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Showing posts from March, 2012

Mobile Commerce Seen as Biggest Transformation of Telecom Industry

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Mobile commerce, mobile banking and mobile payments  will have more impact than converged services, next generation networks or Long Term Evolution, a survey of 137 global service provider executives suggests.

That might come as a surprise. Keep in mind the survey was largely of revenue assuranceprofessionals, whose job roles and perspectives are different from those of marketing, operations or financial professionals, perhaps.


But the rankings might also reflect a clear recognition that new revenue sources from banking, payments and commerce will have new revenue leakage impact to account for.


Billing and security issues also will increase, and those also are issues revenue assurance personnel would be acutely aware of.



Will Google's New Tablet Store, and Tablet, Succeed?

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The fact that Google is launching an online store to sell a new line of branded tablets is not as major a move as opening a line of retail stores, something Amazon apparently actively is considering. The bigger issue is whether Google can create a successful tablet.

Some might speculate that Google will have no more success than it did when it launched the Nexus smart phone, attempting to sell it essentially over the objections of the mobile service providers. Some would have suggested that would not work.

But selling PCs is different from selling mobile phones. Tablets are more like PCs, in terms of the "necessary" involvement of any third parties. PCs, tablets and other personal devices are bought at retail outlets, not just phone stores, where most mobile phones get sold. In principle, selling tablets online will not be as difficult as selling mobile phones online.

The bigger issue is whether the Google tablet has developed, or can develop, the app ecosystem and cachet of…

Google's Android Doesn't Generate Much Revenue for Google: Maybe it Isn't Supposed To

Multi-product firms tend to sell products with varying profit margins, and different gross revenue contributions. Google doesn't appear to be any different. Most of Google's revenue is generated from advertising, and some from software licenses.

It appears the open-source Android effort has generated less than $550 million in revenues for Google between 2008 and the end of 2011.

The figures also suggest that Apple devices such as the iPhone, which use products such as its Maps as well as Google Search in its Safari browser, generated more than four times as much revenue for Google as its own handsets in the same period.

If correct, those figures would not be terribly surprising. The whole point of Android was to create a widespread mobile ecosystem that is the foundation for the actual revenue-generating activities, not a terribly important revenue creator in its own right.

Is Multimedia Messaging Service a Success, or Not?

Is $30 billion worth of revenue, on a global basis, a big deal or not? In a business that generates $2 trillion annually, perhaps not.

Still, expectations often are crucial when assessing the relative success of any new communications service.

Multimedia Messaging Service, for example, was viewed through a text messaging lens. Compared to some other services, MMS contributes a meaningful amount of revenue, though not compared to text messaging.

Portio Research thinks MMS to generate over $180 billion for the five-year period 2012-2016.
Such a demonstrable pedigree over the years has made it all the more baffling as to why such a valuable service never shook-off the industry misconception that it was a failure.

Some would say MMS launched with the unrealistically high expectations that it would mirror the success of SMS. It hasn't.

Why Developers Write First for iTunes App Store, Later for Google Play

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Money talks. The rich get richer. The big get bigger. All three rules of thumb apply to mobile app stores. Using revenue per app at Apple's App Store as an index, developers ought to favor iTunes, as they will tend to earn more than four times as much revenue as the same apps created for Google Play, the Android app store.



Amazon Appstore revenue is 89 percent of iTunes App Store revenue, and Google Play revenue is 23 percent of iTunes App Store revenue, according to Flurry.

Are "Bits" "Just Bits?" Almost Never

What is the difference between Comcast selling cable TV service and Comcast selling a IP-delivered video service? Answer: potentially only the regulatory regime each service operates under. There are, to be sure, many important business ramifications. But video services regulation now is as broken as voice regulation has become, as virtually all services and all networks use Internet Protocol.

For purposes of engineering, it often is true that "a bit is just a bit." For business and regulatory purposes, that almost never is the case. It matters who sold a bit, who bought a bit, where the seller is located, where the buyer is located, what equipment was used to receive and use the bits, what sort of network the bits moved over, and any number of other distinctions.

These days, in the video entertainment business, a key distinction exists between a "managed network and service," and the "un-managed Internet," as different rules apply to treatment of bits in…

PayPal, Gas Station Chain use GPS to Launch Mobile Payment

Regional gas station and convenience store chain Cumberland Farms has launched a new "SmartPay" mobile app that uses GPS to launch a PayPal account transaction and offers a five-cent-per-gallon discount for doing so.

The app can be launched at a supported Cumberland Farms location, and then GPS is used to determine where the user is. Once the user enters the pump number, the app automatically makes the payment and emails a receipt.

Some might argue that is perhaps a more-interesting use of "location-fixing" technology than near field communications.

Cloud Computing Will Drive Revenue, But What Types, How Much?

Service providers widely believe cloud computing will be an important source of new revenue, and there is truth to that belief, but possibly not the way many are thinking about the business. Cloud computing includes a number of discrete potential revenue streams, ranging from direct retail sales of applications to end users, either consumer or business. There is the rental of computing cycles and storage capabiltiy, as well as "platform" as a service, where a customer might rent an applications environment, often for purposes of developing new apps, for example.

By most current projections, SaaS will represent the biggest business, representing the most revenue. IaaS might be the next biggest, while PaaS will remain the smallest business, in terms of revenue. One forecast by the Yankee Group has SaaS representing perhaps 70 percent of total revenue in 2013.

North America, specifically the U.S., currently represents the largest opportunity for SaaS, and it is the most mature …

Verizon Promises Mobile Video Service

Mobile video is the benefit for end users if the Federal Communications Commission allows Verizon Wireless to buy spectrum from several U.S. cable operators. Though it is not formally linked to the spectrum sale, Verizon has agreed to provide its products to Comcast, Time Warner, Cox Communications and Bright House Networks under “agency” agreements, in return for Verizon rights to sell cable products under similar agreements.
The agency agreements allow the cable companies to sell existing Verizon products, under the Verizon brand name and retail packaging, and allow Verizon to sell existing cable products, likewise under the existing cable names and packages. If the deal is approved, the partners would, in five years, be able to buy wholesale from the other partners and then “rebrand” them for retail sale.
One suspects there will be a tie-in with the new online video venture Verizon has created with Coinstar, the owner of the Redbox DVD rental kiosk business, though that has not been…

Congress, FTC Look at "Mobile Money"

Though executives at banking and financial services firms, as well as telcos, are well aware of the key role regulators play in shaping their businesses, technology firms, especially software concerns, probably do not fully realize how much regulation ultimately will shape the mobile commerce, mobile payments and mobile wallet businesses.

At the moment, most of the activity consists of efforts by participants to get traction with key stakeholders, early in the creation of what most hope will prove to be large businesses.

At some point, regulation is going to play a bigger role in shaping the fortunes of contestants, though.

"Money" is a highly regulated function, and banking likewise is a business with lots of regulatory context. Some of those rules relate to consumer protection, while many others limit and define the lawful scope of what can be done.

So it is no accident that both Congress held hearings on mobile money in March 2012, while the Senate and Federal Trade Commi…

"Post-PC" Means More Androids than Windows Devices

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Android will be the leading platform for “smart connected devices” by 2016, overtaking Windows and iOS in units shipped, according toInternational Data Corporation. The IDC predicts that in 2016 shipments of smart phones, PCs and tablets will reach 1.84 billion. This will be more than double the 916 million shipped in 2011, which created $489 billion (£308bn) in revenue.

To Fix Anything, You Must be Able to Define "What is Broken?" In Mobile Payments, We Don't Know, Yet

Lots of consumer innovations and products fail. Some might say the failure rate is 50 percent to 90 percent or even higher. Given that track record, one would have to be skeptical about prospects for any of the proposed new mobile payment, mobile commerce or mobile wallet systems. Even if any of those efforts ultimately do manage to change the shopping, buying or paying experience, most of the current iterations will not survive.

So having a clear understanding of precisely what is to be fixed might be worthwhile. Some of us have argued that the retail, in-store payments process, in fact, is "not broken." Retailers would prefer not to pay as much as they presently do to conduct the transactions. Payment processors would like to protect those transaction revenues.

But "paying for things" doesn't seem, in North America, to be something that causes consumers lots of difficulty. Nor is the ultimate potential reshaping necessarily clear. Up to this point, there has …

LG Flexible E-Paper is Coming

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People think e-paper, flexible thin displays that mimic paper, will be important for e-reading apps. As often happens, though, people might find other uses for the technology. In some cases, it might not be the flexibility but the thin or light display that emerges as the value driver.

Some of us have been thinking it would be an ideal medium for point of sale displays, or digital signage, for example.

Content a Bigger Issue for Mobile, Other Businesses

Content is becoming a bigger deal for "screens" of all types. Mobiles already are used by 69 percent of smart phone users every day. Also, consumer and business content consumption patterns appear to be changing as tablet and e-reader ownership grow.

The share of adults in the United States who own a tablet of some sort nearly doubled from 10 percent to 19 percent between mid-December 2011 and early January 2012. That’s a doubling of mass market adoption in just 30 days, from a significant base.

The ownership of e-readers also surged from 10 percent to 19 percent over the same time period.Tablet ownership doubled in two months, in fact. 

Though iPads seem to be used for a variety of purposes, content consumption seems to be a dominant business application, though significant percentages of business users also say the tablet displaces some amount of smart phone use as well.

Web browsing, reading and news consumption are the top three usage contexts identified by professionals wor…

Smart Phones Reach U.S. Tipping Point

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Almost half (49.7 percent of U.S. mobile subscribers now own smart phones, as of February 2012, says Nielsen.  Shortly, smart phones will become the majority of U.S. devices, and the penetration will simply increase every year from this point forward. That tipping point should have lots of implications for application usage, bandwidth usage, broadband revenue and implications for future mobile retail plans and packages, especially as tablet adoption also grows. Increasing adoption of broadband-capable tablets and smart phones will mean there is more end user demand for mobile broadband plans that mimic the existing packaging of family voice and texting plans that allow multiple devices to share a single bucket of voice usage and texting.  Nielsen says more than two thirds of those who acquired a new mobile device in the last three months chose a smart phone over a feature phone.

Why Tablets Finally Succeeded

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If you look at the current media consumption habits of U.K. adults, you can see why PCs are becoming media consumption devices, and why tablets now have succeeded, when all efforts to create tablet markets have failed for the better part of a decade.

A new Ofcom report shows that media consumption is a big consumer activity, and most of the popular consumer media consumption activities increasingly can occur on a tablet or PC screen.

If you think back on the history of efforts to create mass markets for tablets, the notion was that "handwriting recognition" was a crucial capability, since it was expected that people would use tablets to "take notes," using a stylus.

In other words, tablets were conceived as "work devices." As it turns out, tablets are embraced precisely because they are convenient media consumption devices, using apps and touch, not a stylus, for interaction.

SIP Trunking, VoIP Haven't Been Outrageous Successes

How big a deal are SIP trunking and business IP telephony? Sure, those services are foundation services for any number of competitive local exchange providers. Adoption slowly is increasing. But how big a deal are those services, or unified communications, for that matter, in the grand scheme of things, for tier one service providers? You might be surprised to learn that the answer is "not much."

The penetration rate of SIP trunking in the United States is somewhere between five percent and 30 percent of all trunk lines. Some believe it’s on the lower end of this, right around five percent in the United States, about 2.5 percent in Europe and is almost non existent in Asia right now.

That isn't to deny that SIP trunking is vitally important to service providers who sell to small and mid-sized businesses, or to some enterprises and enterprise locations. It is to point out that total revenue is not large, in relation to total communications revenues.


U.S. wireless revenue i…

Business Tablet Users are Different from Consumer Users

Are U.S. business users connecting their tablets to mobile networks? You might think not, as up to this point most tablets seem to be the Wi-Fi-only models. But business users of technology behave differently than consumer users.
For starters, many business users have their devices and services subsidized by their employers. That means business users tend to spend more, and use more "for fee" services, than consumers tend to use.
You might wonder whether those changes hold for tablet use as well. Most consumers, studies suggest, buy and use their tablets with Wi-Fi connections, and tend not to buy mobile broadband subscriptions.
But iGR says a recent survey of information technology managers in small and medium businesses in the United States suggests that might not be the case for smaller business tablet users. .
More than half of the survey respondents said they use a tablet today, and the majority of those said their company either purchase or paid for the device.
IT person…

LTE Drives Optical Wireless Backhaul, Globally

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The demand for mobile data in the U.S. market alone will grow at a compounded annual growth rate of 56 percent in the next four years, according to iGR.

In fact, more mobile data will be used in the first five weeks of 2016 than was consumed in all of 2011.

The corresponding growth in mobile backhaul means a CAGR of nearly 58 percent between 2011 and 2016. In other words, about 9.6 times as much mobile backhaul will be needed in 2016 as in 2011.

Microwave backhaul traffic is expected to grow at a CAGR of 68 percent from 2011 to 2016. But fiber is king: mobile backhaul traffic over fiber experiences the strongest growth in backhaul traffic, rising at a CAGR of nearly 85 percent.

So iGR thinks optical fiber will represent about 70 percent of all backhaul by about 2016.


Telcos "Don't Get it?"

Do telecom executives really not understand what is happening in their business? That often is the argument, and one could point to any number of indicators.

In some cases, there are tactical issues, such as inability to mine end user data in real time, and apply it to change operations. One might argue there sometimes are cultural issues. Perhaps there is no such thing as a very-large organization that actually is capable of moving rapidly and efficiency as a matter of course. So inertia remains an issue.

On the other hand, are there scenarios where "knowledge" does not provide any particularly useful clues to "action and change." The divested AT&T, one might argue, never "solved" the problem of declining long distance revenue and rates, no matter what it tried. In the end, neither AT&T nor MCI found continued existence as an independent and successful provider was possible, or the best course.

"It’s well understood that OTT (over the top) p…

1.1 Billion Smart Phones, Tablets, PCs to Ship in 2012

About 1.1 billion smart phones, communications-capable tablets and PCs will be shipped globally in 2012, according to IDC. 
By 2016, IDC predicts shipments will reach 1.84 billion units, more than double the 2011 figure, a compound annual growth rate of 15.4 percent for the five-year forecast period.

The universe of smart connected devices, including PCs, media tablets, and smartphones, saw shipments of more than 916 million units and revenues surpassing $489 billion dollars in 2011, according to the International Data Corporation (IDC). 

Apple Has Presence in Half of U.S. Homes

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Half of all U.S. households own at least one Apple product, according to a CNBC survey. 


That’s more than 55 million homes with at least one iPhone, iPad, iPod or Mac computer. And 10 percent of non-owning homes will buy an Apple product in 2012. 


Homes that own least one Apple, own an average of three Apple devices.


You would be hard pressed to think of any other brand name electronics product with that level of adoption.

If Reviews are Accurate, Starbucks, PayPal Lead Mobile Payments

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The Apple App Store does not provide detailed breakouts of which specific apps are getting the most activity. On the other hand, Apple does report user review data. By that indicator, at least within the iOS ecosystem, Starbucks and PayPal are getting most of the attention, in the mobile payment area, at least on iTunes.

More Xbox Live Users Watch TV than Play Games

Xbox Live Gold members in the US are now spending an average of 84 hours per month on Xbox Live, with entertainment app usage up more than 100 percent year over year. Globally, this has led to a 30 percent increase in the total hours spent on Xbox Live around the world.


The result of this increased Xbox Live activity means that for the first time on Xbox, entertainment usage has surpassed multiplayer game usage. According to Microsoft, Xbox Live members in the US are now spending more time watching TV, listening to music, and watching movies than they are playing multi-player games. 


That's one angle about the "post-PC era." We still use PCs to work. But much of what we want to do with "computing" devices is consume content. The growing availability of devices that bring such latent demand to the surface illustrates the trend. 


That might be why Apple finally was able to break through resistance and create a new tablet market, despite well over a decade of attempt…

At Least Among Top Sites, iPad Apps are "Better" than Android Versions

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It is no secret that most developers prefer the iPad ecosystem to the Android ecosystem, for the simple reason that the sales volume is higher in the iPad realm. An anecdotal survey of top apps by PC Magazine tends to confirm that the top sites are developing "first" for iPad. 


Google Play might help, eventually, but right now the problem is just that iPad gets the first attention, and in some cases Android apps are developed for smart phones, not tablets.


Almost all of the brands are at least represented on Google Play, and some display more apps per brand on Android than on the iPad. But the Android tablet apps often simply are not as aesthetically pleasing, because, so far, developers haven't put in the work to make them more palatable. 



Amazon Launching 9-inch Kindle Fire with full HD Resolution?

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With rumors growing about three new Amazon Kindles, promised for later in 2012, perhaps the key development would be a larger-screen Kindle Fire, since the Apple iPad dominates the 10-inch screen market, at the moment, while the Amazon Kindle Fire has been the most successful seven-inch model. 


The rumored nine-inch Kindle Fire is rumored to sport a high-definition screen with resolution of 1920 by 1200 pixels. If the rumors prove correct, we can lay to rest the older argument that tablets "must" have a specific screen size. 


Another rumor has Apple preparing its own seven-inch model, as it appears users are figuring out what to do, and why, on devices with varying screen sizes. 


One size, apparently, does not fit all.

Facebook, Amazon, Apple Share One Important Trait

Apple, Amazon and Facebook share one trait. None of those firms has been accused of focusing excessively on quarterly results, staying focused on the longer-term process of creating value, something that is exceedingly difficult in an earnings-obsessed market.


Obsessing about short-term results, in fact, has likely destroyed much more shareholder value than it has created, says Henry Blodgett.


And, in many cases, it is the CEOs who have largely ignored Wall Street and focused on executing a long-term vision--like Amazon's Jeff Bezos--who have created the most value over the long haul.


Like Jeff Bezos, Mark Zuckerberg focuses his time on Facebook's product, not its business or finances. He has a clear vision for the company, which he has articulated time and again for anyone willing to listen. Facebook's focus is refreshing.

Comcast Launches Cloud-Based VoiceEdge" Service

Comcast Corporation has launched Comcast Business VoiceEdge, a cloud-based voice and unified communications solution. VoiceEdge is a fully  managed service that eliminates the need for expensive on-site equipment such as PBX and key systems and provides a predictable monthly cost. 


Additionally, Business VoiceEdge delivers a common user experience, high definition (HD)-quality voice service, and a full suite of unified communications features that help today’s multi-site organizations and mobile workforce communicate more efficiently. 


Business VoiceEdge is now available across most of Comcast’s Northeastern Division, which includes 14 states from Maine through Virginia and the District of Columbia, as well as Chicago. Nationwide rollout across Comcast’s entire service is targeted by the end of 2012.

Don't Discount Telecom Legacy Revenue

There are some interesting conclusions one might draw about the relative importance of several service provider products in global telecom markets, and in the United States, in the latest communications industry revenue forecast published by the Telecommunications Industry Association.


The most-obvious take away is the dominance and importance of wireless services. Globally, about 63 percent of all revenue, from all sources, is driven by wireless, the report says


About 25 percent of total revenue is produced by fixed line voice services. Fixed network broadband produces about 10 percent of total revenue. IPTV is about one percent of total revenue.


What might strike you about the latest report is the non-existent discussion of the impact of over the top VoIP services. The reason is simple enough: dispute all the time and energy people expend talking about VoIP, it isn't a significant revenue stream for larger service providers, on a global basis. 


That isn't to deny its importa…

Why does Apple Care About SIMs?

Apple has reportedly offered its design for a new and smaller format for subscriber information modules (SIM cards) to other mobile device makers that are part of the ETSI (European Telecommunications Standards Institute) without asking them to pay for it. 


Apple loves to control the entire experience of its products, and when it comes to the iPhone and now iPad, the biggest uncontrollable element is a customer’s wireless carrier. And having a say in the SIM card, in theory, pushes Apple closer to the long-term goal of controlling every aspect of its mobile devices, some might argue.

Also, credentials loading remains a competitive issue for would-be leaders of the mobile payments business, even though it would seem to be a mere technical detail. Mobile service providers prefer to use the subscriber information module, for the obvious reason that they control it.


Google Wallet uses a separate memory element, while many banks tend to prefer the use of a memory card.


For a bank, the slide-o…

NTIA Proposes Spectrum Sharing

The National Telecommunications and Information Administration (NTIA) has recommended that a huge chunk of spectrum used by 20 government agencies be made available to commercial mobile operations, but on a shared basis. The thinking is that clearing chunks of spectrum will be expensive and time-consuming. It would be easier to share the spectrum in some way,  the proposal suggests. 


Instead of clearing the 1755 MHz to 1850 MHz block of all government transmitters, the NTIA recommends that federal agencies and mobile operators share the airwaves, splitting use of the bandwidth. 


There are 3,100 individual spectrum assignments in that 95 MHz block, suggesting the complexity of moving users around. The details of how that sharing might work are in a report being sent to the Federal Communications by the NTIA.

Better Display is Driving iPad Sales, Study Finds

Prospective buyers of Apple’s latest iPad tablet are mainly interested in the high-resolution Retina display new to the device, according to a survey from Baird.


According to the results of the online survey, 24 percent of U.S. respondents plan to purchase the new iPad in the next three months, with 29 percent of international respondents planning to purchase it.


When asked about reasons for purchasing the new iPad, 28 percent cited the better display as the top reason, followed by the processor at 26 percent and Long Term Evolution (LTE) wireless capability at 17 percent.


Among existing iPad owners, 48 percent indicated they plan to purchase the new iPad, with 35 percent of those already owning an iPad 2.

Sprint Will Get, Can Make Money on LTE iPhones, Analyst Says

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There is some disagreement in some quarters about how well Sprint will fare, financially, as it steps up support for the Apple iPhone. Guggenheim Securities’s Shing Yin thinks Sprint will get rights to sell an Long Term Evolution version of the iPhone, and also expects the deal will not prove burdensome. 


Bernstein Research’s Craig Moffett, on the other hand, cut his rating on Sprint to "sell," based on a fear an LTE iPhone could increase prospects for bankruptcy at Sprint. 


Yin doesn't think that will prove to be a problem. He argues that Sprint would never have agreed to an expensive “take or pay” contract with Apple to buy millions of devices, unless Sprint knew it would get rights to sell the LTE version, he argues. Sprint Can Handle an LTE iPhone

Mobile Click-Throughs Keep Growing, Now will Conversions Do the Same?

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Mobile click-throughs from paid search are up on mobile devices, but apparently not conversions, according to an analysis by Marin Software. 


In 2011, advertisers grew their share of search budget on mobile devices from 3.4 percent to 8.7 percent. Marin Software expects that, by December 2012, mobile devices will account for 25 percent of all paid-search clicks and 23 percent of search budgets. 


During the same period, tablets may account for 45 percent of all mobile paid-search clicks in the United States. 
Smartphones and Tablets Changing Paid Search

Why "Telecommuting Died 15 Years Ago"

We sometimes think technology adoption is mostly about how attractive the new technology is, and what it does for the people who use it. As it turns out, that often is not the case. Sometimes, other societal forces can scuttle even a technology that offers demonstrable benefits. 


Honestly, it had not occurred to me that so much about "telecommuting," from an enterprise perspective, had such hurdles to face. 

This story about telecommuting adoption frankly was an eye opener. 



Family Plans Drive Mobile Service Provider ARPU, Churn Trends

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Family plans arguably are the single most important driver of North American mobile service provider average revenue per user (or "unit") as well as customer churn. In coming years, it would be reasonable to expect family plans to drive adoption of mobile broadband subscriptions as well, both directly and indirectly. 


The reason is simply that, on average, 46 percent of subscribers are on family plans in 2011, compared with 48 percent in 2009, according to a new survey conducted by PwC. The dip in family plan subscribers might be attributed to a growing percentage of consumers signed up on prepaid plans, which offer lower recurring prices, but typically do not allow use of "family plans."



The direct impact will come as family data plans convince more users that smart phones now makes sense, and are affordable. The indirect impact will flow from the incentives family plans provide to use more data-capable devices, more often.


Family plans historically were import…

Tablets Invade Prime Time TV Viewing Hours

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Ooyala data now suggests that people are watching more shows, movies and other videos on their iPads during prime-time TV hours, a behavior that at one time would have defaulted to PCs.

"Our data suggests that explosive tablet sales (fueled largely by Apple’s iPad) will increase the share of tablet video viewing by over 500 percent in the next year alone," says Jay Fulcher, Ooyala CEO.

About a third of daily video plays occur between 7PM and 11PM, hours that could otherwise be spent in front of cable TV or out at the local movie theater, Ooyala says.

In fact, Americans are now watching more online movies than DVD content, Ooyala suggests.

"Tethering" and "Multi-Device" Mobile Plans

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"Tethering," the ability to use a mobile device such as a smart phone to then share access with one or more other devices has been a contentious issue. Though supported as a native function on Android devices, tethering often is disabled by mobile service providers anxious to sell one more feature.

Consumers or industry observers sometimes object that this amounts to charging a customer more than once for something they've already bought, a point of view that also has been raised with respect to use of mobile VoIP.

That particular objection someday will be obviated, though, as mobile service providers introduce multi-device mobile data plans that allow a single account to share a single usage bucket across a range of devices supported on a specific account.

In some ways, service providers already are moving to make the argument moot. As more mobile service plans include a specific usage cap, it will matter less how any particular data plan is used. At some level, it matt…

European Mobile Operators are Cutting Smart Phone Subsidies

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European mobile service providers in several European markets are looking to reduce the high level of subsidies they currently offer to new and upgrading smart phone customers.


In Spain, Vodafone appears to be ending the practice of subsidizing smart phones for new customers, following a similar announcement by market-leader Movistar (Telefonica) earlier in the month.


Vodafone Spain plans to offer free finance programs for the purchase of new handsets and introduce a scheme to buy back old phones from upgrading customers.


Operating costs are the clear reason for clipping the subsidies. When a service provider subsidizes a $600 device to the tune of perhaps $400, it essentially is making a loan to the subscriber until the full amount is recovered.


What remains to be seen is the impact of subsidy changes on the rate of innovation in handsets and applications, if, as some would suspect, the end of subsidies slows down the rate at which consumers replace their handsets, and might reduce the r…