Telcos: The Original Social Network

05.03.24 - 5 min read

An image of a person holding a phone that is obscured by abstract scribbes

On April 29, the FCC issued over $200 million in fines against the major carriers for illegally sharing access to customer location data. , “Telcos are the original social networks. They connect people, and their business model is premised on monetizing the data they collect in the process. The buyers include third-party aggregators, advertisers, and governments without warrants.”

"This development throws into sharp relief the received by new US service provider Cape. The MVNO, which has just raised $61 million in venture capital funding, pitches itself as a 'privacy-first' mobile operator that promises to collect as little personal information as possible about its customers. It's easy to dismiss services like Cape as being the preserve of paranoid conspiracy theorists. However, the FCC taking five years to give telcos a slap on the wrist for losing control over who has access to their customers' location data is an undeniably good advert for it." —

It’s now common knowledge that Silicon Valley companies amass user data to drive ad revenue. But with all the attention on Big Tech, it’s easy to forget that Big Telco has long been collecting and making money off of their users’ data. In fact, the collection and selling of data represents a huge market opportunity for the carriers—worth an estimated $376 million.

A graph that shows the value of data monetization products for telcos, split by type of telco


Your mobile carrier knows a lot about you

Telcos’ impact on privacy far outweighs their share of ad dollars. Indeed, they probably know more about you than Google or Meta. This is because of the sheer volume and granularity of information they collect, which includes your call patterns, data transactions, website visits, app usage, realtime and historical location, search queries, and more.

With access to this data, retailers can for example, of people who visited their store at a specific time. They can also link location and demographic data to shoppers’ web browsing histories and tell if shoppers are checking out competitor prices on their phones. Retailers can use this information to customize store displays and target certain customer segments at different times of day.

This explains why many of us feel like our phones are “eavesdropping” on our conversations and interactions. Telcos track and monitor our phone usage and online behaviors, combine this data and sell it, revealing and sharing more information about Americans than most are comfortable with ( of U.S. adults are concerned about how companies use their data).

Location data is among the most sensitive types of data that is collected and monetized. Both and published stories revealing mobile carriers’ practice of selling location data to third-party aggregators. While location data is used by the likes of emergency medical and bank fraud prevention personnel and law enforcement, they have also ended up in the hands of shady actors like rogue bounty hunters and scammers, or other people who apply the information in ways that could harm you.

Yet, these high-profile incidents have not succeeded in encouraging telcos to scale back on data collection and monetization. In November 2023, it came to light that the . This program enabled federal, state, and local law enforcement agencies to access phone records of Americans who are not suspected of any crime.

Oops, when did I give my phone carrier consent?

One common method both Big Tech and Big Telco employ to get your consent is during sign up, when customers agree to the Terms of Service and Privacy Policy.

While many carriers assure customers that they “will not sell your personal information,” they often provide limited details on the various ways the data may be used, transferred, or monetized. Important disclosures are usually hidden in the fine print of the carriers’ privacy policies, which are often too dense and full of jargon for people to understand. This is how customers unwittingly grant their carriers broad discretion over the use of their data.

Most carriers claim to give consumers the option to opt out of data sharing. However, these choices are not always clear and can even be deceptive, resulting in customers giving up on changing their settings or sharing more data than intended.

Enter Cape, a privacy-first mobile carrier

People have resigned themselves to giving up privacy in exchange for modern conveniences, like free email, social media, browsers, news, and more. And it’s become cliche to say about social media platforms, “If you aren’t paying for the product, then you’re the product.” But it’s absurd to be monetized as a product when you’re paying a significant bill each month to your mobile carrier.

At Cape we reject the premise that you have to forfeit control of your personal data in order to be connected.

We only ask for and share information necessary to operate a premium wireless service. We don’t collect your name, social security number, date of birth, or street address—because unlike other carriers, we don't need this information to provide you with the same reliable, high-speed nationwide coverage that you have today.

We’ll have a clean, easy-to-understand Terms of Service, because we don’t need to quietly opt you in to sharing your personal information with advertisers and data brokers. We don’t sell your data, period. And because we only collect , even if we wanted to share more of it, we would not be able to.

To learn more, join our waitlist below.

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