Here's One Big Reason Mobile Carriers Don't Want a 'Kill Switch' on Smartphones A new report shows how many billions of dollars companies such as Verizon and AT&T could lose each year if smartphone theft decreases.
By Jason Fell
Opinions expressed by Entrepreneur contributors are their own.
Five hundred and eighty million dollars. That's how much money consumers spend each year replacing stolen phones, according to a recent study by Omaha, Neb.-based Creighton University. So, the case for smartphone makers to create an anti-theft "kill switch" on devices should be a no-brainer, right?
Not when you take into account the approximately $4.8 billion mobile carriers like Verizon and AT&T make each year from people who purchase premium cell phone insurance, according to the report.
Lawmakers argue that if phones include a kill switch that would make mobile devices unusable if stolen, they would become less desirable targets for thieves. In turn, at least half of the 1,200 people who participated in the Creighton University study indicated they would reduce the insurance coverage they buy.
Related: Mobile Carriers Say No to Proposed 'Kill Switch' to Deter Smartphone Theft
Late last year, a trade group representing mobile carriers including Verizon and AT&T, T-Mobile and Sprint rejected an initiative started by lawmakers in New York and San Francisco to encourage smartphone makers to make kill switches on new phones. No wonder, since they'd effectively lose a significant revenue source.
But pressure still remains to reduce the growing number of phones being stolen in the U.S. each year. Between the cost of insurance and replacement phones, Duckworth estimates that implementing a kill switch could save Americans up to $2.6 billion per year.
"Overall, it seems clear that Americans want the Kill Switch and that an industry-wide implementation of the technology could significantly improve public safety and save consumers billions of dollars a year," Creighton University Heider College of Business professor William Duckworth said in a statement.
