I own a Blackberry 7130. That doesn’t make me much different than any of my readers, except that, according to ATT Wireless, I’m a dinosaur.

I’ve owned the device since November 2006, which equates to 17 months in all. During that time, I’ve had to replace it once as the microphone stopped working, forcing me to use an earpiece to speak on the phone.

Through the course of ownership, I have become aware of two facts:

• Nearly instantly after acquiring this new phone, it was considered an old model by ATT. Today, it is greeted with quizzical looks from sales reps in ATT stores as if I was showing them a moon rock.

• The value of ATT Wireless stores, corporate owned or authorized reseller, is near zero once a purchase of new service or handset is completed.

To explain, each time I have sought service or to purchase accessories for the phone, the local stores could do nothing for me and justified their impotence by describing my phone as “an older model”. The replacement of my handset could not be processed in-store and I was referred to an ATT Wireless repair outlet. Yesterday, I learned that items such as replacement batteries are only going to be found via the website as the stores carry no stock except for brand new models.

The reason that wireless companies don’t generally have a loyalty program is that they don’t need one. Their business model is based on contract loyalty any brand affinity they enjoy is directly related to the term of the individual service contract.

All things being equal, the purchase decision for wireless service is driven by geography, price, and the current handset offering. Special promotions sometimes influence the final decision. Once the purchase is made, the consumer is generally locked in for up to 2 years.

Want to change your plan?

• That’s ok as long as you increase your minutes.

Want to change your handset?

• You have to wait for a year or so until you are eligible for an upgrade.

Want to upgrade earlier?

• Then pay an exorbitant price for a new phone or listen closely as the associates in the wireless stores wink at you as they suggest that you “lose” the phone when ready for an upgrade. Caution on this one: lose it more than once and your insurance will no longer cover the replacement. Oh yea, it’s unethical too…….

The root cause of the problem is that the wireless companies have evolved their business to a negative competitive state, i.e. all they can do is offer more minutes, lower prices, or bundle additional “free” services. The last frontier of differentiation is the handset.

Each wireless provider links up with manufacturers to launch new models with exclusivity. The ATT/iPhone partnership is the most visible example of this practice. The introduction was good for ATT users, awkward for anyone else. The cost of switching is still reasonably high and apathy, effort, and the (in)ease of number transfer are all barriers to changing providers just to acquire the latest phone.

With the handset positioned on the front lines of the wireless battlefront, the pace of change has accelerated, with each carrier pushing out new phones quickly to stoke the fires of customer acquisition. New models are constantly being introduced, and the advertising noise level is so high that consumers tend to tune it all out. Many new handsets seem to carry the same features repackaged in a new form factor. This frenetic pace of change has negatively affected the customer experience in transacting with wireless providers and is symptomatic of changes desperately needed in the industry.

The free enterprise system never stops teaching lessons. When companies behave in a way unpalatable for consumers, the market adapts. Don’t want to wait to be eligible for a new phone? Lose it! Want an iPhone but don’t want to change carriers? Hack the device to make it work on competing networks.

The wireless companies might want to consider these market behaviors not as something to be punished, but as guideposts to a future business model. When their own store associates are whispering instructions to beat the system, there is clearly a problem to be addressed.

My suggestion is to open up the device market, reduce contractual burdens, and provide better service at the store levels. Wireless boardroom fear is that high levels of churn will take place, but the risks are manageable. Just as with number transfer, after an initial surge of activity, each provider will land with a market share similar pre-change levels.

In the long run, giving the consumer more freedom, choice, and higher service levels in store will combine to create long term loyalty. Each wireless provider will then be competing in an open and consumer driven market.

Now that’s what I call a strong signal!

Bill Hanifin