7 Annoying Tactics From Wireless Carriers' Playbook

Carriers Riding Roughshod On Smartphones

Human society's peculiarly intense obsession with smartphones is helping wireless carriers to rake in the cash in hand-over-fist fashion. Aware that folks can't wait to get their hands on the latest devices, carriers are taking all sorts of liberties to ensure that their revenue streams remain steady and predictable.

Wireless carriers aren't charities, of course, and they're just trying to maximize their return on devices for which people are going ga-ga at the moment. Still, carriers are definitely starting to veer into the realm of being hostile to their customers, and following are seven obvious examples.

Limiting Or Dragging Feet On New Features

Today's smartphones come with all kinds of exciting features, but carriers aren't always excited about enabling them. The reason is simple: Carriers want to charge their customers more for the privilege of taking advantage of these built-in features and functions. It's like buying a refrigerator and discovering that the ice maker can't be used without paying a monthly subscription fee.

Wireless tethering, which lets people share their smartphone's data connection with a laptop, is a perfect example of carriers' double-dipping mentality. Carriers charge extra for tethering, even though handset makers have built this into their devices. Users have to unlock their phones to use these features, unless they're willing to pay the often exorbitant fees for the carrier-provided service.

Attention, carriers: If customers are paying for data, they should be able to use it on whatever device they want.

The Endless Fee Parade

Carriers love building hidden fees into their contracts so much, you'd think they were airlines. Data usage fees, overage fees, roaming fees, upgrade fees, text messaging fees -- everyone's been hit by 'em, and everyone has felt the irritation of trying to figure out why.

Some carriers have recently raised their early termination fees to lock in customers, prompting class action lawsuits and scrutiny from the Federal Communications Commission. When they're called on it, carriers usually back down on these fees. But as a subscriber, getting a customer service rep on the phone to argue your point is like a trip to the dentist's office, only with worse piped-in music.

Carrier Exclusivity Deals

Carrier exclusivity deals reek of monopolistic practices and they limit consumer choice. But carriers love 'em because it allows them to use the latest flashy new smartphone as bait to lure -- and contractually lock in -- customers.

Want the iPhone? AT&T, with all its warts, is your only option. Want the Droid X? You'll have to get it through Verizon Wireless. The worst part about these deals is that they're shadily transacted, with the details cloaked in secrecy so that customers have no idea how long they'll be stuck with a particular carrier if they want to use a particular phone.

The industry's most notorious exclusivity deal is the one AT&T and Apple have in place for the iPhone. AT&T has profited greatly from the iPhone, but its legions of iPhone subscribers have been frustrated by the iPhone's tendency to not actually function as a phone, or in many locations, as a computer.

Carrier exclusivity deals are powerful forces, though, and the minute another carrier gets the iPhone, there will be a stampede of subscribers fleeing AT&T.

"Bloatware," Or Pre-Installed Software

One of the more insidious trends in the smartphone industry is the practice of carriers loading up devices with unwanted software and trial offers for mobile television, games and location services. It's been going on in the desktop PC market for years, and now it's creeping into the mobile device world, much to the irritation of smartphone owners.

Bloatware isn't easy to remove because carriers don't want you to remove it. Oftentimes, a phone has to be rooted in order to cleanse a device of bloatware. The carriers load up smartphones with bloatware to pad revenue, and they claim it helps defray the cost of device subsidies. But in reality, the carriers are doing it because they can, and because no one has been able to stop them.

Shoddy Customer Phone Support

Ever tried to get in touch with your carrier to argue some ridiculous phantom charge, or to inform them that your phone doesn't work from inside your home? How'd that work out?

Although long hold times and bad customer service are commonplace with just about every company on the planet, wireless carriers are notoriously hard to get in touch with.

It actually makes a lot of sense from the carriers' perspective: Long hold times make it hard for customers to argue about the various unexpected fees that get added to their bills. Most people just don't have the time or patience to wait for a human to pick up. Plus, running a call center isn't cheap.

Two-Year Contracts

Two-year contracts allow wireless carriers to offer smartphones at a price that makes customers drool. But in light of the rapid procession of new devices, each more feature-packed than the last, two years is way too long to be locked into a contract. Problem is, two-year contracts are your only option with most smartphones.

Obviously, carriers rely on the covetous desires of consumers, and their willingness to fork over upgrade and switching fees, to generate a steady and predictable revenue stream. Carriers also make tons of money from early termination fees, and they've recently started raising those fees as industry competition grows more intense.

Carriers also know they can keep customers hooked on an endless treadmill of two-year contracts as long as they keep rolling out new smartphones. No one's forcing people to sign contracts, but carriers could, if they wanted to, offer shorter contract options.

The Unlimited Data Bait-And-Switch

Carriers typically move in lockstep when it comes to policy changes, and that's almost sure to be the case with so-called unlimited data plans. AT&T, after several months of whining about iPhone customers using too much bandwidth, ditched its unlimited data plans in June and introduced two new tiered pricing plans. And it's just a matter of time before other carriers follow suit.

It's ominous, and begs the question: Where does it end? As smartphone usage grows, there is going to be more bandwidth pressure on carrier networks, so it's possible that a couple of years down the road carriers will add more tiers and more bandwidth limits in order to grub more money out of customers.

The bandwidth problem could be addressed by expanding network capacity, but it's lot cheaper to blame customers and change contractual terms.