Cellphones, tycoons and the market economy

My monthly mobile phone bill for the past decade has stood at an average of less than NIS 90. No, it isn’t because I found a cheap provider before Communications Minister Moshe Kahlon’s most recent revolution, but simply because I use my mobile phone (purchased in 2003 for a song) with moderation, and only when absolutely necessary. I totally avoid text messages, and can live quite happily without all the smartphone applications, that are generally speaking superfluous yet highly addictive.

I am not saying that everyone should follow my example. We live in a free society, and everyone can please himself. However, it should be noted that one of the reasons why people spend so much money on their mobile phones is that they and their kids are talking, text messaging, and in the case of smartphones, surfing themselves stupid. The cellphone service providers cannot be blamed for doing everything in their power to cash in.

I don’t think anyone has ever done a quantitative and qualitative study regarding what people use their mobile phones for, but from what we can hear all around us all the time, the quantity of idle chatter is endless, and only God knows what one would find if one were to check text messages and the use of smartphone applications.

Besides, the damage to the environment – both noise- and radiation-wise – is immeasurable, not to mention what the mobile phone culture has done (together with Facebook and its like) to direct social interaction, anti-social behavior, and the ability just to be without electronic diversions.

So my basic instinct is to say: If we cannot teach the masses moderation – let the masses pay through the nose. At the same time my main concern, now that the cost of using cellphones is about to fall drastically, and the prices of the phones themselves are expected to fall as well, is that the cacophony, SMS graphomania, and the number of people walking around with their faces stuck in the screens of their smartphones, are just going to continue to grow by leaps and bounds.

NEVERTHELESS, THE opening of the commercial market – any part of it – to much more authentic free competition, is a welcome development, because in many sections of our so called market economy there is very little free competition, which is supposed to be one of the main benefits to consumers of the laissez faire system.

Hopefully a way will be found to introduce real competition not only into the telecommunication market, but also into our banking system, supermarket chains, housing market and other commercial sectors, in order to bring down the cost of living.

The current move initiated by Kahlon is also important in the campaign against the scandalous wild and unchecked development of the so-called tycoons. The tycoons differ from other rich men in that their wealth and status are not based on manufacturing, or the provision of a tangible services based on expertise (I have in mind people like Stef Wertheimer, who developed the legendary Iscar Metalworking manufacturing company from a workshop in his garage, or the late Yekutiel Federman who built a magnificent luxury hotel chain from little more than hard work and dedication), but rather on casual ventures that form part of leveraged financial pyramids, which are liable to collapse at any moment.

The three basic providers of cellphone services – Pelephone, Cellcom and Partner – are all owned by tycoons, whose business strategy is based on overcharging for the services or goods they provide in order to repay leveraged bank and stock market loans, and to pay billions in dividends to those who hold their stock so that they will continue to increase their holdings.

True, as long as the party continues, we all share in the profits, since our provident, pension and mutual funds are all invested in tycoons’ shares and securities of one sort or another. But then when the party ends, and the value of the tycoons’ shares and securities start to fall (as it is currently doing) – we are the first to suffer, and there is no one around to answer for the unreasonable risks taken, or compensate us for our losses.

Of course, at this stage we do not know whether the new cellphone service providers will actually manage to establish themselves on the basis of their current meager infrastructures, and promises for sustainable cheap services.

We also do not know whether the three original service providers will really be forced to cut down services and lay off employees, or whether they will be sufficiently creative to reinvent themselves.

Nevertheless, hopefully some lessons will be learned – which is what we say whenever an economic earthquake occurs, or threatens to occur. But do we really learn?

The writer teaches at the Max Stern Yezreel Valley College and was a Knesset employee for many years.