WAAROM JE ECHT IN KPN MOET BELLEGGEN
By Jeremy Phillips, Chief Technology Officer, The Motley Fool
January 8, 2013
If you think you've got a beef with your cell phone carrier now, just wait...
Chances are your service is going to get worse -- yet your bill is going to soar. Why is that?
Well, you see, over the past few years, carriers like AT&T and Verizon have been shelling out millions to companies like Apple and Samsung so they can carry their most popular -- and expensive -- smartphones...
But if you agree to a multi-year contract, you only end up paying a small portion of the upfront cost for these phones -- meaning the carrier has to cover the rest.
While this model has attracted a slew of new subscribers, it's also put a major dent in these carriers' profit margins -- not to mention, a major strain on their networks.
The traffic jam of the century
Because they can do things like run apps, check e-mail, and surf the web, the average smartphone uses 35 times more bandwidth than a regular cell phone -- and each new generation of smartphones is proving to be even more "data hungry" that the last.
For instance, the iPhone 4S uses TWICE as much data as the iPhone 4... and THREE TIMES as much as the iPhone 3G (and according to some analysts, the iPhone 5 doubles your data usage yet again!).
As a result, carriers like AT&T have seen the traffic on their networks soar 20,000% over just the past five years.
And this surge in cellular traffic has led to more dropped calls... more frequent connectivity problems... longer wait times... and slower download speeds.
Not to mention, sent cellular carriers scrambling to find a cost-effective solution (cost-effective for them, that is). And now they have...
Heads, they win. Tails, you lose.
Not surprisingly, their first move was to develop pricing plans that charge you based on how much data you use each month.
While this is certainly ideal from a business standpoint, it's not so ideal from a customer standpoint -- especially not if you use your smartphone to do data-intensive things like...
Stream songs from Pandora... TV shows from HBO GO... or movies from Netflix...
Watch news clips on CNN or sports highlights on ESPN...
Post pictures to Facebook or Twitter...
And let's be honest, isn't the ability to do these very things a big part of the reason you got your new smartphone in the first place?
Of course, if you've seen an ad for any major cellular carrier in the past year or so, you know that the second part of their plan is to get you to use their new ultra-fast "4G LTE" networks.
The most expensive 32 minutes of your life
In the same way that DSL was a major step up from dial-up Internet, the allure of 4G LTE is that it will allow your smartphone to function the way it's supposed to.
With 4G, your texts will go through instantly and image-heavy websites will load immediately. You'll be able to upload all the pictures from your latest vacation to all your social networks in a flash and watch your favorite TV shows in crystal-clear HD whenever and wherever you want.
But let's not forget... you're still going to have to pay for all these things just like you always have. The only difference is that with 4G LTE, your meter is going to be running at warp speed.
In fact, according to PC Mag, "Verizon's new 4G LTE network is so fast that you can use up your entire 5GB, $50 monthly allotment in 32 minutes."
Which means you could potentially be running up overage fees for 29 days, 23 hours, and 28 minutes out of every single month (and you thought the odds of losing money in Vegas were bad!).
So you can see why The Wall Street Journal says that the new iPhone 5 -- and other 4G LTE-equipped phones like it -- are primed to be "cash cows" for the carriers.
$36.1 billion cash cows, to be exact
Granted, it's no surprise the wireless carriers are trying to squeeze every last penny they can out of you. After all, they've already shelled out hundreds of millions just to get you to join their networks...
Now, they're all spending countless millions more trying to convince you they have the biggest and fastest network out there -- and very soon, they're going to have to put their money where their mouths are.
You see, thanks in large part to their non-stop marketing blitz, 4G LTE is finally starting to take off -- in a big way.
In fact, over just the past year the number of people using 4G networks has jumped an incredible 334% (from 16.9 million to 73.3 million) and that number is expected to grow another 181% over just the next 12 months. But that's nothing!
Between now and 2016, the number of 4G LTE subscribers is projected to grow more than 16-fold! So it's no wonder the industry experts at IHS are predicting that spending on 4G LTE infrastructure will more than quadruple -- to $36.1 billion -- over next two years.
And guess who's ultimately going to get stuck paying this tab...
Like I said, if you think you've got a beef with your cell phone carrier now, just wait.
But imagine if you could turn the tables... so that checking e-mails, watching videos, and surfing the web on your smartphone would actually make you a fortune -- instead of costing you one.
Well, that's exactly what a group of ordinary -- yet well-informed -- investors have already done and are about to do again.
In fact, by making one simple move, these everyday folks have grown their money by as much as 10,072% since smartphones first hit the shelves (allowing them to turn every $2,500 invested into over a quarter of a million dollars).
And with the meteoric rise of 4G LTE, there's almost certainly some big money yet to be made. Most investors will miss out completely -- but if you've got a few minutes and even a couple hundred dollars to invest you can get in before the next leg up.