Facts Prove: Wireless Industry is Most Competitive & Innovative

I was debating whether to respond to this ridiculous post, but since it’s so outrageous, I felt it was necessary. 

In 1770, John Adams said, “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”

It was a great quote then and still very applicable and true today. Unlike their responses where they frequently cited their own information, we prefer to use credible third party sources.

1) Without question, the U.S. wireless market is the most competitive market in the world. We have the lowest concentration and Herfindahl-Hirschman Index (HHI) among the 26 Organization for Economic Co-Operation and Development (OECD) countries monitored by Bank of America Merrill Lynch (BofA Merrill Lynch), including the lowest concentration among the top two providers.[1]

2) Your second point and fifth point contradict one another. BofA Merrill Lynch’s data showed the U.S. has invested more money in our networks in 2009 than Germany, France, the UK, Italy and Spain combined. In addition, comScore states the U.S. has more 3G consumers than are found in the five largest European countries combined: France, Germany, Italy, Spain and the United Kingdom (the EU5).[2] In fact, the U.S. has 21% of the world’s 3G subscribers, even though 6% of all of the wireless subscribers in the world live here.   

3) Wireless users don’t settle for anything and instead, demand more which the industry is happy to provide. While having almost 250,000 apps available apparently doesn’t make you happy, it’s interesting to note that only six months ago there were 100,000 apps. 

A recent report by ABI Research predicts that mobile application downloads will rise about 145% this year, to 5.9 billion from only 2.4 billion in 2009, and ABI analyst Mark Beccue identified the U.S. as the hub of this activity. As Beccue explains, "In this case, the U.S. has become the leader in this next round of mobile innovation." 

As economists Gregory Rosston and Michael Topper have observed, “[r]ecent developments suggest that wireless providers are responding to consumer demands for more ‘openness’ to third-party content and applications without the need for regulatory mandate.”

4) Almost all of the hottest devices are launched in the U.S. first. Here’s just a small list of them: Apple iPhone, iPhone 3G and 3GS; Apple iPad; Google G1, MyTouch and Nexus One; Blackberry Storm, Bold, Pearl, Tour and Curve 8900; Samsung Instinct; Palm Pre and Pixi; Amazon Kindle; Barnes & Noble Nook and now the 4G EVO from HTC. These devices could have been launched in any country, but they were launched first here.

If the Japanese handset market is so innovative, why did the iPhone, which just became available two years after entering our market, account for 72% of new smart phones shipped in that country? 

5) See number 2.

6) According to BofA Merrill Lynch’s data, (as of April 2010), U.S. consumers benefit from the lowest effective cost per minute among the 26 OECD countries monitored. 

The OECD study you referred to was terribly flawed and they recognized their error. In March 2010, the OECD decided to revise their methodology to take into account usage patterns that may more closely reflect actual monthly calling volumes. 

In respect to pricing, U.S. providers have often led the way in developing innovative service and calling plans. For example, wireless service providers in the U.S. pioneered bucket plans, lowering the cost of service to consumers and freeing them to get the most from their wireless service. That represented a significant change from the past, and as a result (unlike users in many European countries) Americans began to make and receive more calls, and derive increased value and benefits from the use of their wireless phones.

BofA Merrill Lynch’s data showed that at the end of 2009, the average revenue per minute in the U.S. was four cents. Across Europe’s developed countries, the average revenue per minute was sixteen cents. As a result, the average wireless consumer in Europe used just 160 minutes a month compared to over 824 minutes a month for the U.S. Over the past decade, the U.S. model has had an impact on wireless worldwide. For example, foreign providers have begun offering larger calling plans, and foreign regulators are looking at liberalizing their technology requirements, to encourage the kind of innovation and flexibility the U.S. network operators have exercised since 1993.
                                                                                
7) I have asked many individuals this question and I will pose it back to you. What is the problem that we need to address with potentially dangerous regulation? 

We have been having this debate for many years yet no one has been able to provide one wireless example. Not one! Why would we possibly change that course?  

President Clinton’s FCC Chairman William Kennard understood that having a light regulatory touch would allow this industry to thrive and be the success it is today. He is a smart man.

As he said in a 2006 op-ed, “Policymakers should rise above the Net-neutrality debate and focus on what America truly requires from the Internet: getting affordable broadband access to those who need it.”

Let’s focus on getting broadband services for all Americans. 

P.S. I encourage everyone to learn the facts and use them. If you want to see more, we just submitted a filing to the FCC today on the wireless industry’s tremendous innovation and competition. 

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[1] Bank of America Merrill Lynch does not monitor the wireless markets of the following OECD countries: Iceland; Ireland; Luxembourg; and Slovakia. See Glen Campbell et al, Global Wireless Matrix 1Q10: A Modest Recovery, Asia in the Lead, Bank of America Merrill Lynch (Apr. 13, 2010) (reporting year-end 2009 data).

[2] According to comScore, for the three months ending in February 2010, the US averaged 123.2 million unique 3G subscribers compared to 118.9 million unique 3G subscribers in the EU5. comScore MobiLensTM (downloaded Apr. 2010).