Kevin Martin, the chairman of the FCC, has made it his business to try to cut the costs that customers are charged when they cancel their service before the end of a contract. According to The New York Times, "Mr. Martin's plan would require that fees be related to the actual cost of the phones. A fee for a $50 phone would be higher than for a $5 phone." It would also take into account how many months a customer had left on a contract.
The cellular companies, including Sprint (NYSE: S), spend a lot of money on their poor customer service. They ought to have a chance to get some of that back when a customer walks. It probably also costs the firms money to reconnect all of those dropped calls.
The cellular companies do have initial costs to set-up service and billing when a new customer comes on board. The Martin plan does not appear to take that into account.
Just because the service is no good does not mean that the cellular provider is not out a lot of money to provide it.
Douglas A. McIntyre is an editor at 247wallst.com
Stock picks and pans for troubled times: RIMM, ED, ISRG, GLW, LEA, SLB, GOOG ...
Is Berkshire Hathaway better than S&P Index?
Closing Bell: Torch Passing on a Friday Rally
Reader Comments (Page 1 of 1)
6-13-2008 @ 11:31AM
mike said...
Um, what cell phone company does the author work for???
6-13-2008 @ 11:57AM
Badabing said...
McIntyre is obviously a shill for the cell phone companies. What costs? They charge for the phone when you get the service, even if its a low price, believe me they cover their costs. He states, "just because the service is no good does'nt mean the provider is not out alot of money to provide it." What his he on? I don't care if its cellphone service or a hamburger, if the service or product is bad the customer has the right to walk. That's part of the reason things are the way they are in this country now, no one cares about service.
6-13-2008 @ 1:14PM
Nick said...
"Just because the service is no good does not mean that the cellular provider is not out a lot of money to provide it."
. . . I hope that was a sarcastic joke.
I'm sorry but I'm not in favor of providing charity to businesses that are not competent enough to provide acceptable service. This is how market forces work: the best products/services win. If a wireless carrier can't keep its customers satisfied, I don't see any rational reason said carrier should expect to earn any revenue.
Remember how the entire point of running a business is to take risks and EARN revenue? That's how capitalism works.
Then again, maybe this was purely sarcasm . . . one can only hope . . .
6-13-2008 @ 1:25PM
Robin said...
Interesting how he says that cell phone companies have initial costs to set up service. What he fails to mention is that the cell phone companies pass that on to the consumer. I paid upwards of 50 dollars to have my new phone activated. So, if there are more costs involved, I'd like to know..
If Sprint is spending a lot of money on poor customer service, then maybe they should rethink their business plan if customer service is still poor..
6-13-2008 @ 2:12PM
Mark said...
"The cellular companies, including Sprint, spend a lot of money on their poor customer service. They ought to have a chance to get some of that back when a customer walks. It probably also costs the firms money to reconnect all of those dropped calls."
Is this a joke? This has to be a joke...