The $10 Phone Bill (Or A Free Market Strategy In Action)
The $116 billion business of selling cell phone calls in the U.S. faces a long, ugly decline. That petrifies just about everyone in the industry except Roger Linquist.
With his gray hair and grandfatherly demeanor, Roger Linquist hardly seems like the kind of guy to kneecap a $116 billion industry. Yet the 71- year-old chief executive of MetroPCS cheerfully and brazenly promises to do just that. He aims to bring down the lucrative business of selling cellular phone calls, a business that for four decades has grown bigger and richer with every passing year.
MetroPCS, which Linquist founded 15 years ago, is now the fifth-largest cell phone network in the U.S.–a distant fifth behind the giants that dominate the business: Verizon, AT&T, Sprint Nextel and T-Mobile. Linquist argues that his upstart company’s $3 billion in revenue and 3% market share give it the freedom to remake the industry. He means to help turn cell phone calls into just another cheap digital commodity, the same fate that has already befallen the rest of the phone business and doesn’t much care what happens to his giant rivals in the process.
The Big Four are scrambling to offset any drop in calling revenue by shifting their focus to new wireless opportunities. They are just beginning to spend tens of billions of dollars deploying new “fourth generation” cellular technology to greatly expand their data-moving capacity and make all sorts of new wireless devices possible, from e-books to dog collars that let you track Fido’s whereabouts. Linquist just signed contracts to buy the same 4G technology for a very different reason: He plans to use it to radically improve his ability to carry phone calls–and do it much more cheaply.
(Excerpt) Read more at forbes.com …
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