Wireless

New Wireless Option Coming to Northeast

Bernie — Tue, 25 Nov 2008 10:54:03 -0500

San Antonio based Pocket Communications has raised $100 million and plans to launch Pocket Communications Northeast. Quite a feat in this interesting economic climate. Pocket Communications offers prepaid wireless services and claims 300K customers in its Texas markets. It offers flat rate, unlimited calling and messaging plans that range from $25 to $40 month. Pocket has demonstrated a no fear attitude by taking wireless behemoths head on, with a “no frills” wireless service. They don’t offer data plans, and don’t seem to have an intention to do so. There first launch city was AT&T’s home turf of San Antonio, TX. They utilize spectrum obtained in past AWS auctions.

Their new venture aims to take this established model into highly competitive Northeastern U.S. markets. "Pocket is really changing the unlimited wireless game, which has been successful against legacy wireless providers but mostly limited to single market footprints for many years," said Matt Niehaus, Partner, Battery Ventures, an investor in Pocket Communications Northeast. "With the Pocket Northeast launch, the company will push beyond the norm and establish a broad footprint unlimited use network, serving consumers and business users across multiple markets…,” he said. Pocket is looking to exploit value conscious wireless subscribers who are not interested in smartphones, but are interested in unlimited talk and SMS for a known fixed price. They’re a private company, so it’s hard to evaluate whether this strategy works, especially in an environment where wireless data is the fastest growing revenue segment for established wireless carriers.

AT&T Buys Centennial, Adds 1.1 Million Subs

Bernie — Fri, 07 Nov 2008 21:08:51 -0500

In a second major acquisition this week, AT&T announced it will buy Centennial Communications for $944 million. Centennial provides GSM wireless services to 1.1 million subscribers in primarily rural markets throughout the Midwest and Southeast U.S. It also has some wireline operations in some Caribbean markets. Assuming the deal is approved, Centennial’s subscriber base will push AT&T’s total subscriber count to just shy of 75 million. Even with the acquisition, AT&T will still lose its top spot to Verizon when the Verizon – Alltel deal closes. A combined Verizon – Alltel will have 83 million+ subscribers.

This acquisition is illustrative of the continuing interest in rural wireless carriers. Centennial joins Alltel, Dobson Cellular, and Rural Cellular as recent “big” rural carrier prizes for both Verizon Wireless and AT&T. Rural carrier acquisitions represent the easiest way for their larger national brethren to grow subscriber counts and fuel the growth that national wireless companies so desire. An extra incentive to rural carrier acquisition is the reduction in roaming expenses it brings to its suitors. It appears as if rural wireless carriers are increasingly becoming an endangered species. Who’s next?

Cincinnati Bell Wireless Introduces First-Ever Smart Device Family Rate Plan

Bernie — Tue, 14 Oct 2008 22:18:35 -0400

CINCINNATI - October 13, 2008 - Cincinnati Bell Inc. (NYSE: CBB) today announced a new Smart Phone Family Plan, whereby customers can save on additional premium data plans when there are two or more smart-device users in the family. Cincinnati Bell is the first wireless carrier to offer a Family Plan designed to accommodate the growing use of smart devices, like BlackBerry. Read More ...

iPhone’s Competitive Prowess

Bernie — Mon, 06 Oct 2008 23:31:39 -0400

According to the NPD Group, 30% of iPhone purchasers (and corresponding AT&T wireless subs) from June to August 2008 churned from other wireless providers. Nearly half of those new AT&T wireless subs came from Verizon Wireless, 24% from T-Mobile, and 19% from Sprint. So by NPD’s estimate, just under one-third of new AT&T wireless subs came to them as a direct result of the iPhone, and Verizon Wireless felt the most iPhone pain.

Lucky for Verizon, Sprint, on average, is losing 1 million subs per quarter in 2008, many of whom are fleeing to Verizon. So while Verizon lost a fair number of subs to AT&T and the iPhone, they made up for it by welcoming all those disgruntled Sprint customers. Upcoming third quarter numbers will provide a more revealing view of this competitive battle. So far, Verizon has fared quite well next to the iPhone challenge (thanks in part to the aforementioned Sprint). But the third quarter will be the first full quarter of the iPhone 3G bonanza. I’ve seen estimates that suggest 7 million+ total iPhone sales in the 3Q08 alone. All of those sales won’t be AT&T customers, but the majority will. Look for a blowout wireless quarter for AT&T. Now, will Sprint continue to deliver for Verizon?

Google Files Patent For Wireless Least Cost Routing

Bernie — Fri, 26 Sep 2008 10:26:40 -0400

Google has filed a patent application for a technology that would let wireless devices instantly search for and acquire the least cost wireless service available to them at any given time. The Google scenario would play out like this – 1) a wireless phone, laptop, or some other device would sniff out all available wireless transmission services, announce its requirements, and request the best offer; 2) wireless service providers would then “bid” to fulfill the request; 3) the device would then select a winning “bidder” and initiate a wireless session. This process could be done automatically and would be seamless to the user, or the user could monitor and manage the process in real time. The patent application is entitled Flexible Communication Systems and Methods. The patent application abstract is as follows, “A method of initiating a telecommunication session for a communication device include submitting to one or more telecommunication carriers a proposal for a telecommunication session, receiving from at least one of the one or more of telecommunication carriers a bid to carry the telecommunications session, and automatically selecting one of the telecommunications carriers from the carriers submitting a bid, and initiating the telecommunication session through the selected telecommunication carrier.”

It’s an interesting approach, and one that could potentially turn the current wireless service business model on its head. Talk about an evolving competitive landscape. But its chances of becoming reality (at least in its current form) are slim to none. For it to become reality, existing wireless carriers would have to endorse it and risk their growing lucrative business model of wireless subscriptions. A model that currently generates billions in revenue for them. I would gently characterize the chances of them doing that as “zero.” But I’m sure Google knows that. This move probably has more to do with feeding the debate for “open networks” than hoping to capitalize on a patented technology or process. It’s similar to the strategy they pursued by participating in the recent 700 MHz spectrum auction.

Read more about Google's telecom ambitions.

What’s Behind the Google Phone Strategy?

Bernie — Thu, 18 Sep 2008 10:44:47 -0400

The much anticipated Google phone is scheduled to make its debut September 23rd on the T-Mobile network. The phone will be co-branded with Google, HTC (phone manufacturer), and T-Mobile. It will be interesting to see how all of these brands get represented. The phone will have a retail price of $199. The Wall Street Journal quotes T-Mobile officials as saying the phone will include “aggressively priced” data plans. It will be the first phone to run Android, an operating system developed by Google and its partners. Google hopes that other carriers, including Sprint, will follow T-Mobile’s lead with Android powered phones of their own. Verizon Wireless is being somewhat coy about their Android plans, and AT&T has its wagon hitched to the iPhone for now.

It’s already clear that the Google phone won’t reach the mania achieved by the iPhone and 3G iPhone launches. Some will interpret that lack of comparable buzz as evidence of a failed launch. But I think such analysis misses the point. Google is less interested in selling handsets, and more interested in pushing a mobile operating system “open source” movement. Conceivably, success at such a movement draws more people to the mobile web – and more people on the mobile web leads to more demand for search. Google doesn’t care whether consumers access that search through Android, Symbian, or other mobile operating platforms. What matters most is more demand for search, and Google wins in that environment regardless. The mobile web is the next frontier for Google's growth. Android is simply a means to a bigger end. Google co-founder Larry Page’s quote in a recent CNET post confirms this approach, "As people get better phones, they do 20 times more searches."

Cell Phones Becoming Indicators of Social Status

Bernie — Mon, 15 Sep 2008 09:29:40 -0400

It used to be jewelry or clothing, but that’s so 20th century. Today, cell phones indicate one's social status, at least among teens. This according to a new national study released by CTIA, studying teenagers and cell phones. “Teens are a pivotal segment of wireless users. As the first generation born into a wireless society, how they use their cell phones and what they expect of these devices in the future will drive the next wave of innovation in our industry,” says Steve Largent, President and CEO of CTIA. The study was sponsored by CTIA and conducted by Harris Interactive. Among notable study findings, teens revealed:

nearly four out of every five teens (17 million) carry a wireless device daily
57% view their cell phone as the key to their social life and indicate cell phones have improved their quality of life
80% of teens surveyed said their cell phone provided a sense of security while on the go
texting is so important to them that if texting was no longer an option, 47% of teens say their social life would end or be worsened
42% of teens say they can even text blindfolded
36% hate the idea of a cell phone feature allowing others to know their exact location

These findings aren’t all that surprising – we’ve all known about the implications of cell phones, especially among teens, for some time. But it’s good to refresh those thoughts from time to time. Telecom carriers, particularly wireline carriers, must recognize that these teens will be the paying customer base for telecom services sooner than we probably realize. Building product portfolios that meet these expectations will be critical in ensuring long term competitiveness. “Teens expect mobile technology to change the social fabric of their world and they have laid the future at the feet of this technology like no other,” says Joseph Porus, Vice President & Chief Architect, Technology Group, Harris Interactive.

Sprint Trying to Claw Its Way Back

Bernie — Fri, 05 Sep 2008 09:49:17 -0400

The latest J.D. Power rankings on cell phone call quality are out and the findings aren’t terribly surprising, but there are a few caveats. Verizon Wireless rates the best for call quality in the Northeast, Mid-Atlantic, and West regions, and tied with Sprint in the Southwest region. Alltel ranked highest in the Southeast and tied with U.S. Cellular in the North Central regions. Despite the iPhone buzz and success, AT&T didn’t do too well, ranking below average in five out of six regions. As suspected, call quality is an important factor for consumers when choosing a wireless carrier. According to J.D. Power, “among wireless subscribers who say they ‘definitely will’ switch their current wireless provider, problem rates average fifty-one problems per one hundred calls (51 PP100), which is five times higher than problem rates of customers who report they “definitely will not” switch in the next 12 months (9 PP100).”

While Sprint’s ratings are not terribly impressive, they are improving. Sprint is making a concerted effort to address quality and customer service under new CEO Dan Hesse. Properly addressing those issues takes time – a long time. There is a perception issue to overcome. As the sprint connection blog points out, Sprint’s perception problem probably impacts their quality ratings, making it doubly difficult to properly address them. They’ll need to step up their game even more than they already have, because call quality, real or perceived, will be a huge factor in stopping their precipitous fall. “With an increasingly competitive environment and the complexity of services often used in conjunction with cell phones steadily on the rise, carriers that offer superior network quality will improve their likelihood of attracting new customers and will increase customer retention,” said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. The J.D. Power survey reveals that 14% of current wireless customers “definitely/probably” will switch wireless providers in the next 12 months. That equates to 35 million+ subscribers. How many of that number are current Sprint customers?

Rural Wireless Carriers Want USF Back

Bernie — Wed, 03 Sep 2008 23:16:00 -0400

Several rural wireless carriers and the Rural Cellular Association have asked a federal court to review the FCC interim universal service fund (USF) cap ruling affecting eligible telecommunications carriers (ETCs). The cap temporarily prevents ETCs from dipping into the USF. ETCs are a relatively new phenomenon, and before the cap, their “eligibility” allowed them to receive comparable USF subsidies to the wireline carriers serving their same market. Advocates of this policy argue that it expands wireless service to communities that normally wouldn’t have it. Opponents of this policy say it provides a windfall to wireless carriers and artificially props up competition. There are valid arguments on both sides, but one thing is clear. The growth of these subsidies is rising exponentially. RCR Wireless reports that these funds have grown from $1.5 million in 2000 to more than $1 billion in 2007, with the majority of those funds going to wireless ETCs. The issue is a complex one, with no easy answers. Whatever the outcome, the competitive implications within these markets will be far reaching.

Cox: We’ll Take 20% Market Share for Wireless

Bernie — Tue, 19 Aug 2008 15:03:06 -0400

In a revealing presentation, Cox President Patrick Esser told the Progress and Freedom Foundation's annual tech policy summit in Aspen, Colorado that they intend to capture 20% market share for wireless service. Rather than join the Clearwire alliance like their other cable brethren, Cox is going it alone through its recent acquisition of 700 MHz spectrum. As reported by PC Magazine, Esser says he “…won't divulge too many secrets here, but we'll focus on providing simple calling plans, integrating all our services into one device with a consistent cross-platform interface; and making our content and applications mobile.”

Pretty bold comments considering the hyper-competitive marketplace for wireless. Achieving 20% penetration would be very impressive, especially for a company with no wireless experience. But Cox competitors shouldn’t take them lightly. They’ve been quite successful in capturing significant voice business from their telco competitors, and at one point, they had no experience with voice either. The pending move into wireless by the cable industry will be interesting to watch. They failed miserably with Pivot Wireless. But to their credit, they’re marching forward with a wireless act two. When and if they get it going, it will open up a new front in the bundling war between telco and cable. PC Magazine summed it up nicely with this Esser quote, “Frankly, we're in a street fight today for customers in every single aspect of our business – from the Bells and the satellite guys, to the wireless carriers.” Happy hunting.