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Network operators profit from mobile phone theft

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New York State Attorney General Eric Schneiderman recently called on mobile phone companies including Samsung, Apple, and Microsoft to create technology that could curb mobile phone theft. Schneiderman sent three separate letters to the firms in a bid to spread awareness about the growing problem of stolen mobiles.

According to a recent report, 160 iPhones were stolen every day in London last year. While it was recently reported that robberies involving a mobile phone were up 36 percent in San Francisco in 2012.

The New York Times has reported that the increase in mobile phone thefts has led some law enforcement officials to call on companies to install a kill switch into their phones. However, the real problem that needs to be addressed is that network operators have little incentive to implement technology like a kill switch.

Whether from warranty plans or new phone purchases, companies in the industry make money when mobiles are stolen. Mobile network carriers especially have the opportunity to make money from theft victims. When a user buys a phone from a carrier they have the opportunity to buy a warranty that covers them in case their phone is stolen.

The warranty gives the firms another avenue for income. If phones had a kill switch, or some other type of technology, the need for a theft protection warranty would go down immensely.

The other side of the coin is a person who doesn't have a warranty at all; these customers who opt to not buy a warranty plan may have to pay for a new phone.

Sometimes, that replaced phone can cost a customer the full retail price of the mobile. The price tag is even more egregious when you consider that most users don't even pay the full retail price of a device when they sign a contract with a mobile network to begin with.

Unfortunately, phone thefts are not something that will be fixed by companies on their own volition. As long as a company can a swing a dime off of a theft, they have no reason to do anything to stop it.

14 May 2013

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