Saturday, June 30, 2007

Oh, Just Wow!

In the midst (mist?) of iPhone coverage, one piece on VentureBeati caught my attention. CellSwapper allows people to trade what's left of their phone contract. People can use it to get out of their old plan and jump into a 2 year exclusive voice contract (yikes). The implications of this are really quite significant. Take services such as USwitch that enable you to compare service prices, and then switch. Well, if you have a contract with about two months to go, but a great introductory offer comes up elsewhere, your barriers to exiting the relationship have just been removed. I am sure their are legal and regulatory issues in they way of such free-flowing contractual commitments, but the market will find a way. The concept is excellent and reminds me why I read Sean over at The Park Paradigm, Sean loves markets. Read him to see how you can insure your business against the effects of the weather! For me, Cellswapper just reinforces the mantra that value delivery is a continuous process, and that free market forces will have their way.

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Tinu said...

If I were Paris Hilton, I'd say "that's hot". Of course, I'm already on Cingular/AT&T, but it sure is nice to know... for example, after I get my iPhone, what if, by some miracle, iPhones become non exclusive in two years instead of five? And AT&T turns to shite?

Great fine.

Sean said...

CellSwapper is indeed an interesting concept, although it was unclear to me from their site whether or not you could keep your number - if not this would significantly reduce the attractiveness of the service for many potential swappers I would think.

Of course the question still goes begging - why can't the mobile phone companies come up with smart, fair and SIMPLE charging plans? Is there some sort of implicit collusion to keep it as messed up as it currently is? Why doesn't somebody break ranks?

Paul Sweeney said...

I think that if you "game theory" the scenario the new entrant always loses against the encumbant in a zero-sum price war. Actually neither side gain, both lose in a race to the bottom on price. The reason plans are so complicated is that none of the parties wants you to be able to compare apples with apples. They want you to think about other things, such as quality of network coverage, or cool download services. Personally, I think the voice calls for low price is a great and compelling offer!

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