Data is King: Verizon, Sprint, AT&T, and T-Mobile Hasten Voice as Commodity in the Wireless World

Implications: With the decreasing value of voice through both mobile and landline phones, Verizon, AT&T, Sprint, and T-Mobile are all entering into a price war that places a decreasing value on voice.  They are also adding data onto their plans, and services such as Sprint TV, in the hopes of getting consumers attracted to their products.  The implications, though sometimes subtle, include a transition away from carriers, at the center of the wireless world.

Analysis: The introduction of the new unlimited calling and heavy data usage plans will be very difficult to break away from, for the wireless carriers.  With the decreasing value of voice through both mobile and landline phones, Verizon, AT&T, Sprint, and T-Mobile are all entering into a price war that places a decreasing value on voice.  They are also adding data onto their plans, and services such as Sprint TV, in the hopes of getting consumers attracted to their products.

In this way, these companies are making some signals:

1) Voice is a commodity.  Whether true or not, Sprint CEO Dan Hess said, "Nationally accepted measures of voice quality now show very little, if any, difference among the top wireless providers."  Now, I know that I oftend get aggravated at my AT&T mobile device for its voice stability relative to Verizon, but I think the general point is that consumers are willing to accept their voice quality and begin to move on to other services. 

2) Data is now the focus.  By developing pricing that includes data integrally to the plan, the carriers are hinting that data is ready for prime time.  This is a big shift, as carriers had been walking slowly toward these plans, offering small add-on plans and testing the water.  By pushing people en masse toward data, they are signaling that data is now ready for use.  The risk is that the experience, besides that evident in the iPhone, will not meet expectations.  Hence, Sprint adding services like SprintTV to the package appears to be a good move, though I have not tried SprintTV since the early days of its use.

3) The carriers are moving toward being a 'dumb pipe.'  I know the carriers and many other pundits debate this statement, and certainly Verizon has some advantages on both call quality and services through the pipe (Sprint has yet to show their supposed data prowess).  However, the mere existence of such a wide-spread, defector-led price war shows that customers don't see the differentiation in their services as much as they see the differentiation in devices and services through those pipes.  For instance, the use of the Safari browser is far outpacing the competition, on the basis of installed base, due to its user experience and tie to the iPhone. 

4) Increasing emphasis is shifting toward the handset manufacturers and service players that deliver data through the pipe.  The incoming explosion of more players to deliver services that consumers will like should be encouraged by the carrier.  However, this move weakens the carriers' negotiating position and stature relative to these third parties.  As consumers care more about data, other entities will be better positioned to deliver to their needs.  And we've already seen Apple with the iPhone increase its relative negotiating power.