Cellphone Call Rates: The Elephant in the Room

A Personal View – May 2014

 The cellphone industry has reflected all the attributes of a rapidly expanding industry. Like the automobile or the railroads before it, initially there was insatiable demand for their product which created a bubble of overinvestment and overgenerous returns on investments.

These industries appeared not to conform to the script of other industries where low margins, excessive competition and continual cost cutting dominated the playlist. Making a buck became possible only to the most cost effective and efficient.

On reaching maturity, the bubble in these revolutionary products ineluctably bursts. A plethora of competitors are no longer sustainable where only the top three make money: the top performer – super profits, the second placed performer – above average returns whereas the third placed is marginally profitable with the remainder never making a satisfactory return on their investment.

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