Showing posts from February, 2012

What's the "Best" Way to Charge for Bandwidth?

Comcast recently reiterated that it has no current interest in usage-based billing for consumer broadband access. Time Warner Cable has tended to support the notion. Telco executives tend to favor usage-based billing, as that is the industry legacy and mainstay.

But there are differences. Tier one service providers tend to be much more strongly favor in favor of charging customers for data on a usage basis than tier two and tier three service providers.

In large part, such discussion of retail packaging is happening because volume growth for broadband access services, especially on mobile networks, threatens to outstrip supply.

That's one compelling reason why mobile service providers might like to manage peak-hour traffic more gracefully, possibly by using charging mechanisms to create incentives for off-peak consumption.

In principle, one might argue that capacity upgrades “solve” the problem. That might be true, but only to the extent that capital investment is offset by revenue …

Mobile Search is Universal, Local Shopping is Going to Be

Google is big on mobile commerce, for any number of reasons, Mobile represents the biggest advertising revenue stream nobody yet dominates. And mobile commerce represents potentially the biggest change in retailing since the advent of online shopping. 
Across most of six markets, including the United States, United Kingdom, France, Germany, Spain and Japan, roughly 60 percent of smart phone users are searching because of an ad they’ve seen offline or in a store.

Another reason is big on mobile and smart phones is that mobile users search while on smart phones. 

Some 99 percent of smart phone users in Japan have used a search engine on mobile.

This means that practically everyone who’s gone online on mobile has searched on their phone.

Mobile search is a frequent activity. In most of these six countries more than 75 percent of smartphone Internet users search at least once a week.

The study suggests 92 percent of Americans use their smart phones to look for information about local businesse…

We Don't Have a Mobile Payment Problem; We Have a Mobile Shopping Problem

“Consumers don’t really have a mobile payment problem,” says Jack Stephenson, director of mobile, e-commerce and payments at JP Morgan Chase. “Ninety-five percent of the time, paying with cash and credit cards actually works pretty well. Consumers have a mobile shopping problem. There’s a difference. ” Mobile Shopping Problem

You might say roughly the same for retailers. They don't have a mobile payment problem, either. Retailers only have a mobile sales problem. And though it is a legitimate argument that no mobile payment scheme really succeeds without consumer adoption, neither does mobile payments succeed without retail merchant adoption. 

On the other hand, all existing stakeholders in the payments revenue stream are trying to figure out how to make themselves indispensable in a new mobile payments value chain, so that the risk of being relegated to a smaller role, or no role, is minimized.
That's one reason JPMorgan Chase & Co. might have invested in GoPago, a provider…

HTC Jewel for Sprint?

HTC's new line of "One" devices coming to Verizon Wireless and AT&T networks obviously raises the question of what might be coming for Sprint, which has been selling HTC Evo devices for a couple of years.

Some speculate the device is codenamed the "HTC Jewel."

Presumably the Sprint version will feature the  large screen Evos have sported, with the same high-definition display.

Sprint has tended to release a new Evo model every year, about March, so it might not be unusual if any new "One" device appeared about that time.  HTC Jewel

Facebook, 30 Companies Want to Create Web Platform for Mobile Apps

A coalition of 30 technology companies hopes to turn the Web into a competitive platform for building mobile applications. They have launched a Core Mobile Web Platform (coremob) community group through the W3C to provide a venue for collaborating on next-generation mobile Web standards.

Facebook and Mozilla are among the leading members of the group. The effort to make the mobile Web a competitive app platform represents one more challenge to service provider and app store "control" or influence over mobile applications.

Facebook also announced the release of Ringmark, a test suite for evaluating the capabilities of mobile Web browsers. 

The tests will help developers make informed decisions about what features they can safely use in various mobile Web environments. Facebook hopes such information will help developers create browser-based apps that run as fast, and as well, as native apps. 

The business implications are clear enough. Mobile apps need app stores to succeed. App…

Will IMS Fail? In Other Words, Does OTT Win?

If you have been in the telecom business long enough, you have seen a few different "next generation networks" come and go with somewhat mixed market success. 

ISDN was, for some, the first such network. Then there was B-ISDN, known better as "asynchronous transfer mode." 

Then there is IP Multimedia Subsystem, whose ultimate success seems yet uncertain, if its fundamental architecture and goals certainly will be a foundation of future networks. 

And now there is Rich Communications Suite, which builds on IMS. Observers might further note that picture messaging, essentially a broadband version of text messaging, likewise has failed to garner much success.

Pessimists might point out that, so far, none of the would-be "next generation networks" has been a raging success.

To be sure, the functions often are accomplished, but sometimes in other ways. Who would have guessed that a "legacy" protocol such as IP would become, as much as anything else, the …

Vodafone, Visa Form Mobile Payment Partnership

Vodafone Group is launching a mobile payments venture with Visa, using near field communications and Visa prepaid accounts to let customers pay for goods and services with their mobile phones.

Vodafone, the world's largest telecom company by revenue, said the companies will work together to develop Vodafone-branded services to the U.K. company's base of 398 million customers in more than 30 countries

These services will be launched later this year in Germany, the Netherlands, Spain, Turkey and the U.K., with rollouts elsewhere in Vodafone's global portfolio to follow.

NFC-enabled phones currently on the market include Samsung Electronics Co. Ltd.'s (005930.SE) Galaxy S II and Nokia Corp.'s (NOK) 700 model. Vodafone, Visa Form Mobile Payment Partnership

Mobile Banking Grows, Fiserv Finds

As other studies also have shown, consumer use of mobile banking, and willingness to use mobile banking services, continue to grow, a new study sponsored by Fiserv has found.

When asked if they had used a mobile banking service in the past month, one out of four online households stated they had, and those that use other digital services such as online banking, bill pay or e-bills, were even more likely to have used a mobile banking service.

Some 30 percent of both online banking and bill pay users had used mobile banking while 44 percent of e-bill recipients had used the service.

The majority (60 percent) of mobile bankers used the mobile browser on their phone to access their mobile banking service; 41 percent used a downloadable application (app); and 32 percent accessed the service through text messaging.

According to the survey, 40 percent of mobile banking users have paid a bill using their mobile phone as compared to 28 percent in 2010. Some 32 percent used their mobile phone to tr…

When Will Mobile Service Providers Get into Mobile Advertising?

By the end of 2011, eMarketer estimated late in 2011, 38 percent of US mobile users would have a smart phone and 41 percent  will use the mobile Internet at least once each month. Both of those trends are a necessary, but not sufficient foundation for mobile advertising, which is a fast-growing but highly fragmented and still small portion of overall ad spending and even of online ad spending.

That fragmentation explains why, even though many tier-one mobile service providers have undertaken internal reviews of growth opportunities, and have identified mobile advertising as among the handful of new businesses that could generate a significant new revenue stream for a tier one carrier, few have made significant moves yet.

The issue is simply that it is hard to "move the revenue needle" for any business already booking annual revenues in the scores of billions. When that is the case, a “small revenue opportunity” of scores of millions does not materially change business result…

Who Wins Wallet Wars?

The existence of mobile wallet services operated by Google, PayPal and Isis raises an obvious question: which contestants will “win” the battle to become the dominant or leading wallet services? In principle, one might argue that over-the-top application providers, mobile service providers, clearinghouse networks such as Visa or MasterCard, banks or other payment specialists could emerge as the leading providers of such services.

Researchers at ABI Research say it is the likes of Google and Apple that ultimately will lead the market, though mobile service providers are highly likely to claim the most share initially.

While mobile service providers will havethe majority of NFC-based mobile wallet users early on, their market share will erode between 2012 and 2016 as Google and Apple assume greater share.

“By the end of 2012, Google will prove that Google Wallet is a hit with consumers,” says Mark Beccue, ABI Research senior analyst. “By 2014, we will see Google Wallets supported alongsi…

Isis Signs JPMorgan Chase, Capital One, Barclaycard

Isis, the mobile wallet venture owned by AT&T, Verizon Wireless and T-Mobile USA, says it has gotten deals with JPMorgan Chase, Capital One and Barclaycard that would allow the bank customers to purchase goods by making payments using Isis-capable mobile phones. Isis Signs Three Banks

The deal means that Chase, Capital One and Barclaycard credit, debit and prepaid cards can be placed into the Isis Mobile Wallet. Starting in mid-2012, consumers then will be able to shop at participating merchants in Salt Lake City and Austin, Texas, where Isis is running trials. Isis deal

Device Subsidies Do Matter

A recurrent complaint in some quarters is that mobile phone subsidies, tied to service contracts that recoup the cost of the subsidies, inhibits consumer freedom to change service providers, and there is some logic to the thinking.

But it also is true that without such device subsidies, consumer adoption of the latest devices, and therefore the pace of innovation in the mobile apps space, would be less. 

One clear example are buy rates for Android and Apple iPhone devices in countries where users generally buy subsidized devices, compared to markets where users generally pay the full retail price of handsets. 

As this chart from the Wall Street Journal illustrates, subsidies have a big and positive impact on consumer willingness to buy and use either Android smart phones or Apple iPhone devices. 

AT&T to Intro Data Equivalent of Toll-Free Calls

Consumers and businesses used to the idea of toll-free calling will get the bandwidth equivalent under a new plan AT&T Inc. is developing for content providers and developers of mobile applications.
Under the new plan, the app provider would be able to pay AT&T for bandwidth consumed by app customers, instead of the app users having the usage billed against their service plans.
In some ways the plan is analogous to the way has been paying the bandwidth charges to deliver content to Kindle e-readers. When users buy a book, newspaper or magazine, the delivery cost (bandwidth) is part of the retail cost of buying the product.
Some app providers will be leery, since the practice is one more way app and content providers could wind up paying delivery networks when consumers use their apps or services.
That might be quite a valuable feature for consumers who want to purchase mobile video content, for example.

AT&T to enable toll-free bandwidth

Android, Microsoft Have to Sell Ecosystem, Apple Doesn't

Apple, Microsoft and Android are recognizable and recognized brands. But Apple has one advantage Microsoft and Android do not. Apple can promote its brand without worrying about promoting an ecosystem. Android and Microsoft, to some extent, must do so. 

That's the challenge Google will have if it really wants to double the number of Android tablets it can sell in the coming year. Android is, in part, a choice to embrace an application ecosystem, not just a specific tablet or device implementation.

Mozilla Bets on New Mobile Operating System

Can another new operating system get traction in the global mobile service provider market? Mozilla and some service providers hope so.

Mozilla’s “Boot to Gecko” project aims to create devices that can "boot to the web," running an HTML-based platform that works as well as other operating systems, at much-less cost, allowing production of lower-cost smart phones.

Those of you familar with Google’s Chromebooks will understand the idea. Some would say the “Open Web Devices” initiative uses the Android kernel but has an entirely new layer on top based on HTML5. 

Others might prefer to say B2G uses some of the same low-level building blocks used in Android (Linux kernel, libusb), but is not based on Android, and will not be compatible with the Android stack (in particular B2G will not run Android applications).

It’s essentially a complete phone system run on web technologies that gives the on-board software access to core APIs through an embedded version of Firefox. That, in turn, …

HTC to Brand New Smart Phones Using "One"

HTC has had a bit of a branding issue since deciding it did not want to be a contract manufacturer, but rather a retail brand in its own right. Some would argue "HTC" hasn't quite got the zing. 

Now HTC seems to have settled on "One" as its retail brand. 

Some would argue HTC has more pressing problems, though. The company’s sales for the month of January 2012 were down by more than 50 percent compared to the same month of 2011, and revenues have been lower than anticipated. 

HTC says it had revenues of $564 million ($16,615 million Taiwan dollars) in the month of January 2012, compared to $1.2 billion (NT$35014) in January 2011. 

In 2010, by some estimates, the company was making four out of the top-five best-selling Android handsets in the U.S. market.

Mobile Service Providers to Offer "Joyn" Messaging

Smart phone adoption is driving mobile service provider mobile broadband revenue. But smart phones also are cannibalizing service provider voice and messaging revenue.

In 2012 the increase in smart phone penetration will cause voice and messaging revenue erosion of 3.9 percent in Western Europe and 1.6 percent erosion in Eastern Europe, according to Informa Telecoms & Media.

In fact, every increase of 10 percentage points in smart phone penetration in a given market costs Western European operators a 0.5 percent loss of voice and messaging revenue, according to Informa calculations.

For such reasons, Spain's Telefonica, the UK's Vodafone, France's Orange, Telecom Italia SpA and Germany's Deutsche Telekom AG are set to unveil a new messaging system tentatively called "Joyn" at the Mobile World Congress, according to the Wall Street Journal.

Joyn is a service made possible by the “Rich Communication Suite,”  essentially messaging applications built on IP Mult…

GetJar Launches "Universal" Virtual Currency for Android

GetJar, acknowledged to be the world’s largest independent app store, has launched GetJar Gold virtual currency rewards that can be spent at GetJar, Android Market or

The loyalty rewards are an enhancement to the existing GetJar Gold loyalty program, but exemplify one of the first virtual currency systems that not only are loyalty-oriented but allow currency redemption across much of the Android ecosystem.

Consumers earn GetJar Gold virtual currency by downloading any Android apps, and can spend it on premium apps and in-app purchases. GetJar Gold virtual currency can be used with any Android apps from any app store, including GetJar, Android Market and Amazon.

Developers can use the GetJar SDK to support GetJar Gold virtual currency for in-app transactions as well as upgrades from free to premium versions of their app. Virtual currency collected by app developers can be exchanged with GetJar for real dollars. GetJar Virtual Currency

Samsung to Unveil 10-Inch Galaxy "Note" Tablet

It increasingly is getting to be the case that manufacturers of 10-inch tablets want seven-inch models, and makers of seven-inch devices think they have to compete in the 10-inch form factor as well. Samsung is the latest supplier to make that move to provide both 10-inch and seven-inch models.

29% of Smart Phone Owners Use Devices for Shopping

New research from Nielsen reveals that 29 percent of smart phone owners use their phone for shopping-related activities.  And one big difference between how smart phones get used, compared to PCs, is that people use their mobile devices while they are in stores, in the process of shopping. Retailers might not always appreciate that face, since users often are comparing prices at online or other physical locations.  But people also appear to be checking product review while in stores.  Top activities among mobile shoppers include in-store price comparisons (38 percent  of mobile shoppers), browsing products through their mobile Web or apps (38 percent h) and reading online product reviews (32 percent).  Apps, which account for the majority of mobile phone time in the U.S., may be the key to shifting consumers from browsing products on their phone to making purchases on the spot.  Although only nine percent of mobile shoppers have used their phone to pay at the register, the desire to do so i…

3 Outcomes for Mobile Commerce: 2 are Negative

It never has been terribly easy to describe the mobile payment ecosystem and it arguably has gotten more complicated now that so much focus is going to mobile wallet and mobile commerce functions.

Mobile payments originally might have been more centrally involved with transforming payment and banking operations and experience. But a broader emphasis on mobile commerce now promises to potentially change “shopping” in a broad sense, with a potential blurring of online and offline shopping experiences.

In fact, you might now consider “mobile payments” to be one segment of the broader “mobile commerce” business, including mobile payments at retail locations, mobile wallets for consumer identity and loyalty functions, personal finance and banking, money transfer and then marketing and incentive operations for advertisers and retailers.

At the very least, there is potential for rearranging value and hence participant revenue within all the existing legacy businesses in the retailing, banking…

Deutsche Telekom Invests in Pinger

T-Venture, the venture capital arm of Deutsche Telekom, has made a  $7.5 million  investment round in free messaging provider Pinger. Pinger isn't the first over the top application or service Deutsche Telekom has invested in. In 2007 Deutsche Telekom lead a round of investment in Jajah, a significant provider of over the top voice services. 

Telefonica now owns Jajah. 

Those investments in over the top messaging and voice are not as odd as one might think. It certainly is true that such over the top apps increasingly are competing with, and displacing, traditional mobile service provider voice and messaging services.

On the other hand, even though over the top services cannibalize legacy revenue, such apps also allow firms such as Telefonica and Deutsche Telekom to make revenue and get customers outside their traditional service territories. 

Much as firms acquire other firms in new areas to gain the additional customer base and revenue, so over the top apps, even when cannibalizing s…

Google Selling Clearwire Stake

Google is selling its stake in Clearwire, amounting to 29.4 million shares of ClassA common stock, at $1.60 per share. The sale ends one Google experiment aimed at spurring broadband deployment, much as Google has experimented with municipal Wi-Fi networks, is testing a 1-Gbps local access network in Kansas City, Kan. and Kansas City, Mo.. and has given support to white spaces initiatives. 

It has been a while since Internet service provider executives seriously wondered whether Google had aspirations to become a service provider itself, either in the mobile or fixed realms. Google arguably has the money and complementary assets to do so. 

To be sure, Google has been investing in long haul facilities since at least 2005, but that is similar to Google investing in its own data centers. Both are core supports for many of Google's businesses. That doesn't mean Google wants to be in the local access business, really. 

Of course, Google did announce that it was prepared to bid as muc…