October 16th, 2007

One reason why it’s hard to be a wireless start-up

I’ve spoken to many small innovative companies that are looking to provide an alternative offering that is lower priced than an incumbent. It’s not a sustainable advantage unless the cost structure is fundamentally lower to provide the same level of service.

We saw it with Wi-Fi – many cities looked to build a third broadband network that they felt would be attractive because the pricing would be somewhat lower than existing players. At first we saw AT&T and Verizon fight these initiatives with legislation. Then we saw that approach fade away, and they simply lowered their entry level pricing.

Here’s another one I saw today. AT&T cut pricing on phone calls to Mexico. See story.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.

Leave a Reply