Where competition is limited, service sucks.

Competition for mobile services are limited by government fiat. Services have to buy the frequencies they use. In fact, most service is held by a small oligopoly, often Verizon on one side, Cingular (soon to be AT&T) on the other. Sprint and T-Mobile are secondary players.

The limited number of suppliers have complete control of their channels. It's hard for a consumer to know whether the store they're in is company-owned or a franchise. And it doesn't matter. Customer service is terrible regardless.

Want proof? NPD says only one-fourth of consumers, 24%, are satisfied with their mobile phone retail experience. This despite the fact that the service has become so essential in modern life that just about everyone has a phone.

The biggest problem? Turnover. No one knows anything. There are no incentives in place for anything except getting contracts signed. And since sales remain strong, there seem to be few incentives for anyone to get better.

This is a general problem throughout the chain retailing industry. Everyone wants to be Wal-Mart and keep costs as low as possible. No one has any ties to the community or loyalty to the customer.

Yet this doesn't have to happen.

Ever wonder why so many people are loyal to Costco, why they will drive 20 miles or more to get to one, even passing several Sam's Club stores along the way?

It's because the people who work at Costco are well-paid. They are loyal to the company. It shows. They're friendly. They have good lives that are tied directly to how hard they work for customers.

So the answer for the cellphone industry, as for many other retailers, is very simple.

Want to reduce churn? Want to make customers happy?

Pay your people better. This will also work if you want to fend off electronic competition, by the way.