Will Wireless Industry Mimic The Airline Industry?

Over at Yankee Group, they’re predicting that the market for mobile phones is saturating in the US, and with increased competition in the form of local number portability, the wireless carrier business may become the new airline industry: high fixed costs, low variable costs, low profit margins, perishable product and high competition levels. They’re afraid that, just like the airline industry, many people will use it – but there won’t be many happy customers. This is certainly one possibility, but it’s not like many people are really thrilled with their current carrier already – so that might not change. In the meantime, it will also open up space for carriers who become the “JetBlue” of the wireless carrier world: bucking the trend of dismal service and figuring out a way to re-engage their customers so that they actually enjoy doing business with them. Wouldn’t that be something? Also, as for the fear of it becoming a “mature market”, that’s what was said a few years ago and proved not to be true at the time as new markets for wireless carriers opened up. At some point, the market does reach its limit, but I’m not sure it’s there yet. As carriers are increasingly pushing new services and applications that are catching on with consumers, it gives them a chance to differentiate themselves and still grow the market.

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