Verizon Wireless

Google: Verizon Isn’t Going to Open Up Enough

Bernie — Tue, 06 May 2008 10:02:43 -0400

Google has petitioned the FCC regarding Verizon’s win of the 700 Mhz C block spectrum. Google pushed hard for, and won, an “open” mandate for the winner of the 700 Mhz C block. The mandate basically says that the winner of the spectrum must provide open access and allow devices from any source to access the broadband wireless network utilizing that spectrum. Google sees this open access mandate as a gateway for its upcoming wireless Android platform, which will potentially drive millions of users towards their products and solutions. Google believes those same potential users may not be able to easily reach and use Google’s wireless focused products without that open access provision. The competitive implications are numerous because most wireless Internet access is now controlled by wireless carriers through restrictions and “walled garden” approaches. Opening it up, would allow competitors to build relationships with wireless subscribers and perhaps create the “dumb pipe” scenario for wireless broadband, where wireless carriers simply provide a pipe to the Internet, and don’t create any additional value/revenue for them. It’s the same issue currently being debated by wireline broadband carriers – should I just provide the pipe, or should I try to build more value around that access for which I can create incremental revenue.

Of course we know that Verizon and other communications conglomerates are quite crafty. According to Google, Verizon interprets the open access rules a little differently, and don’t intend on providing open access on its own handsets. Google also contends that the open access provision, while being offered through non-Verizon handsets, will be offered at presumably much higher access costs to the consumer, thus discouraging its use. Google is asking the FCC to deny Verizon’s winning bid for the C-block spectrum, which Verizon won for $4.7 billion, unless they take a more broad approach to the open access mandate. This will be one to watch, because its outcome will have profound implications on the wireless competitive landscape.

Read more insight on this issue at the IP Democracy blog.

Qwest Ditches Sprint for Verizon Wireless

Bernie — Mon, 05 May 2008 17:31:08 -0400

Qwest is announcing a new five year wireless resale arrangement with Verizon Wireless. Qwest was previously partnered with Sprint for a similar wireless deal, which obviously didn’t work out. Qwest CEO Ed Mueller announced early on in his tenure that he was unhappy with the current Sprint deal. The terms of the agreement are somewhat sketchy, but here are some interesting tidbits:

Qwest customers will have access to the full line of Verizon Wireless handsets, smartphones and BlackBerry devices, as well as high-speed broadband wireless services for e-mail, Internet access and multimedia services
Residential customers will be able to choose “wireless only” and be billed directly by Verizon Wireless, or include Verizon Wireless service as part of a Qwest bundle with their home phone, Internet and video services, and receive one bill from Qwest for all services
Once billing systems are coordinated, residential customers will be able to elect to have their Verizon Wireless service charges included on their Qwest bill

Wireless has been a crutch for Qwest, and resale agreements, while not being ideal, provide the best remedy when nothing else is available. Qwest appears to be warm to resale arrangements. They’ve very publicly said they would rather resell DirecTV than build their own triple play network. Resale seems to be there mid-term, and maybe long-term, strategy for wireless as well. Maybe Verizon offered them a better deal than Sprint. Maybe Qwest sees Sprint as the Titanic and didn’t want to get caught on the top deck listening to the string quartet band while sinking with them. Qwest obviously needs a wireless play to remain competitive. Time will tell if this is the right move. The reality suggests, it might have been their only move.

Verizon Wireless Enhances Retail Experience

Bernie — Thu, 03 Apr 2008 10:51:55 -0400

Verizon Wireless announced a renewed retail effort with the introduction of a new “evolutionary” store design and experience. The enhanced retail strategy has already made it to 100 retail stores, and will soon follow with an additional 180 outlets. The new store design focuses on creating an “experience” with hands on demos of both Verizon Wireless technology and devices, and where appropriate, Verizon FiOS and other landline broadband technology. Some of the new store features include:

A dedicated demo zone where customers can explore, experiment and learn using interactive touch-screens
More than 55 working models of handsets, PC cards and other devices for customers to try
A bill payment kiosk

AT&T is following a similar strategy with their retail outlets. The strategy goes well beyond wireless sales. Both Verizon and AT&T are trying to leverage their significant retail footprint for cross selling of all communications products and services – wireless and wireline. If executed well, it could prove to provide an advantage over cable and DBS competitors who lack company owned and operated retail stores. A key metric to observe over the coming months and years is how many quad play customers Verizon and AT&T manage to convert from their retail footprint. They have a distinct advantage in trying to upsell landline broadband and video offerings to the thousands of wireless customers, many of whom are current customers of cable and DBS competitors, who visit these stores everyday. Of course execution is key. Having the ability to upsell those landline services and effectively selling them in a retail environment are two separate things. Wireless retail stores haven’t exactly been bastions of great customer service and efficiency. Staffing those stores with the proper mix of product specialists who can cross sell will be challenging, not to mention ensuring there is an efficient service order and provisioning process. It will be worth watching.

Verizon to Raise SMS Rates

Bernie — Tue, 08 Jan 2008 21:40:24 -0500

Verizon Wireless announced they will raise text message rates to $.20 each in March. Verizon is following a similar move made by Sprint Nextel already. The previous rates for both were $.15 per message. Both carriers are apparently trying to push subscribers towards their SMS packages, which in Verizon’s case starts at $10/month for 500 messages and $20/month for 5,000.

Verizon Tells Alltel to Come Clean

Bernie — Fri, 04 Jan 2008 08:17:48 -0500

In a “sign of the times” legal claim, Verizon Wireless is suing Alltel for false advertising, claiming one of their famous “Chad” commercials is misleading. In the commercial, Alltel claims that VZW subscribers have to extend their contract when changing plans. A similar move with Alltel does not require extending a contract. Verizon is crying foul, saying since Oct. 1, 2007, VZW subscribers no longer have to extend contracts when changing plans. Only recently have some wireless carriers revisited that long standing industry wide practice of extending contracts. Many carriers still enforce such a rule. Among other remedies, VZW is demanding that Alltel stop the commercial campaign.

Lawsuit aside, you have to give it to Alltel for having the “gall” to take on their much larger wireless rivals. Alltel has always had somewhat of a “scrappy” mentality and doesn’t concede anything to their competitors.

Does Open Access Doom WiMAX?

Bernie — Fri, 07 Dec 2007 00:06:02 -0500

All of the recent news about open access may have some interesting competitive implications, and WiMAX may not be a benefactor. The success of open access initiatives is very dependent on the availability of “open” devices. In other words, the proliferation of "open" wireless devices will drive the success or failure of open access. If there are limited devices, there are few opportunities to connect to an open network. Many analysts think Verizon’s new openness centers around meeting the challenge of Google. The prevailing thought is if Google puts its influence and market power behind “openness”, well then Verizon better respond. But there is another way to look at this new found openness. Maybe Verizon’s moves have more to do with pre-empting WiMAX, than worrying about Google.

An early premise of WiMAX has been the openness it will bring. Sprint has been on record for some time about their intention to make the Xohm network open to all appropriate devices. Now Verizon says they will do the same for both their 3G and 4G networks. AT&T even recently got in the action, saying through the USA Today that they are officially open as well. T-Mobile announced long ago, their intention to be a part of the Google led open handset alliance movement. So here’s the rub. If everyone is all of the sudden open, and device availability drives the success of openness, where will the device manufactures put their focus? After all, there’s only so much silicon to go around. As a device manufacturer, I can focus my efforts on the 160 million plus subscriber universe of GSM/CDMA networks (U.S. market only in this example), or the potential of the unproven WiMAX marketplace. I think I’d place my bet with the former. So where does that leave WiMAX, Xohm, and Clearwire? Hard to say. Sprint appears to be shopping Xohm, and Clearwire had big hopes of partnering with Sprint/Xohm, which obviously didn’t happen. It’s certainly too early to declare WiMAX in serious trouble. It still has the backing of powerhouses like Intel, Motorola and Samsung. But time will tell whether WiMAX will be able to generate the device availability necessary to succeed over the long term. If I’m Clearwire or Sprint, I’m a little nervous.

Verizon Puts its 4G Eggs in the LTE Basket

Bernie — Thu, 29 Nov 2007 09:51:37 -0500

The migration to 4G wireless is in full swing. Verizon Wireless has announced their decision to adopt Long Term Evolution (LTE) as their 4G standard. By selecting LTE, Verizon joins their corporate partner Vodaphone who also has announced they intend to pursue the same 4G strategy. Both Verizon and Vodaphone plan to start trialing LTE in 2008. AT&T has hinted they may pursue a LTE strategy as well. Sprint has selected WiMAX, branded as Xohm, for their 4G migration. LTE is being developed by the third generation partnership project (3GPP), a global wireless standards body. The move to 4G promises to bring a true broadband experience to the wireless lifestyle, far surpassing today’s current broadband wireless services experienced through technologies like EV-DO. In theory, LTE is thought to be able to offer 100 Mbps wirelessly, although when it’s brought to market, actual broadband speeds are expected to be significantly lower.

The move illustrates the commitment of carriers to embrace broadband wireless as the future of telecom. The competitive implications are numerous. When 4G comes into prime time, it will certainly pressure wireline broadband (DSL, Cable Modem, etc.) in much the same way wireless voice puts pressure on wireline telephony today. Many subscribers may choose to ditch wireline altogether, choosing 4G for both their broadband and voice needs. Wireline’s saving grace may be video, but that might even be in jeopardy in a true 4G world. Additionally, you have to wonder where cable fits in a 4G world. Cable is already significantly behind telecom in the context of wireless. Meanwhile, developments like this one appear to increase telecom’s lead. Unless cable concedes the wireless business to their telecom competitors, which seems unlikely, they will have to step up their wireless game. Quickly. In fact, I don’t see how cable can build this type of wireless strategy organically. I think acquisition has to be in the forefront of their wireless strategic plan. Otherwise, they will be in constant catch up mode. In today’s rapidly evolving telecom landscape, constantly playing catch up could prove deadly.

Verizon Wireless Gets Out in Front With Open Access

Bernie — Tue, 27 Nov 2007 13:24:36 -0500

Verizon Wireless announced today that they will be “opening up” their network to wireless devices, software, and applications not offered by the company. According to a company press release, “In early 2008, the company will publish the technical standards the development community will need to design products to interface with the Verizon Wireless network. Any device that meets the minimum technical standard will be activated on the network.” I’m sure many people will yawn at this development and think it doesn’t go far enough, but we should all recognize that it’s a pretty bold step for a traditional carrier like Verizon Wireless, who is notorious for wanting to control and limit network access. Is this a calculated move to address Google’s Android project?

You have to assume that Android played a role in this. This move by Verizon may not be totally a result of Android, but I’m sure it helped move it along internally. Verizon joins Sprint who made a similar pledge for their upcoming WiMAX network (assuming it gets built). Of course Google is leading the charge here and put their money where their mouth is by leading the Android movement. There is also speculative consensus that Google intends to be a major player in auction 73 for highly valuable 700 Mhz spectrum. If that is indeed true, Google may be setting itself up to create a compelling competitive ecosystem for established wireless players. It seems as if Verizon recognizes this possibility and hence is now a champion of open access. The promise of open access, where consumers can utilize devices on a wireless network that are sold independently of that wireless carrier, may further stimulate the already quite competitive wireless landscape. It may also fuel a new wave of innovation, including devices and applications well beyond traditional cellular phones, that may positively contribute to the bottom lines of all involved. With Verizon's announcement, they join Sprint and T-Mobile as publicly embracing some sort of open network initiative. Missing of course is AT&T - the current king of closed networks thanks to the iPhone. How long will they be able to maintain their closed access "lone ranger" status?

Verizon Wireless Expands Prepaid Options

Bernie — Wed, 31 Oct 2007 22:52:54 -0400

VZW announced the expansion of their prepaid wireless options, branded as INpulse. One of the primary goals of this expansion is to tie prepaid plans with more data centric services, including V CAST. The expanded INpulse services offer three distinct plans, based on daily charges. For example The INpulse Power plan will cost $3 per day and includes unlimited night and in-network calling, and a .02/minute access charge for calls and SMS messages. Under the plans, customers are only charged for the days used.

Verizon/Google May Overtake AT&T/Apple

Bernie — Wed, 31 Oct 2007 11:00:26 -0400

The Wall Street Journal is reporting that Google is entertaining discussions with a variety of wireless carriers as it plans its gPhone launch in the next few weeks. Verizon appears to be heavily involved, but not exclusively. Google is talking with Sprint and T-mobile as well. Google is looking for a carrier partner(s) to help launch devices that will feature a mobile Google platform, or “operating system.”

The gPhone platform will include many Google derived applications including maps, calendar and messaging software. Most importantly, the gPhone will have a highly developed mobile advertising engine based on AdSense. Google sees the mobile phone as its next engine for growth. Verizon has multiple motivations for partnering with Google. Such a partnership could drive more data usage on mobile phones, which is the biggest driver of ARPU and profitability. Secondarily, a Google partnership will generate significant buzz – perhaps rivaling the iPhone buzz created by AT&T and Apple. Verizon may even be able to leverage a Google partnership to surpass AT&T and take the lead as the largest wireless provider in the U.S. Despite the enormous hype surrounding the iPhone launch, Verizon pretty much held its own, at least according to 3rd quarter numbers. Verizon added 1.6 million retail post paid subscribers to AT&T’s 1.2 million in the 3rd quarter 2007. A potential Google partnership could help push those net adds even higher and may help Verizon close the gap (or even surpass) with AT&T, which currently has a 65.7 million total subscriber lead to Verizon’s 63.7 million. Most analysts believe that a gPhone will be relatively inexpensive, especially when compared to an iPhone. It’s certainly not an “apples to apples” comparison, but Google may have enough cachet to make the gPhone wildly popular. If Verizon and Google find common agreement ground, we may see a tight race for the number one wireless provider crown.