Potential Impact of "Wireless Only" Packaging

It's too early to say whether Sprint Nextel's new "Any Mobile, Anytime" program will revolutionize mobile market packaging and pricing the way AT&T's "Digital One Rate" did in abolishing the distinction between local and long distance calling in the broader mobile business.

It's too early to say whether a rumored or possible merger between T-Mobile USA and Sprint Nextel will occur, creating a strong third carrier to challenge AT&T and Verizon Wireless.

Likewise, it is too early to know whether a strong "wireless-only" carrier can compete effectively against integrated carriers with wireline and wireless assets.

But there are glimmers. Sprint Nextel's new "call any U.S. mobile, in the United States, for one flat fee essentially merchandises voice services to secure new data plan revenues. The new plan attempts to capitalize on the growing population of mobile numbers, the growing number of users who only use mobiles and who also value Web services and mobile access to those services.

The new plan also provides a direct incentive for mobile users to call other mobile numbers as opposed to landline numbers that might reach the same called party.

For some segment of the buying public, the new plan might also nudge some customers away from prepaid wireless, especially those who like the idea of a fixed monthly payment and also want access to many of the latest handsets, something prepaid plans do not offer.

Under the new plan, the potential incremental cost of a Sprint Nextel postpaid calling plan and an unlimited prepaid plan is about $20 a month.

The problem for most potential buyers is that most users probably do not have a good understanding of what percentage, and what number, of monthly calls actually terminate on wireless numbers. That understanding is helpful as the $70 data plan Sprint Nextel offers comes with 450 landline minutes. If half of any given user's calls are terminated on mobiles, that is equivalent to a standard calling bucket of about 900 minutes.

Taken as a whole, Sprint Nextel's marketing initiatives will tend to push consumers in the "wireless only" direction. A potential merger with T-Mobile would create a huge new company with a vested interest in pushing such initiatives even further.