Saturday, July 05, 2008

$10.000.000 per day for you...

This is how much US carriers are spending in advertising to convince you to use their services. According to this study US carriers are spending over $4b per year on advertising. $10 Million per day to which we should add advertising budget of manufacturers like Motorola, Samsung, Nokia, LG, BlackBerry and Apple.

Advertising budget of mobile industry exceeds $10b per year in North America. I will not start to argue how those heavy dollars could change poverty in the world - although it could. But I will certainly argue on how wrong those carriers are to promote their services before upgrading their network.
US market is a third world market for Telecom experts. We still do not have 3G - except AT&T at a lousy speed and not everywhere. No MMS for Apple, mobile portals are old looking Wap sites, quality of service is poor, GSM coverage limited to large cities, range of devices on the market is nothing compare to Europe.
That also explains the large success of the iPhone in the US. It's like going from a 1967 VW Beetle to an Aston Martin DB9. American people are still amazed by services offered on the iPhone such as weather, stock and others.
France Telecom Mobile 10 years ago was providing such advanced services to its Itineris subscribers in France.

Here is how US carriers could spend their dollars wisely:

- Upgrade your network infrastructure.
- Give us better coverage, faster internet, more content, better pricing…

Out of the $300M you spend every month on advertising could you allocate 0.3% to charity please?

Don’t worry too much for your business US carriers – Telecom is a recession resistant industry in case you didn’t know!

One positive things about operators ads. They are beautiful. Check this TV ad of Orange in Thailand.


1 comment:

Jackie Danicki said...

Companies should only donate money to charity if doing so delivers value to their shareholders - if, for example, there is market demand for it. (Hayek said that working for very large companies tends to make people less market-minded, and more inclined to believe that their income and working conditions were the result of the goodness or badness of the employer, rather than on their success with customers. I agree.)

I can't help but think of what Milton Friedman, truly the authority on this topic, wrote: When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en­terprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers. In fact they are–or would be if they or anyone else took them seriously–preach­ing pure and unadulterated socialism. Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.

One thing that makes this problematic are limited liability laws. Such conditions foster an atmosphere of reduced care as to whether or not a company's decisions might produce harm or aggravate risk.

Anyway, this is a rather long-winded way to say that if these companies are spending their money foolishly, they will and should suffer. I will lose no sleep over it. By doing so, they hasten the creation of alternatives in the market.