Face It Carriers: Free Services Might Be Better Than Your Paid Ones

Verizon Wireless (s vz) today announced a new version of its smartphone navigation app, VZ Navigator VX. The software adds 3-D visuals for six specific cities, with more to follow, “real” signs and road views, satellite maps and day/night modes as well as Facebook integration. Found in the Android Market (s goog), the service costs $9.99 per month, $4.99 per week or $2.99 for single-day use. Isn’t it time that carriers stopped offering paid services that compete with comparable free ones?

Clearly, network operators don’t want to be “dumb pipes” by simply providing the data connection for a growing number of smartphones or tablets and the apps that run on them. That’s why Verizon will sell customers a paid navigation service when its handsets already offer a free one. For example, the new VZ Navigator VX is initially supported on the Motorola Droid X (s mmi), HTC Droid Incredible and Samsung Fascinate handsets, all of which have Google Maps navigation pre-installed. Consumer choice isn’t a bad thing, but I’m willing to bet that most VZ Navigation subscribers on an Android phone buy the service through Verizon mainly because they don’t know they have a similar, free service available on their handset already.

Verizon’s updated navigation service isn’t the only example of this situation, but it just popped up today, causing me to think about the services that carriers provide. In fairness to Verizon, the Facebook integration feature is something Google Maps navigation currently lacks. Is that feature worth $10 a month to some? Perhaps, but probably very few. The 3-D navigation is limited to six cities for now and without seeing it first-hand, it’s difficult to determine how much value it adds.

The fact remains that in this particular instance, Google isn’t resting on its laurels when it comes to Google Maps navigation. Since launching the free service — on Verizon’s Motorola Droid, no less — Google has added new data layers, offline rerouting and Street View in supported areas. Google is likely to continue iterating the service with new features, and I’d argue it can probably do so faster than any single carrier can. It’s worth noting that TeleCommunications Systems powers the VZ Navigator VX service (s tsys), so Verizon has to spend time, money and effort to integrate the service into its software. That explains why it can’t be freely offered, but I still question why Verizon offers it at all on an Android device.

Carriers will say they offer such services to provide value to their customers, and I’m sure for some, these types of paid or subscriber services do offer the perception of value. Unless these add-ons are head-and-shoulders above competing free services, however, my take away is that they’re effectively a money grab from consumers who really don’t know any better. Yes, that’s the very “let the buyer beware” nature that fuels our capitalist environment, but it brings up an issue of perception.

Network operators often wonder why some may view them as greedy cash cows, but they shouldn’t be surprised by that viewpoint when they keep pushing their own paid services over free ones that work just as well for most. I’d rather see the cost and effort spent in improving the network as opposed to services with marginal returns over free options. I respect the challenge of trying to create value-add services to fend off becoming a conduit to the services of others, but I’m not sold on this particular example.

Perhaps I’m too cynical here, and in an effort of disclosure, I should note that I’m not a Verizon smartphone customer currently. I was for years, but haven’t been since 2007, solely due to my choice of smartphone hardware. So for you Verizon subscribers out there who own an Android handset, do use Verizon’s paid navigation over Google’s free version? More importantly, I’d like to know why. And since the other carriers offer paid services that can be replicated by free ones, let’s open up the comments to everyone else too: Are you paying for a carrier service you can get for free?

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