Price Discrimination -- An Example from the Cell Phone Industry

The major cell phone carriers charge iphone users approx $90 per month for cellular and data services on an iphone. At least one pre-paid carrier offers cellular and data services for iphone owners at $45 per month.

That pre-paid carrier is , which appears to be a partnership between Walmart (retail), Net10 (an experienced pre-paid carrier), and AT&T (cellular network), offering pre-paid services on a number of smartphones and other cell phones. (I am no expert on the partnerships, but my son has his iphone4 on straightalk and I see obvious fingerprints of all three partners).

Despite the 100% price difference, both marketing and setup costs are preventing most iphone users from switching away from the major carriers. On the marketing side, Walmart and Straight Talk are pretty quiet about the fact that iphone users can use their $45/mo service (did their AT&T partner pay them to be quiet?). Even cnn.com had a  (incorrectly) that, as of today, none of the pre-paid carriers are available for iphone users.

One the setup cost side, iphone owners need to take four separate steps to join the service:

1. Obtain an AT&T compatible iphone (new or used).  I don't think you can buy one at Walmart without signing up with AT&T or Verizon, but many other places cell them contract free.
2. Purchase a $15 AT&T compatible ,and insert it into iphone.
3. Activate the micro-sim with Straight Talk (if you had a phone number from another carrier that you previously were using with iphone or any other cell phone, at this stage you can assign it to the micro-sim).  It may take up to two days from the time that you activate and the time that your iphone can begin to place and receive calls and/or text messages.  At this stage you pay your $45.
4. 
   Set the PAN numbers on the iPhone to work with Straight Talk (this step is necessary to use data services).  One way to do this is to connect iPhone to wife and then go to go to , and the iPhone will automatically adopt the proper PAN numbers.

I suspect that knowledge of these steps will diffuse pretty quickly, and in less than a year major carriers will have to reduce their monthly cellular charges to be much closer to Straight Talk.

Communication trough mobile phone

Communication tool to explain that you need a mobile phone. First, the mobile phone, easily portable, with wide coverage area, using a wireless phone system is a communication and multimedia devices. Services provided by mobile phone after the phone model and service providers to change according to the most widely used, but they, voice calls and short message service. In addition to voice and text communication with video calls, picture messaging, video games, internet, data transfer and telephone banking services for used. Moreover Internet is used. By using online accounts such as Paypal, sms via the purchase of goods and services is used for payment of fees. To specify the antenna elements and has the touch screen and keys. First mobile phone signals in a better antenna is needed to catch up. The first models are typically when an external antenna, the antenna device, instead of advanced model of the phone's antenna to the various devices then advanced mobile phone models. After that, touch screen or keys can be found. Touch screen and keys, fingers, or through special items are available. Finally, mobile phones, according to the appearance and keypad access to the 'generally' normal (straight), and the sliding lid to be divided into three types. Developments in technology every day as a result of new mobile phone models are out. These models also feature from time.