Tag Archives: wireless

Apple as an MVNO?

Here is a great piece of Forbes about Mobile Virtual Network Operators (MVNOs), including some discussions about the possibility for Apple to become an MVNO themselves to bolster their iPod market dominance by offering music on mobiles. Overall this is a pretty good piece anticipating the positioning other potential MVNOs could pursue, such as a Wal-Mart MVNO targeting frugal and credit-challenged customers with cheap prepaid offerings.

Theres one little bit in here that still just bugs me about the objections wireless carriers seem to be having to Apple (and others) plans for music on mobiles. This comment is based on the fact that an Apple music phone is likely to support synchronization between a users music collection on a PC to the phone using a USB, Firewire or Bluetooth connection. Of this possibility a quoted analyst had this to say:

But Apple might have a problem getting the devices into consumers’ hands. Carriers will probably be loath to sell and support it, since they want to sell their own music downloads–not have customers upload tunes from home. “The carriers don’t like it,” says analyst Rob Enderle, head of The Enderle Group. “They want Apple to change the design so the phone has to sync through their networks, not with a PC.”

This insistence on the part of carriers that the music should come over their networks, and no doubt at high cost, is very annoying. Wireless carriers need to get over their bad selves. Its all fine and good to offer music over their networks as functionality to customers when customers are on the go but want audio content right away. The carriers’ wide area networks can provide some value add in the form of immediate gratification. However, theres no reason to cripple customers’ hardware like this and charge them a fortune for something they would be able to do relatively easy and with no additional expense or utility when they’re at their PCs. If Im at my PC, using a wide area network provides me no additional value over just using a cable or Bluetooth, so why would I be willing to pay a premium to have that content on my phone?

As a customer, I can tell you for certain I wouldnt buy this in a phone if downloading over the providers network were the only way to get audio content onto the phone. Id probably just stick with my trusty dedicated audio device (my iPod) which doesnt charge me a premium just to move my music on to it from my computer.

T-Mobile USA for sale? Nein!

According to Forbes, Deutsche Telekom are not considering a sale of T-Mobile USA Since I wrote on this earlier I thought it would be responsible to pass this along.

I’m not entirely surprised, but these back and forth leaks from “unnamed sources” often do have an element of truth to them even as corporate parents are denying them. Please note that even the piece references by Forbes denying that Deutsche Telekom is not going to sell the unit is citing more unnamed sources.

Perhaps these dueling sources are the same ones spreading rumours that Valerie Plame’s identity was compromised by Karl Rove.

Deutsche Telekom Reportedly Mulling Sale

The rumor around the campfire is that Deutsche Telekom, the incumbent telco in Germany and operators of one of the largest wireless operations in Europe and the United States is mulling a sale of T-Mobile USA. Here is the report from Reuters.

The cost of upgrading the T-Mobile USA network to support next generation data technologies is evidently the sticking point for Deutsche Telekom. Unnamed analysts referenced in the Reuters piece indicate that an upgrade to third generation wireless technologies (UMTS, I presume they mean) would cost approximately $10 billion. This price tag sounds a bit high to me.

According to one piece Ive read, Vodafone are not considering making a bid for T-Mobile USA. Vodafone are 45 percent partners in Verizon Wireless. The heartbreak for Vodafone has always been around the issues of brand and technology. On the brand front, Vodafone have worked very hard in their European markets to build a leading telecommunications brand. On the technology front, Verizon Wireless run their network using CDMA, which is not compatible with the GSM network which predominates in Europe. This puts Vodafone in a tough spot, not even able to leverage their US property for the benefit of their European customers roaming in the United States. They must lease roaming capacity from GSM carriers Cingular and T-Mobile USA and cede back significant lucrative roaming revenue to those carriers. Verizon have indicated several times a willingness (nay, enthusiasm) to buy Vodafones stake in Verizon Wireless, and put options have come and gone for Vodafones stake.

It remains to be seen who could make an offer for T-Mobile USA. If the executives and Vodafone truly are not interested, it may not be a carrier, but rather a set of wealthy investors, that make the bid for T-Mobile USA. With Cingulars acquisition of AT&T Wireless and Sprints pending merger with Nextel, the wireless market is well consolidated with four major wireless carriers.

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 

 

Carrier Market Share

By Revenue

Verizon Wireless 24 percent
Cingular + AT&T Wireless 31 percent
Sprint PCS + Nextel 20 percent
T-Mobile USA 7 percent
ALLTEL 5 percent
Cellular One 2 percent
Other 11 percent

These unsubstantiated figures come from TNS Telecom 1Q 2004 report linked here. I have modified the numbers in the report to reflect completed and pending acquisitions. Also please note that market shares have shifted since 1Q 2004, with a general recognition that Verizon Wireless have gained market share since the completion of the Cingular acquisition of AT&T Wireless. Here is a Forbes story on that shift. For the record this is market research on the fast and cheap.

When one looks at those numbers, it is difficult to see any room for an outright acquisition based on likely objections to a market that is seen to be too rapidly consolidating.

One possible scenario I would like to posit, as a purely speculative possibility, is that Vodafone would sell their stake in Verizon Wireless and purchase half of T-Mobile USAs infrastructure, creating a GSM infrastructure joint venture. Vodafone and T-Mobile would then effectively become mobile virtual network operators (MVNOs) on the new joint venture network. This would infuse sufficient cash to allow the third generation investments to take place and give Vodafone the freedom to enable roaming and establish their brand in the United States. This could work so long as the immediate technical way forward was agreed and capital investment agreements put in place.

Wireless Carriers as Soviet Ministries

Walt Mossberg has an excellent piece in the Wall Street Journal talking about how the major wireless carriers are acting as gatekeepers to innovation in mobile phone hardware and software. Unfortunately you need to be a subscriber to read it.

Mossberg compares the wireless carriers to Soviet ministries in that the wireless carriers believe they can decide what customers want and need better than the free market. I dont think I agree with the analogy. I dont think the wireless carriers are deciding what customers wantI honestly dont think the carriers really care all that much. To my mind the carriers have been operating largely in a very self-interested manner with little or no regard for customer wants.

A more accurate comparison Mossberg makes is that the wireless carriers are operating in the same manner AT&T operated in its monopoly days up through the early 1980s. During the years of the AT&T monopoly the phones in customers homes and offices were all leased from AT&T, which argued that this was a necessary to protect the integrity of the telephone network. The end result of this monopoly was that prices for telephones remained high, and innovation was almost non-existant.

Truth be told, in the current business model in which carriers heavily subsidize handsets, theres no small degree of legitimacy to the carriers choosing what to offer and what not to offer. Im still looking for low-cost manufacturers to offer unlocked phones directly to consumers. GSM customers would have an easier time taking advantage of this than CDMA customers thanks to the SIM card that makes it easy to join up telephone account information with a handset of the consumer’s choosing.

Rise in Mobile Virtual Network Operators

According to the Yankee Group, mobile virtual network operators are expected to have $10.7 billion in annual revenue and 29 million subscribers by 2010. For the uninitiated, a mobile virtual network operator is a service provider that does not own or manage their own network, but leases that capacity from another company. For example, Virgin Mobile in the US leases its mobile network capacity from Sprint PCS.

I hope mobile phone manufacturers are keeping an eye on this, because this has the major potential to change their business model. If the number of mobile service provider brands proliferate, customers are likely to change service brands much more often. Theyre likely to want to take their phones with them when they do (provided thats technologically feasible). I would suspect consumers are going to be much more willing to choose on emotion and fads, which will influence their phone-buying choices. Heck, the premium mobile phone makers themselves may wish to extend their brand by becoming virtual operators.

Social Networking on the Go

Theres been a bit written in the last few months about extending the value of social networking from sites like Friendster or Orkut into the real world using mobile phones and Bluetooth technology. A few months back there was this piece in Wired about Nokias MoSoSo offering which would allow users to send text messages via Bluetooth to members of their social network within a given radius.

Yesterday I happened to listen to a really excellent Podcast on this subject. Clay Shirkey was giving a talk at an emerging technology conference this past March. It seems that Mr. Shirkey and his students at NYU have been playing around with these concepts as well.

This really combines the value-add of a number of social and professional networks as well as mobile technologies in a very interesting way. When combined with Bluetooth, SMS and geolocation, social networking has the potential to change the way we interact with the environment around us in crowded situations such as bars and professional networking events. Some challenges to this combination, however, is the potential to become overloaded with potential contacts, the problem with engaging the person to whom you are actually speaking, and what Mr. Shirkey calls the ex-girlfriend factor. In other words, once youve severed a particular social connection, youre going to (desperately) want your social network to reflect that. In addition to reflecting severed social connections, youre also likely to want the ability to turn social networking off to retain a certain level of connection to the people youre actually with in a given environment.

Almost a year ago I posted a couple of times about the concept of Toothing, This turned out largely to be a hoax, but some articles began springing up in the media about commuters on UK trains using Bluetooth to arrange impromptu booty calls in the restrooms. One real potential is for mobile social networking to make the random hook-up a little bit more plausible, as well as provide the infrastructure to make sure your partner in crime matches your own preferences. A more professional approach to the mobile social networking would be professional profiles that would help people network. Say I have a profile that says I have job openings which need to be filled by a candidate with a given set of qualifications. I walk into some professional event, and somebody on the same professional network who happens to be looking for a job and meets some or all of those qualifications happens to be there. We are alerted to one anothers presence and maybe given a photo so we can introduce ourselves.

Wow the professional thing would work just like the hook-up. Either way, there’s a lot of potential here.

Virgin Mobile UK Gets It

I’m sure that Ive written here in the past to complain about an annoying habit of the US mobile phone service providers. This annoying habit is providing enticing offers on handsets and bundled minutes to new customers while sticking it to your returning customers by making them pay higher costs for new equipment, etc. Even when I was outside of my contract and they should have offered me a better price on the phone I wanted to keep me, AT&T Wireless wouldnt offer me the new customer deal. At the time I wanted the phone (the Nokia 6820) bad enough and was sufficiently satisfied with the service to say the hell with it and buy the phone anyway.

What I tried to explain to the rep in the store at the time, and what remains true, is that customers like me should be treated at least as well or even better than prospective new customers. In the age of number portability, the deal T-Mobile might be offering me on a new phone to switch represents an opportunity cost to me. By not offering the returning customer a similar deal youre opening yourself up to churn among the very customers who have hopefully already proven their value in terms of revenue. It makes no sense.

I see in this news item from the UK that Virgin Mobile UK gets this. In their new post-pay plan, as distinguished from their traditional pay-as-you-go model, customers are rewarded for the longevity of their contract with Virgin. Rewards include cheaper calling plans and free or lower cost equipment. I hope this model works well for them, and I can only hope Cingular (my provider) and other US carriers take the hint. Sayeth the article:


The approach makes some sense, and is likely to cause some consternation for incumbent carriers, whose focus always seems to be on attracting new customers with special deals and cheap handsets, rather than keeping their existing customers by offering the same level of enticements. In the age of mobile number portability, customers are generally offered little financial incentive to stick with their existing carrier, when switching can mean a cheap new handset and/or a better tariff — a perplexing situation for many consumers, who don’t understand why their history of custom is rendered essentially useless.

That said, Im still waiting for Motorola, Nokia or even a Korean or Chinese manufacturer to come out with an unlocked phone with a low enough cost and sufficiently adequate features that you wont even bother to purchase a phone from the carrier anymore. I mentioned this before when I wrote about the delay in the Motorola iPhone.

Made the Switch to Cingular

Shhhhhh… don’t tell Cingular, but I just pulled a bit of a trick on them to make the transition from an AT&T Wireless to a Cingular account. Now I got me some rollover minutes!

Following on the lead of Phone Boy, I bought a Nokia 6340i on eBay. This is a mobile that was out a few years ago when Cingular were first making the network switch from TDMA to GSM. The sexy part about this phone is that it works on both networks for a maximum network coverage, even in reaches where the GSM network isn’t fully built-out. My parents’ house is a perfect example of such a place. The 6430i I bought had been a Cingular phone, so there was no need to have it unlocked or anything. The sales rep at my local Cingular store dutifully transferred my account and gave me my Cingular SIM card.

One fun bonus of having such a big phone for a day was that whenever someone would comment on the size of the phone I would put on a faux fashionista accent and say “Big is the new small.” Hey, it was either that or make a bunch of “size queen” comments.

You may remember a few weeks back that I had paid for the codes to unlock my Nokia 6820 which I had purchased from AT&T Wireless. While European and Asian carriers seem pretty comfortable with the notion of customers having unlocked phones, this seems to scare the daylights out of US carriers. Regardless, I’m happy to say that when I installed the Cingular SIM into the unlocked AT&T Wireless Nokia it worked like a charm. My signal strength is now strong like bull. All in all a good deal without having to buy a new phone.

Now I just need to hope Cingular offer the Apple/Moto iPhone when it comes out.

Set My Mobile Free

A few days back I shelled out GBP 3.50 via PayPal to a company in the UK that allegedly provides remote unlocking codes for GSM phones. The code was received and once entered my phone displayed a message along the lines of “Phone Restrictions Deactivated.”

I haven’t tried the SIM chips of any other providers in my phone yet, but I’m currently operating under the assumption that I’ve got an unlocked phone. My hope is that I’ll be able to just get a new SIM in order to take advantage of the broader Cingular network coverage, new billing plans and rollover minutes without having to buy a new phone. Of course I am holding out now for news of the Apple iPhone.

I’m also wondering whether or not Barry and I will be able to go onto a single family plan when we migrate our AT&T Wireless phones over. He wants a new phone anyway (to use bluetooth for hands free in his 2004 TL) so doesn’t have the issues I have with getting a new phone. Hopefully we’ll be able to make the switch and enjoy a combined (and cheaper) bucket of communal minutes.

Anybody have any experience with any of this?

Don’t It Make My Blue Eyes Orange

PhoneBoy is writing about his experience taking the plunge from AT&T Wireless to Cingular. I’m still holding off on taking the big plunge myself, still a bit miffed about the fact I’ll need to buy a new phone. I know, I know– I need to get over my bad self.

For his part Barry wants the new Motorola razor phone Cingular are advertising. I’ve heard mixed reviews of Moto’s user interface, and I have to confess to being a bit of a Nokia man myself.

There’s also a part of me that wants to wait for the perfect smartphone to come along before I make the jump. Said phone would ideally be not-to-big and include both bluetooth (for the headset) and Wi-Fi (for cheap net access). I’m looking more and more at smartphones because for one they’ve gotten small enough to be really practical, and I’ve grown wary of carrying two seperate devices.