The Thermostat and the Telephone

So I am in the Verizon store the other day paying my bill (not sure why they refuse to take a credit card on-line but it makes me periodically go in to a store) and I notice a Holiday sale so I walk around and check out some of the phones and faxes. I like the multi-function Brother Intellifax MFC620CN and get ready to buy it, when I say "Hey, I have Verizon DSL, let's comparison shop first".

The Verizon store price was around $ 268, after taxes. I find at Amazon the same item at $ 196 (including shipping) and Amazon tells me I qualify for a $ 30 rebate.  Assuming Verizon would have given me a similar coupon, it still was 25% higher. Now, I recall - hardly anyone was buying any of the hardware in the store. Most people there were asking about adding DSL (so I guess they can comparison shop on their own) or paying bills.

So I start thinking about the utility that is connectivity as I run my Quicken year end expense analysis. Sure enough - our base telephone, long distance, DSL, cell phone, WI-FI hotspot and cable service in total significantly exceed our monthly electric, water, auto fuel, lawn and other utilities. My wife calls Ireland frequently but at 10c a minute that is not the major cost driver. Nor is the cell service for the kids, which is only $ 20 a month in base cost. The biggest culprit - there are so many different base costs. As  Zoli points out the carriers themselves encourage product fragmentation.  There are also the sizable taxes (20% +) that we pay on telecommunications.

So as we brace for expensive heating bills and curse OPEC, it is useful to remember the connectivity utility also eats quite a bit of our budget. We may get excited with coming VoIP and free municipal WI-FI but we have a long way to go to "crunch" this utility spend. Not just families  - for CIOs telecomm services represent the single biggest spend category in their budgets.  And what the US industry offers today is not "innovation" by a long shot as this Foreign Affairs article points out. As it rolls out innovation it will expect quite a bit more.

One symptom of the fat in the industry - the store itself. Verizon has 19 such "Plus" stores in our area (and countless more Verizon Wireless stores).  I am sure many folks find them convenient but think of all the overhead in real estate (the store I went to was probably 1,000 square feet) and people.  They do not appear to be selling much hardware through this retail channel, and their other products like DSL and VoIP could just as well be sold through on-line or contact center channels.

If a carrier wants to de-fragment the various products and propose to us a consolidated package we are all ears...we are low maintenance and even promise to make payments on-line - if your system lets us, that is.