorrect statements””

We can rest assured that GSMA's Rob Conway is dozing on some fairway, thinking “Steve, baby, you're on your own here.”

I'm with Tomi on this one. Now that US carriers are going away from “unlimited” data plans it's interesting to calculate the different prices per bit (voice vs data vs SMS). The prices vary from $'s per MB to well over $1000 per MB. Let's see if Steve can explain why….

If the US carriers want to move to the front of the class, they are going to have to really work at it.

CTIA quotes lots of huge numbers. Pah. So you got scale? So has a dead fish.

I'd agree the US lead the world with the 'all-you-can-eat' bundle play (nicked it from their restaurant culture). I think the whole long-distance thing – for mobile particularly – harkens back to when there were loads of small cellco's intercharging each other. Literally you could connect to Bob's Mobile that only covered your city, and have to roam elsewhere. Most of the rest of the world's just not that big to justify regional telco's, so reach is national, like the major US players are now. Many have flirted with region, town or neighbourhood-based pricing, but it never flies. Any incremental profit is eaten up in complex billing systems and marketing the whole sorry mess.

I'm guessing Steve didn't address “the archaic medieval torture method of charging for State-to-State ‘roaming’” or long-distance points because nobody actually does it?

Have they stopped that now, Carlo? I had to have that on my plan the last time I was in the States for any length of time. Is it all now included?

They may have touted having no roaming or long-distance fees as a feature (thanks to people getting destroyed by them in the past), but they've not been an issue for many, many years. Even operators like MetroPCS and Cricket, which started with a strategy explicitly aimed at local phone replacement for the low end of the market now offer free long distance and roaming.

Some may be confusing US innovation (handset OS supremacy, classy client software, ambitious web-based services – coming more or less uniquely out of the Bay Area) …with the appalling state of US telecommunications as a whole.

It's 'web heads' vs 'bell heads'.

The 21st century glamour of the former doesn't forgive the 19th century failings of the latter.

Tomi responded here: http://communities-dominate.blogs.com/brands/20

Tomi said about that response (on a post on Forum Oxford): “I of course then took a serious factual approach, the CEO and President of the CTIA certainly deserves that – and wrote my rebuttal today [above link] …

I addressed every one of Steve's 16 points, and returned to each of my 20 points, indicating where Steve had responded and where he had simply ignored my arguments, and concluded that all 20 of my points still stand and US carriers are the sc*m of the universe (to borrow a phrase from MIB haha, was just running here on cable last night..)

Comments? Am I off base? Does Steve have valid points to defend his industry or is he just doing what lobbyists and mouthpieces have to do, even when defending the indefensible?”

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