The Coming Cell Apocalypse.

Image representing iPhone

Image via CrunchBase


I never had a cell phone till six years ago when I began working for Collages.net as a Systems Administrator. I somehow managed to live through my teenage years and my college career without one…but now I wonder how I ever survived without one?

The good news is, since IT folks are generally “on-call” officially or unofficially[1] I haven’t usually had to pay for my cell service – it is one of the few perks of being always on-call…they want to be able to reach you[2].

When I went to work at PBU I gave Charity (my beautiful wife!) my old iPhone 3G and now have a Verizon Droid 2. Each month we get the bill for Charity’s iPhone and it is painful! Almost painful enough that I’d say, “Let’s take you back to¬† dumb phone.” But not quite. Why note?

  1. Charity is a really, really wonderful woman and deserves a smartphone.
  2. We run extremely hectic lives and staying coordinated with one another and with others is greatly facilitated through our use of our smartphones.
  3. We don’t have a home telephone (or television/cable), so I figure its a fair trade-off.

So how much does it cost to have a smartphone these days? Around $80/mo. – if you go with a major provider like AT&T or Verizon and aren’t on a business plan![3] It feels a bit like highway robbery!

Don’t get me wrong…I’m not someone who minds paying a premium for a good service, and in fact there is only one part of the provider’s plan that really ticks me off:

We get charged for both a data and a text messaging plan. For anyone who doesn’t know – text messaging is data. There is no reason why we should be charged separately for these two separate plans – just give us a reasonable limit on our data plan and then figure the texts into that data plan usage.

The only reason I can see for the providers not to do this is that text messages take up basically no data and thus they would lose a lot of money as the texts would usually easily fit in with a smartphone’s existing data plan limits.

When you break a plan down into its component parts it looks something like this:

  • $40/mo. for 450 minutes – okay, that isn’t bad imho.
  • $15/mo. for 200 MB data – okay, you are robbing me blind…but i’m okay with this…
  • $15/mo. for 1500 text messages – wait a second…i thought i was already paying you for data…oh, that’s right I am!

But wait…What did I mean about a cell apocalypse? No, I’m not talking about the potential merger of AT&T and T-Mobile (yes, I’m hoping this merger fails miserably…), I am talking about the convergence of technology toward IP based networking. Let me explain…

Traditionally, voice and data communications have operated via two different technologies. Voice is analog, data is digital. But as technology has progressed voice has moved towards data. Data communications are largely based on the IP (Internet Protocol) technology and now voice communications are being built on a similar technology…ohhh, and this reminds me of the other reason I’m an unhappy camper: my bill should be for just one thing – data usage.

See, one can already use voice communications over IP. This is what VoIP is, Skype is, and all those other free calling apps you can get for your computer and smartphone. These apps utilize the data networks to avoid the traditional phone networks – which have all sorts of charges for terminating calls and so on.

Right now phone companies could simplify our bills down to just one charge – our data (whether that is voice, video, web, or text – it is all data) – but an artificial distinction between technologies allows for higher prices.

So, the coming cell apocalypse is simply this: the emergence of devices which will utilize a data network for all types of communications. Significant movements in this direction occurred first with the revelation of the iPhone and then with the Android. These phones are so intelligent and controlled so much by the device manufacturer rather than the cell provider that they have brought us leaps and bounds closer to unified communications over IP[4]. Where the real change will occur though is as the world is blanketed in WiFi hotspots and as these hotspots become reliable enough to provide coverage without failure across the world – at least to the extent that cellular networks are available in the same place. As this happens we’ll see a movement where phones utilize these existing networks for data access rather than the cellular networks and with this the need for cellular networks will no longer exist! Yes, there is coming a day in which cellular providers will be a thing of the past…

That is, unless they choose to become part of this new technology evolution and undergo a radical shift in emphasis and method…which is doubtful. This would be (a) very risky, (b) reduce revenues, and (c) be unpalatable to shareholders[5]…but it is the only hope the cellular providers have of surviving long-term. The providers must choose between two painful roads:

1. Stay the same and milk us in the short-term for all we are worth but at some point face a rapid deterioration and eventual unsustainability and bankruptcy.

2. Change the course radically and experience a sharp decline in immediate revenues but sustainability over the long-haul, with ongoing revenues for the foreseeable future.

This shift is similar to what must occur in the television and movie industries – if the traditional companies expect to survive (and what companies like Blockbuster and Hollywood Video failed to embrace with tragic results).

The end result is inevitable – unified data communications. Unfortunately for consumers, this desired end may be long delayed if cell providers continue to embrace the current revenue strategy…but eventually it will be overcome.

Here is to holding out that one of the few remaining independent cellular providers (e.g. Sprint) who isn’t a currently top-market player will take a gamble on the better road and force everyone to move this direction sooner than later!

  1. [1]Aka, no, you aren’t on call but yes we will still call you in the middle of the night. =)
  2. [2]At all times. Yes, that includes Christmas.
  3. [3]Businesses get discounts, since they bring in a number of customers.
  4. [4]A discussion of the details of how these devices advanced this cause is far too large to undertake in this article, you’ll just have to trust me.
  5. [5]Who, ironically, are us…the same folks who complain about cellular service prices.

1 Response

  1. Starting next Monday the same day Apple is expected to unveil a new iPhone ATT will begin offering new data plans with preset amounts of monthly data access. This also means that the current 30-per-month unlimited data plan will no longer be available to new users…..The new data plans will offer users three options ..

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