Showing posts with label Amp'd Mobile. Show all posts
Showing posts with label Amp'd Mobile. Show all posts

Friday, September 11, 2009

Sprint Any Mobile, Anytime: Serious Data Mining

With the release of Sprint's new "Any Mobile, Anytime," a new feature of Sprint "Everything Data" plans that allows calling to any U.S. wireless number, on any carrier's network, at any time, without additional charge, as well as the coming AT&T "A-List," which allows unlimited calling to any five to 10 numbers, it is getting even harder to figure out what a "minute of voice use" actually costs.

T-Mobile USA has had "myFaves" for some time, allowing unlimited calling to any five phone numbers, while Verizon has had a "Friends and Family" calling circle feature for years, as well. Both of those plans, like the new AT&T plan, allow the service providers to tout an enhanced feature that makes calling to some phone numbers free.

The Sprint plan moves beyond existing "friends and family" or "calling circle" plans that typically include only mobiles on a single carrier network, or only a limited number of phone numbers on any network. The issue is that the new Sprint plan, like existing plans available from AT&T and Verizon, which make all calls to other AT&T or Verizon mobile customers free calls, also introduces an element of uncertainty into user thinking about how many "out of network" minutes actually are needed on a monthly basis. That's the new element of uncertainty on the consumer end of the service.

Beyond that, large calling circle plans also have introduced a bit of uncertainty on the service provider end, at least as regards the profit margin on voice calling to "off network" numbers. One can assume that the marginal cost of terminating a domestic "on network" mobile call placed from a domestic "on network" number is quite small.

One also can assume that domestic off network calls within a purchased bucket of minutes carry a pre-determinded margin. So the really profitable scenario is when a user exceeds a bucket ("breakage") and has to pay a really-high incremental price per minute, or when users buy buckets of minutes they do not use.

Sprint's new "Any Mobile, Anytime" program is risky to a certain extent because Sprint might not fully understand how its users will behave once they have access to the new feature. Presumably quite a lot of data mining already has gone on, allowing Sprint planners to predict past termination behavior, especially the number of placed calls from Sprint mobiles that terminate off network to landlines and other mobiles.

It was just that sort of rudimentary data mining that lead all the carriers to craft programs that allow unlimited calling nights and weekends, for example, when usage is light enough that additional calling does not tax the networks.

But Sprint's data mining on behavior of its "unlimited" plan customers might have provided enough new insight into changes in user behavior that the company has confidence about the changes in user behavior that occur when users migrate from "large buckets" to "unlimited" calling plans.

Sprint might have uncovered in its data mining that the existing calling patterns of its current customers show a marked upsurge in mobile-to-mobile terminations, both on network and off network.

Sprint might also have discovered that, on balance, the cost of offering unlimited termination on rival networks can be captured within the new fee structure it has created.

In other words, unlimited mobile termination at current plan costs is at least revenue neutral when customers move to $70 a month access plans featuring 450 minutes terminated on domestic wired networks, or $90 a month when users terminate no more than 900 voice minutes on domestic wired networks.

But Sprint might also have concluded that getting more customers on data plans results in the new "Any Mobile, Any Time" plans being revenue incremental, not simply revenue neutral, after accounting for cost of service.

It's getting harder to tell what any given calling pattern actually represents for any user, at least in "cents per minute" terms. And that ultimately might be a very good thing for service providers and users. For users, the actual "cost" of calling will become less important an issue in choosing service plans.

For service providers, the actual profit margin on voice services might remain interesting, even as formal "price per minute" metrics fall.

Monday, April 6, 2009

Wireless "Net Neutrality" Will Lead to Higher Prices

There's a sort of inescapable logic to what wireless network access providers will do if or when mobile VoIP applications are freely enabled, as some policy proponents advocate. Since the entire business model rests on voice revenues, the loss of those revenues will be compensated for in the form of higher mobile broadband access prices.

Existing best-effort plans might be the baseline. But new plans optimized for voice, or conferencing, or other applications, might well emerge. Of course, optimizing might violate some notions of "net neutrality," unless optimizing is available to any provider of voice over a mobile IP network, in which case it might not be a neutrality violation.

But those optimizing services will be an add-on.

You might argue providers can create replacement revenues some other way: selling content or advertising, for example. But the numbers don't work. Build your own spreadsheet and you'll figure that out. There is no conceivable new revenue stream that replaces voice revenues "one for one."

After some years of watching what happens in a robust, mandatory wholesale environment, even European regulators are starting to see what happens. Service providers start spending their money outside the home market, where financial returns are higher.

Investors aren't dumb. Businesses with low growth and margin prospects get less investment than competing alternatives promising a higher return. The current capital stringency is bad enough. Wait until you see a capital strike.

Wednesday, October 10, 2007

"People Have No Idea What We Might Be Up to"


Google's 80/20 program, where associates are encouraged to spend 20 percent of their time thinking up new things for Google to do, means Google "could do almost anything," says one source. Google just bought Jaiku, a mobile social networking and messaging service, and seems still to be hunting for experienced telecom executives and capacity, for example.

Google is going to be a player in mobile, it seems clear enough. The only issue is how it will play, and in how many ways.

Tuesday, September 25, 2007

iPhone Wins with Software Defined Radio

Software defined radios--software that emulates all the functions of one or more radio transceivers--have been talked about for at least a decade, and at least one company--Vanu--has had its SDR approved for U.S. use by the Federal Communications Commission. The attractions are many: mobile communications becomes an application any device can be given; dedicated firmware and hardware are unnecessary; multiple radios can be made available to any single device; smaller radios are possible.

An SDR could mean a global mobile device, able to work in Japan, on GSM or CDMA networks, with Wi-Fi or other wireless networks. Some users would love it. Mobile carriers have to be ambivalent. Sure, you'd like to sell a true "global phone." But then you also lose control of the end user and the device. Any truly global phone necessarily works with any mobile provider's network, as well as with Wi-Fi and potentially other wireless platforms--such as WiMAX--as well.

On the other hand, looking at this from a consumer device manufacturer's point of view, SDR is a wonderful thing. If you sell mass market communicating devices all over the world, and have to deal with disparate radio infrastructures and protocols, you want SDR because it streamlines the entire manufacturing and logistics process.

You build one device, supporting multiple radio types; not multiple devices designed to work on one sort of radio platform. If you are Apple, in other words, SDR is a really nice thing. It's a nice thing if you are Nokia as well. Nokia just has more entangling relationships with customers that undoubtedly will press Nokia not to make SDR available.

Also, no particular business model inevitably is bound up with the use of SDR, though obviously the technology lends itself to more open and flexible end user models. One can envision open, unlocked business rules on one hand and walled garden rules on the other where "roaming" is possible anywhere in the world so long as the user has agreed to pay for that privilege.

The point is that by fits and starts, we see more openness at both the device and application layers of any communications-enabled business, corresponding to the openness IP itself has brought to transmission.

Monday, September 17, 2007

iPhone for O2: Zero Margin for Carrier


Mobile operator O2 (Telefonica) reportedly has won the right to sell the Apple iPhone in the U.K. market. It may ultimately regret the victory, as the Guardian reports O2 is giving Apple 40 percent of service revenues.

The other U.K. mobile operators reportedly backed away from the deal as the O2 business arrangement essentially is a guaranteed money loser. O2 of course is gambling it can leverage the deal to take share from its U.K. competitors.

As part of the deal, Carphone Warehouse will act as an authorized retailer for O2 as well. Apple apparently retains control of device pricing.

The deal is part of a number of potential destabilizing developments in the mobile business. It isn't simply who is in the networks business. It also is where value and hence profit are to be made in the mobile ecosystem. Apple thinks it is the phone. Google might think it is the ability to create targeted advertising. Other players, such as satellite TV providers, might see value in the ability to create a triple play including broadband access and voice.

In the U.S. market there is the possibility of bids for 700 MHz spectrum, enough to construct a national broadband network. Google has said it likely will bid, and Apple itself is said to be considering its own bid. Other contestants in need of a terrestrial broadband capability, such as DirecTV and EchoStar, have to be weighing their own options as well.

Buying a transmission network is a costly way to create an application delivery network. But there are precedents. Broadcast TV, radio, cable TV, cellular, paging, satellite TV and telephone networks all were built to provide a single "killer" application. Apple could be looking at 700 MHz as a way of jumpstarting mobile video. Google is more interested in mobile advertising. The satellite providers would gain a terrestrial broadband and voice capability to create a triple play under their own control.

One might question whether any new firm focused on new applications would want the headaches of running a network. One might question whether the advantage of owning a network is really worth what it would cost to acquire spectrum and construct a network. But it is a measure of destabilization that such developments are being pondered.

Separately, T-Mobile is expected to win exclusive iPhone rights in Germany, while Orange wins that right in France. At this point, Apple is betting the device trumps the network. The U.K. iPhone will use the slower 2.5G EDGE network, not the faster 3G network.

Tuesday, September 4, 2007

GooglePhone: Big Issues


Speculation about a new Google Phone continues to mount. Add the Boston Globe to the Wall Street Journal as entities that have "uncovered" the prototype. Google executive Rich Miner, a co-founder of mobile software company Android (which was bought by Google two years ago), has not confirmed that he is working on a phone, but he is reported to have shown the alleged prototype to "a handful of Boston entrepreneurs and venture capitalists."

Dan Roth, president of VoiceSignal, and Mike Phillips, founder of speech-recognition firm Vlingo Inc., both are suggested as also working with Google on the device. Google's phone supposedly allows horizontal scrolling and has three-dimensional, animated buttons on the screen as well as a small QWERTY keyboard.

This will be interesting. Most tier one service providers will say Google is the competitor they worry about most, and wireless is the service now keeping the global industry moving forward.

We can safely dismiss the notion that Google will build handsets. We cannot discount Google becoming a service provider, though, as it just might bid for 700 MHz spectrum. In the meantime, it continues to work to seed existing networks with its software, so one cannot discount an "iPhone" deal with at least one wireless carrier.

But that's where matters get sticky. T-Mobile has the most to gain, but the worst network for browsing. Verizon has the network, but probably not the willingness. at&t is busy with iPhone and might not want the distraction. Sprint has the network and a long history of working with partners. The network access platform (CDMA) probably isn't the most important issue, but is a potential negative.

Then there's the issue of how coherent the value proposition is. BlackBerry is mobile email. iPhone is a fashion statement right now. It isn't clear what it will become as adoption broadens, though if it winds up being mobile Internet then Google has to take it on. Mobile search doesn't quite have the ring of something lots of end users will understand. The "Internet in your pocket" probably does, but iPhone is already there.

More important initially is the choice of network partner. "The Internet in your pocket when near a Wi-Fi access point" doesn't cut it, at least for me. That would have as little appeal as a mobile phone that only worked within range of a Wi-Fi access point. A small number of people might put up with the convenience, but it is hard to see lots of people doing so.

T-Mobile has lots of reasons for considering such a partnership. But that's the worst possible network for mobile browsing. As much as people complain about the bandwidth used to support the iPhone, they should have to use the T-Mobile data network before complaining. Negative user experience is about the only way to describe it.

Of course, Google could be angling for applications requiring low bandwidth, such as location-based and contextual information, not mobile search, or transaction capabilities based on such location-based capabilities. That wouldn't take much bandwidth. But that also wouldn't be the "Internet in your pocket."

Assuming the bandwidth issue can be finessed, the task of creating a new category remains. People understand the "email in your pocket" and "music in your pocket" positions. Mobile browsing, mobile payments, mobile advertising and location-aware services do not provide similar positions in the end user mind.

I suppose Google could attack the iPhone segment (similar features, much less price) but even there the message does not immediately seem clear.

Apple also had an advantage: it is well known for user interface innovation industrial design and ease of use. Apple also has a fanatical user base and was able to build off the wild success of the iPod. Google will not have those advantages.

And this is said by someone whose day begins and ends with Google, and for whom search is something that happens throughout the day. But the way I use Google (research) would not translate to the mobile environment. Mobile search would be a different use case and some new behaviors Google would have to stimulate and help create. Of course, BlackBerry and iPhone had to do so as well. I just can't tell you off hand what a Google Phone does for me, the way I can describe the BlackBerry and iPhone.

Separately, Google has filed a patent application covering an electronic on-line payment system it refers to as GPay. Using GPay, a server receives a text message from a payer containing a payment request for a specific amount. The server parses the text message to find out what value the payer account should be debited for, and
credits the payee account.

Of course, one way or the other, Google is going to be a presence in wireless. If Google wants a share of the mobile advertising market, and it clearly does, it needs control over more elements of the value chain.

Also, with wireless increasingly ubiquitous, and fourth generation wireless coming, Google has to get into position to extend beyond the PC experience. So Google seems to be working on an operating system and at least one handset.

It had made wireless enabling technology acquisitions, including Reqwireless (mobile apps: browser, email), Skia (graphics software), Android (OS)and Dodgeball (mobile social networking).

Google is developing mobile versions of existing apps such as its Calendar and AdSense apps. it is developing text message services such as real-time flight information, local search and payments.

Google might bid in the upcoming 700 MHz auction. it also is sealing deals with hardware makers to pre-install Google services on Samsung, Apple iPhone and LG devices and working with China Mobile and at&t--through the iPhone--to optimize the services for handset use.

Google also is supporting the Windows Mobile operating system. Google also is talking about a mobile virtual network in the U.K. market. And of course it has been experimenting with Wi-Fi networks, and is working with Sprint on that firm's WiMAX handsets.

Thursday, August 23, 2007

100 Percent Mobile Penetration by 2013


SNL Kagan now estimates that 84 percent of the U.S. population, including consumer, business and double users, will have mobile phones by the end of 2007. By 2013, penetration will be over 100 percent. It might not even take that long. U.K. mobile penetration is something like 116 percent already, according to Ofcom, and has broken 100 percent in a number of western European countries.

Tuesday, July 24, 2007

Amp'd Customers Were a Collections Nightmare


Amp'd customers were heavy data consumers. Unfortunately, they also tended not to pay their bills. Amp'd apparently experienced an unprecedented growth of subscribers between November 2006, and February 2007 after running ads on MTV about the wireless phone company's lineup of mobile music and video content.

"Approximately 90 percent of the debtor's customers were on 18-month service contracts," according to Amp'd. By May this year, the number of nonpaying customers reached 80,000. That's nearly half of Amp'd's current customer base of 175,000 subscribers.

The filing in U.S. Bankruptcy Court in Delaware, which says the company owes more than $100 million to creditors, including Verizon Wireless. Since Verizon is one of the largest creditors, it might make sense for Verizon to salvage something out of the mess, and acquire the 50 percent of customers who actually do pay their bills, and exhibit behavior Verizon wants to encourage.

Sunday, November 19, 2006

Mobile Skype

It sometimes is hard to distinguish between a disruption that upsets the existing order of things from those that extend the current business model. VoIP seems to contain elements of each. But one thing seems clear enough. Disruption that creates new markets or market segments disproportionately comes from those with less to lose.

Mobile operator "3", owned by Hutchinson Whampoa, provides an example. It is offering Skype over its 3G networks, using a flat fee data plan. Service is scheduled to start in the U.K. market in early December. Mobile operator 3 has signed a range of deals with internet companies including Google, Skype and eBay in the hope of generating revenues from customers subscribing to use advanced mobile internet services.

3 said it will price the bundle of services in a flat fee structure like fixed line broadband, and they will be available on a new range of handsets called the X-Series to be introduced in the UK on December 1. The new handsets also will support Sling video placeshifting. So does the move extend the current mobile model or disrupt it? Some elements of both, in all likelihood. It makes the mobile platform more valuable for all-new applications. But it also undermines the traditional pricing mechanism for standard voice.

"Tokens" are the New "FLOPS," "MIPS" or "Gbps"

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