Verizon Wireless CEO responds to David Pogue’s article on the American mobile industry

David Pogue, writer at the New York Times, published an article titled “The Irksome Cellphone Industry” that has received a lot of attention. He goes off on American operators, complaining about the cost of text messages, double billing, subsidies, calling people abroad, voice mail, and more. In today’s connected world, it must be difficult for Pogue, and others, to read how things work in Europe and Asia, and not get upset. People buy their mobiles unlocked, pay the full value, and get to use all the features that the device manufacture intended the device to have. Service is purchased separately, and is utterly fantastic, because if it isn’t then picking another operator is as simple as going to the corner store and buying a SIM card. The only time you pay is when you send a text message or call someone. Voice mail … is dead. These realities aside, Verizon Wireless CEO Lowell C. McAdam decided to send a letter to Arthur Sulzberger, Chairman and Publisher of the New York Times, defending Verizon and the American mobile industry in general. Why not directly to Pogue is beyond me. Anyway, here it is, in its entirety:

Dear Mr. Sulzberger:

The wireless sector of the high-tech industry shines as one of the few bright spots in the nation’s economy. Competition has driven massive investment, continueous innovation by wireless companies and our many corporate and entrepreneurial partners, and lower consumers prices.

Despite this amazing American success story, a few vocal critics, including your paper, have leveled highly misleading charges at wireless companies.

The 85,000 U.S.-based employees of Verizon Wireless—an employee-base growing even today—encourage our elected and appointed officials, as well as the media, to rely on facts, not myths.

Myth #1: Americans pay more for wireless service.
Fact: Americans pay ten cents per minutes less than Europeans.

Among the 26 countries in the Organization for Economic Cooperation and Development, Americans use the most wireless minutes per month, about four times more minutes than the average European consumer. Americans get the lowest cost per minute…an average of 10 cents lower per minute than Europeans pay.

Myth #2: The Wireless sector of the technology industry is not competitive.
Fact: Former Vice President Al Gore has proclaimed U.S. wireless companies the most competitive on the globe.

More than 94 percent of Americans can choose between at least four wireless companies. Four national and hundreds of rural and regional wireless companies offer great consumer choices: pricing plans, post- and pre-pay options, and more than 600 handsets for sale…more than anywhere in the world.

Myth #3: Wireless customers are treated badly.
Fact: 84 percent of American wireless customers are satisfied with their service.

According to a June, 2009 U.S. Government Accountability Office study, 84 percent of American adults are very or somewhat satisfied with their wireless service. One popular report published for consumers says there has been a “surge” in wireless customer satisfaction.

Myth #4: The big wireless companies don’t pay attention to rural America’s needs.
Fact: The company with the most rural wireless customers? Verizon Wireless.

Verizon Wireless has invested $60 billion to build America’s most reliable network—important whether you are in the city or the country. And our recent merger with Alltel is an even larger investment in providing even better rural service.

Verizon Wireless stands with consumers by:
– aggressively closing down telemarketers and text spammers;
– supporting hands-free driving laws, and alone among wireless companies, supporting bans on texting and emailing while driving; and
– protecting privacy by chasing down identity theft and killing efforts to create a wireless phone directory.

Already we’re investing in the benefits of fourth generation wireless broadband networks that will give Americans access to even more information, multimedia and services, including bandwidth and speeds capable of delivering high-definition video.

But 4G is about much more than entertainment: Our new network will play a major role in improving healthcare by carrying medical records securely, mitigating climate change by facilitating mobile telecommuting, advancing energy efficiency with smart grid technologies, fostering education by providing students immense computing capability in their handheld devices, and leading the economy to new prosperity.

Wireless is, indeed, a success story…an amazing American success story that even our critics can be proud of. In global technology leadership, service delivery, contribution to the national economy, solid employment opportunities, and improving productivity, Verizon Wireless is committed to delivering great wireless services and opening the doors of opportunity for our nation.

Sincerely,
Lowell

I’m not going to bother writing a rebuttal since all you have to do is buy a plane ticket to see how sweet things are outside the borders of the red white and blue. From personal experience I can tell you that coverage on this side of the pond is fantastic, I pay less than I ever did in the states, and all my friends have multiple mobile phones stashed away in a drawer since they upgrade whenever they see something they like, rather than waiting for a contract to expire.

[Image via Flickr]

  • Mike Maddaloni – The Hot Iron

    When you’re the head of a company that makes its money by putting a chokehold on people, you’ll get desperate. Quoting Al Gore – now that’s desperate!

    I’ll give my take on each of his points…

    1 – Ok, I won’t argue that we pay less per-minute for voice, but they are making up for it on texting (yea, when we’re talking Verizon don’t call it SMS or MMS) and data.

    2 – Isn’t Al Gore the global warming expert? I don’t recall him on a hydraulic lift talking about the number of devices that are available. And the fact you can choose from 600 devices… is that a good thing?

    3 – I grew up eating in school cafeterias, where the food was not so good. But as I was too cool to bring school lunch, that was my only option. So was I satisfied? Sure. When that’s all you have for options, you have to choose something.

    4 – There’s part of the US where Verizon doesn’t even provide landline service, let alone mobile.

    US carriers make their money from locking in customers, and telling them they don’t have an option to get a replacement charger for a phone, but can get a new phone and charger for “free” if they renew for 2 more years… it happened to someone I know, and they didn’t know any different.

    US mobile carriers have dumbed-down Americans. Can you hear me now, Mr. McAdam? You probably can’t as you’re laughing too hard at all the money you’re making off of your business model.

    mp/m

    • Joseph Wilson

      I work for Verizon. There are a lot of things that are misunderstood about the cell phone world that I think causes a lot of crazy things that get said about the industry.

      Heres the main point:
      You get locked into a contract because your carrier subsidizes the price of your phone and they have to make their money back. They are typically losing money on your contract until half of it is over. If you want to avoid a contract then pay retail for your phone and move on. You have the power to be 'satisfied'.

      Another thought:
      If you think you can do a better job then start a wireless company and do a better job. Create some competition so the big guys will have to do a better job. If you're not willing to do anything about it then stop crying and move on.

      Texting prices:
      You can get unlimited texting on your whole account for $30 with Verizon. Considering that most teens average over ten thousand text messages a month and most families have a few teens on their account, $30 isn't so bad.

      "It doesn't cost to much, you just don't make enough" – Jim Rohn

  • Tyler Hurst

    Did you purposely ignore all of Pogue’s points? Consumers don’t give a crap about 84% rates of this or ten cents per minute less than Europeans, we want to know why the hell text messages cost more than email.

    Do you even live among the people? Have you ever seen a cell phone bill?

  • Rob

    Interesting that he didn’t take the time to address even one issue pointed out by David Pogue. Corporate America never wants to listen just gloss over and hope it goes away.

  • Smitty

    Sure, we’re paying less per minute, but so is the person I’m calling. “Caller pays” is the rule in Europe, and makes mobile bill much lower by cutting your number of minutes in half. Scan your phone bill, and subtract the calls that are INCOMING, and see if you couldn’t lower your number of minutes by quite a large percentage by only buying the number of minutes listed as OUTGOING.

    Same with texting, as @Mike Maddaloni stated so well above. Both parties, again, are billed, whereas only the sending party in Europe is billed.

    And there was no mention of the 30-second instruction in voicemail that cannot be turned off. If every call has an extra 30 seconds, as well as every call you make to your voice mail box, the number of minutes skyrockets. This is the dirty little secret that the US carriers are trying to cover: they have many and subtle ways to increase minutes with every call, so charging you less per minute is OK. They’ll make it up in volume.

    And “being satisfied with service” is only measured by current customers. That’s like saying “85% of the repeat visitors to our restaurant liked our food.” Of course they did – or they would no longer be customers! Are you polling former customers? I’d love for the Nextel folks to call me for a customer service survey. I’d tell them about how they extended my contract for service without my authorization, and have been hounding me for the “disconnect fee”, despite the letters of explanation and copies of bills I have sent. For Their only response is another bill. There’s never any “Oh, that was a mistake, we apologize and will remove that from your record.”

    • The mounain

      you know what…retrieving voicemail is free in South Africa…

  • carldec

    What a mediocre bit of PR propaganda, Mr Sulzberger. You phone guys cant even do that well. You dont address any of the issues, you just quote some tangentially related factoids.

    And you still wonder why we hate being duped by you?

    Giving Mr Pogue some real answers would be nice, but it seems beyond your capabilities. Posting something like this is worse for your case than staying silent.

    • carldec

      whoops,

      Lowell C. McAdam is the Verison CEO trying to do the pr number on us.

      Sorry Mr Sulzberger…

  • Charles Wrye

    Lowell’s points are the standard propaganda line that the US mobile phone companies spout. You couldn’t really expect him to reply to David’s point, because those points are all valid. I do find it amusing that Lowell wrote to his “buddy” Mr. Sulzberger rather than directly to Pogue. Maybe he thought he could get David fired by going over his head.

  • Alderete

    Amusing that he doesn’t actually respond to any of Pogue’s actual points from his column. It’s not hard to put together a reasonable-sounding argument, if you only want to talk about the areas where you’re _not_ screwing your customers.

  • Andrew

    No body really pays per minute or per text, they have plans that they dont go over for the most part, and those plans for minutes and text cost nearly the same amount as the plnas in Europe cost, but here’s the kicker, they get unlimited data too for the same price! Us americans are way over paying and it is starting to piss me off more and more. New contracts always get the phone for free, yet ofer here we are paying between $100 – $300 for a new phone.

  • Tom

    Am I the only one who noticed that the rebuttal was actually against a Times editorial about consumer choice in the industry, NOT Pogue’s column? Pogue’s column demands a response, but this wasn’t it.

  • Stephen – NYC

    He sounds like a politician. Never gives a straight answer. Of course, the verizon landline group isn’t any better. Is anyone in favor of the verizon disembodied voice response system that greets you when you call a verizon support number? Talk about the urge to, well, let’s just say I wish I had punching bag in front of me whenever I make one of those calls.

  • Dan

    Were “The 85,000 U.S.-based employees of Verizon Wireless…” part of “one of the few bright spots in the nation’s economy.” counted before or after Verizon announced cutting 8000 jobs?

  • ken

    Verizon CEO McAdam has clearly drunk his company’s Koolaid. How can he be so out of touch with American’s anger at cell phone companies’ rip-offs? Of course he is ignorent about what goes on in the rest of the world – most Verizon phones don’t work overseas.

  • Joel Dreyfuss

    Pogue didn’t address the most outrageous charge: international roaming. AT&T charges $19.95 per megabyte for data download outside the U.S. and $1.99 a minute for voice calls (99 cents a minute, if you pay a $6 a month fee). All those charges are way out of line from the real costs.

  • Bob

    1 – Not true. They charge for initiating and recieving calls. This was probably done comparing 900 minutes for x dollars versus 900 minutes for x euro’s/pounds, etc. However, when you figure in that incomming calls in europe are FREE, there is NO F’ing way that Americans pay less. That 900 minutes in europe means 900 outgoing calls, and unlimited incoming, while in the us, its 900 for both. Do the math.

    3 – Irrelevant – just because people are “satisfied” doesnt meant they arent getting ripped off, or the phone companies can do better.

    4 – Also irrelevant – fine, so verizon is good with rural areas, that doesnt affect the argument that overall it sucks, because verizon is only one of the carriers.

  • B. Harman

    Did this quy work for ENRON and then AIG before landing this gig?

    Certainly sounds like one of that type

    B~

  • Ray

    In describing how great Verizon is for the world, Lowell doesn’t mention how they charge “from the time a call enters our network, which may be several seconds before your phone rings.” Kind of reminds me of the scam Richard Prior’s character in Superman III used to collect all those fractions of pennies…

    I don’t know what prices are in Eurpoe, but Verizon charges as much as US $0.45/minute if you go over you allotted monthly minutes. And they don’t roll over unused minutes. Now that can hurt…

    In his calculations of the cost/minute, I wonder if he divided the cost of the monthly plan by the number of minutes included in the plan or the average number of minutes actually used. You always need a plan with more minutes than you will really use due to the cost of going over..

  • Chris Herborth

    Now imagine that you’re a Canadian cellular customer and things are actually *WORSE*.

    We’ve got three carriers here (Rogers, Bell, Telus; they bought all their competitors) and they’re all in lock-step when it comes to pricing, plans, etc. This “competition” is a joke… my contract (w/Rogers) is up in about a month, and I’m seriously considering just dropping my cell service instead of getting a new phone.

    Sure I’m only one customer, but the hardware manufacturers lose a sale, and the cell carriers lose a subscriber. *shrug*

    – chrish

  • joshua2983

    don’t forget about Verizon’s ridiculous practice of keeping a chokehold on the BREW platform so that they can charge a subscription for software you download onto your phone. It’s like buying a car outright and still having to pay the dealer every month you want to drive the car.

  • Ken Z

    Big V service is slack at best,quite poor(by what one reads about their wireless net antics)by any standards to say the least.Verizon and the others DON’T provide rural areas with REAL coverage.There is not the profit stream to warrant their massive salary/bonuses each year.Their CEO is “verbal-spewing” the the rote he learned to do in College to look good and say nothing of value.This is a serious problem in this country as the Drug Co.’s,Health Co.’s and many others(including our boy at V)provide little if any real increasing value to their customers as they infer what great things they are doing…
    Just a thought,when they meet their maker,what will they do?

  • Ash

    And then add insult to injury by us Manitobans knowing that we have even less of a voice to complain where MTS Allstream (our “local” by the people off the people industry adds to the shaft for all Manitobans (for the Americans, Manitoba is in the middle of Canada!). Where and to whom can I complain?

  • Andrew D

    OK. I get it. The inmates in prison are satisfied with the food.

    Who wants to take up a pool … Who really wrote that piece? That’s a pretty poor “response”.

    I can’t wait until the guards turn their heads, then I’m busting out of the plan.

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  • John

    Lowell is a really good guy, he spoke in my class. His speech dealt with all of your gripes in a thoughtful and honest way. Go see him in person if you can, you will come away informed and impressed.

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