Home Tech US Wireless: “A minefield of incompatibilities and obstacles to market forces”

US Wireless: “A minefield of incompatibilities and obstacles to market forces”


Horace Dediu of Asymco, one of the leading Apple analysis, hits the nail on the head today when he says that the US wireless market is “a minefield of incompatibilities and obstacles to market forces.” It is, he says, “balkanised and bysantine:. Sitting here in Europe I have often wondered why Americans do it the hard way when it comes to cellular wireless. The four (soon to be three) major players are mutually incompatible entities which means you cannot simply move to another supplier and slip in a new SIM card. 

The trouble is that US consumers have never had much choice and the US wireless marketplace has been a minefield of incompatibilities and obstacles to market forces.

To begin with, US carriers maintain multiple incompatible network standards. Phones which work on one network do not work on any other. A Sprint phone won’t work on AT&T or on Verizon. In fact, some Sprint phones won’t work on all of Sprint’s network as it still uses the iDen standard legacy from the Nextel acquisition. Even the iPhone which is designed for the AT&T network does not handle T-Mobile’s version of 3G. So a consumer cannot make a decision on devices independent of a decision on carrier. This is a phenomenon unique to the US

For an outsider, the strangest thing about the US cellular networks is that they charge for incoming calls. I can never get used to this and, I believe, it is the only country in the world that permits the practice. I am also irked by the way the US networks appear to shun pay-as-you-go customers. Visitors are badly done to in this regard.  find it almost impossible to buy a SIM which can be topped up whenever I visit. In contrast, I can travel the world and have a local phone SIM or data SIM within minutes from most network stores. I can top it up and use it whenever I return to that particular country. Not so with the USA. I feel isolated if I spend more than a few days in the US because of this difficulty of getting good, cheap 3G service.

Customers of AT&T find it easy when they visit the UK (or probably a majority of other countries in the world). One frequent visitor I knowh as a local SIM for his iPhone 4 and another for his iPad. He tops these up these pay-as-you-go cards by internet before he arrives and then has the same local service that UK residents enjoy. It’s easy to walk into any phone store in London and buy a SIM for about £10. As long as you top it up at least once a year you have yourself a permanent arrangement with a minimum of formality.

Dediu says that the unique state of the US cellular market is such that it has developed its own “Galapagos syndrome”.:

Few global brands can be bothered to invest in it. Vodafone tried to play in the US with Verizon, but its minority position offered no leverage because Verizon spent the better part of a decade avoiding global networking standards. Now T-Mobile is desperate for an exit after trying to leverage the foothold it paid dearly for and failing to offer devices that capture users’ imaginations (because they were railroaded into another incompatibility with 3G). Conversely, no US brands have been able to expand internationally. US operators are non-entities abroad, even in what would be natural expansion territories like Latin America or the Caribbean.  Those markets belong to European investors today.

Read the full article on Asymco here.


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