T-Mobile UK Offers "Free Texting for Life"

It appears a "free text messages for life" promotion lead to the highest-ever single-month gain in new subscribers for T-Mobile UK in September 2009.

T-Mobile UK gained an estimated 100,000 net new subscribers in September, compared to a net loss of 200,000 subscribers in the first six months of the year.

The promotion runs month to month, allowing any users that tops up a prepaid subscriber information module to £10, in any month, unlimited texting the next month. So the promotion requires subscribers to top up their prepaid accounts to that level, every month, to keep the "unmlimited texting" feature.

Growth in T-Mobile UK's prepaid business accounted for most of the increase in the month, but the company says there was also a "healthy increase" in the number of contract customers in the period.

The thing about mobility is that it is a multi-product business, allowing service providers a number of options for "merchandising" features to enhance new customer acquisition, retention, revenue or profit margin. In this case, T-Mobile UK has opted for merchandising of text messaging to boost customer acquisition and retention.

Speakeasy Joins Google Voice in Refusing High-Cost Terminations

It is unclear whether a common carrier or Internet service provider lawfully can refuse to terminate calls to some area codes, though the issue now will have to be resolved. Google, for example, refuses to terminate calls to some high-cost areas in Iowa and elsewhere commonly used by free conferencing services.

Tier-one service providers also have tried to refuse terminations to these area codes and have been forbidden to do so by the Federal Communications Commission.

Speakeasy now apparently also does not want to terminate calls to some high-cost area codes, at least as part of its standard service.

"Speakeasy will disallow voice traffic to a few selected area and prefix codes (“NPA-NXX”) in North America," says Michael Czerwinski, Speakeasy VP. "In addition, we are clarifying our non-standard use clause and will be extending additional options to these specific customers affected."

Operators of services such as adult lines and “free conferencing” are using these local area codes and are causing additional fees, he notes. "Instead of passing on these fees to you, we have chosen to maintain the most competitive rates possible by implementing this policy," he says.

Regulatory arbitrage is a fact of life in the communications business. Sometimes it is a mnor irritant; sometimes it rises to a more-painful level. One suspects high termination rates in a few jurisdictions now are rising to a level when some action is to be expected.

Is Net Neutrality Possible?

It has been quite some time since the typical service provider executive has had confidence about the stability of rules governing the communications business. To greater or lesser degrees, there has been some element of regulatory instability and uncertainty since the mid-1990s, to go along with heightened market uncertainty.

Investors and executives do not like uncertainty. Yet greater uncertainty is likely what the industry now faces as the Federal Communications Commission ponders new rules about network neutrality, wireless competition and national broadband policy.

The latest reason for heightened uncertainty is the fundamental nature of questions inevitably raised by some of the regulatory discussions and rule makings, and the time it will take to sort out the application of the rules.

How does regulation separate "common carrier" obligations carriers may have from content rights they may have as providers of their own information and content services?

What does "common carriage" mean in an Internet era, for Internet-delivered services that might not work reliably and consistently in a strict "best effort" delivery mode?

What scope exists for "private IP" services provided to consumer users, much as business users have the right to buy "private IP" services that allow prioritization of packets?

How can regulation provide fair and equitable treatment of like services when the fundamental regulatory frameworks apply to different providers?

How does the framework handle instances where a "service" or "application" provider also acts as a "carrier"? When it is impossible to prevent a single legal entity from acting simultaneously as an information provider and a service provider and an application provider and a carrier, how does regulation handle the contradictions between treatment of roles?

Above all, will the sum total of new rules create more freedom, or less? And when freedom for one actor conflicts with freedom for another, how will balance be maintained?

The answers ultimately will matter for reasons other than perhaps-abstract notions about extending or squashing freedom; protecting individuals and companies from the power of government. At a time when everybody agrees that continued robust investment in facilities is in the public and national interest, how will the new rules affect investment and innovation?

The issue is not so much whether the outcome is greater freedom for application providers--that certainly will happen no matter what the outcome--but whether facilities providers also have freedom to change their business models to take advantage of new freedoms.

Virtually all regulators assume that the proof of deregulatory success is that incumbents lose market share and revenue. Some financial pain, inflicted on incumbents,  therefore is the whole point of deregulation.

But there is some point beyond which the infliction of pain must stop, or wider disruption of core facilities is impaired.

A rational observer might argue that "level playing fields" have yet to be fully created.. The issue is when such a point will have been reached, and how we will know it.

Will Net Neutrality Affect Teleworkers?

New "net neutrality" rules proposed by the Federal Communications Commission could affect teleworkers across the country, says Irwin Lazar, Nemertes Research VP.

If new rules strictly require Internet access providers to treat all traffic equally, which has a nice ring to it, it follows that it would also be unlawful to prioritize traffic, such as giving top priority to voice traffic or conferencing traffic at remote work sites.

That might have implications for the sorts of broadband access services organizations are able to buy for remote workers.

Enterprises and organizations might very well require the ability to prioritize voice and conferencing sessions, while assigning lower priority to Web surfing or entertainment video, for example.

That might mean it is not possible to buy standard broadband access services, and might require sourcing of private business class connections where such prioritization is possible. The ability to create virtual tunnels and virtual private networks might be required, and therefore might preclude buying of consumer broadband connections.

That could prove troublesome for teleworker support, as Nemertes Research now estimates that 86 percent of companies are planning to increase the number of teleworkers.

Proposed Net Neutrality rules may hinder their ability to utilize latency sensitive applications without purchasing a business-class service with performance guarantees. Uses of client-based optimization as well as desktop virtualization are likely to increase.

"Do not continue to assume that your employees will always have cheap access to high-speed residential services," says Lazar. "Develop contingency plans that include purchasing of business class services, use of optimization, and, or desktop virtualization to guarantee application performance."

UC Glass Half Full?

Unified communications can improve productivity, a survey by Orange Business suggests. The poll shows that 41 percent of the CIOs of large multinationals are considering unified communications. The other way of looking at matters is that 59 percent are not looking at it.

CIOs say UC features such as integrating mobile devices into the enterprises, implementing real-time identification through presence, instant messaging, and adding audio conferencing and desktop videoconferencing to work-flows enhance business efficiency.

Orange's report polled more than 600 CIOs from multinational corporations across various vertical industries. It revealed that most companies had to track and support seven different communications tools and applications.

This multitude of communications tools not only hampered an MNC's ability to collaborate internally, but it also delayed businesses processes and decision making.

While 95 of the CIOs polled said that new communications technologies have increased productivity, the amount of communications tools used within their respective companies slowed down internal communications.

Some 45 percent of CIOs indicated that multiple communication channels cause severe delays in colleague response time which can negatively impact business processes and productivity.

Customer service was seen as the primary UC beneficiary by 33 percent of respondents, while 28 percent thought sales benefitted most.

What is not clear is how much those respondents are willing to pay to acquire various capabilities, or how much enterprise workers will agree with CIO assessments.

Despite Hype, Enterprise Workers Cling to Voice, Email

It appears that many enterprise 2.0 collaboration tools are struggling to be adopted, at least n Europe, says Stewart Baines, on the Orange Business blog. He notes recent research by Forrester Research indicating social networks, blogs, wikis and virtual worlds are being shunned by workers as they continue to communicate by phone or email.

The survey of 3,000 European knowledge workers found that, while 99 percent of workers collaborate with others and 81 percent work with two or more people in different time zones or regions, current tools do not meet their needs.

Security and control of information once it has been distributed seem to be clear barriers. But it might be more than that. Respondents seem to think collaboration tools simply are not engaging enough. About 44 percent of respondents say they still are looking for more engaging ways to collaborate.

About half of information security professional recently polled by Webroot say they intend to shelve plans for collaboration as a result of security concerns.

The Webroot survey found just 25 percent of security professionals are prepared to move ahead in spite of security concerns and only 15 percent have already resolved their security issues. The remaining 10 percent have no plans for collaborative working.

At least to some extent, Web-based collaboration tools appear still to be at some stage of supplier hype rather than end user demand, complicated by unresolved security and governance issues, at least in European enterprises.

What's the Value of a "Click"?

The number of people who click on display ads in a month has fallen from 32 percent of Internet users in July 2007 to only 16 percent in March 2009, with an even smaller core of people (representing 8 percent of the Internet user base) accounting for the vast majority (85 percent) of all clicks, say comScore.

You can draw your own conclusions about what that means. Some might argue that display advertising "doesn't work." Others would argue simply that clicks are not the right way to measure impact.

“The act of clicking on a display ad is experiencing rapid attrition in the current digital marketplace,” says Linda Anderson, comScore VP. “Today, marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don’t click on an ad.

"That’s precisely the wrong thing to do, because other comScore research has shown that non-clicked ads can also have a significant impact," says Anderson. "As a result, savvy marketers are moving to an evaluation of the impact that all ad impressions – whether clicked or not – have on consumer behavior, mirroring the manner in which traditional advertising has been measured for decades using reach and frequency metrics.”

The results underscore the notion that, for most display ad campaigns, the click-through is not the most appropriate metric for evaluating campaign performance, comScore says.

Rather, advertisers should consider evaluating campaigns based on their view-through impact. The company has conducted more than 200 client studies demonstrating that online display ads generate significant lift in brand site visitation, trademark search, and both online and offline sales among those Internet users who were exposed to the online ad campaigns – whether they clicked on the ad or not, says comScore.

“A click means nothing, earns no revenue and creates no brand equity," says Anderson.

“You want people to visit your website, seek more information, purchase a product, become a lead, keep your brand top of mind, learn something new, feel differently – the list goes on. Regardless of whether the consumer clicked on an ad or not, the key is to determine how that ad unit influenced them to think, feel or do something they wouldn’t have done otherwise,” says Starcom USA SVP/Director, Research & Analytics John Lowell.

Social Media is Made for Mobile

Social media is about conversations. Mobile phones are about conversations. Social networking is about conversations. So how much insight is required to figure out that social media and social networking are about mobiles?

Today, every major social network offers its users a range of mobile services, from mobile web access to downloadable mobile applications. Although consumers with high-end devices may be the primary users of these mobile services, some social networks also offer a number of SMS-driven features that allow consumers to stay engaged by text, even on low-end mobile phones.

According to Nielsen, more than three million Twitter users in the United States regularly access the service using their mobiles. Additionally, many consumers are frequently using Twitter though text messaging and a range of downloadable mobile applications for iPhone, BlackBerry and other mobile devices. In fact, those third party applications might represent as much as 80 percent of mobile Twitter use, suggesting there could be as many as 15 million U.S. mobile Twitter users.

According to Nielsen, about 15 percent of Facebook users (11 million) in the U.S. regularly access the social network's mobile web version, plus three million users who use text messaging for Facebook access. There also are third party apps for mobile Facebook use as well.

More than 4.6 million users use the mobile version of YouTube as well, Nielsen says.

Net Neutrality Not Good for Real-Time Services?

One of the unknowns at the moment is how any proposed Federal Communications Commission network neutrality rules might affect a service provider's ability to offer quality-assured services.

That's possibly important for any users or providers of real-time services (voice and video), since bandwidth alone is not a guarantee of quality experience.

Real-time services are highly sensitive to latency and delay. The issue then is whether consumers will have the option of buying services optimized for real-time services.

Think of this as an end-user opportunity to buy bandwidth services that are akin to the Akamai content delivery service currently available to businesses.

Mobile Web Use Explodes

As is always the case, the highest growth rates for any product or service come when growth starts at a low base. And that seems to be the case for mobile Web usage, which over the last year has grown faster among users 65 years old, or older.

Over the last year, users 65 or older adopted mobile Web behaviors at a 67 percent rate.

The other trend of note is rapid growth at the other end of the demographic scale. Users between 13 and 17 increased their mobile Web usage by 45 percent. That means teens are buying smart phones, or having smart phones bought for them.

Casual Use Biggest PC-Based Mobile Broacband Segment?

Mobile broadband services used by PC owners likely will follow the pattern seen recently in the U.S. mobile phone business, where prepaid payment plans have grown at the expense of postpaid plans.

By 2011, only 40 percent of PC mobile broadband users will be on long-term monthly contracts, says  Dean Bubley, Disruptive Analysis principal. Most will use prepaid, casual use or “free” access, he predicts.

In fact, the strongest growth probably will come in the casual use segment.

High Social Media Use Also Means High Email Use, Nielsen Finds

At least in principle, as consumers and workers get access to unified communiations tools, there is a chance behavior will change. When a user can get a message in one media format and reply in another format, people might start using the tools they like best, and thereby decreasing use of other message formats.

Researchers at the Nielsen company, for example, guessed that as people began using social media, they would use less email, for example. To test that thesis, Nielsen broke the online population into four groups.

The first three are terciles of social media consumption in minutes, says Jon Gibs, VP, Media Analytics.  The fourth is a group that doesn’t use social media at all.

Nielsen then looked at each segment’s time of web based email consumption over the course of a year.
Finally, Nielsen subtracted the email consumption of those that do not use social media from those that do, basically to show a lift over possible external forces.

As it turns out, Nielsen found the opposite of what it guessed it would find.

"It actually appears that social media use makes people consume email more, not less, as we had originally assumed, particularly for the highest social media users," says Gibs.

In part, that might be because social media sites like Facebook can be set to send messages to user inboxes every time someone comments on a post, depending on user preferences.

But it also is likely that high users of social media are, well, "social." They might use any number of media to keep in touch with friends and associates.

$350 Billion to Build 100 Mbps Symmetrical Broadband Throughout U.S.

Based on an average cost per dwelling of about $2,700, including capital and operating expense (construction and so forth), the Federal Communications Commission estimates it will take about $350 billion to bring 100 Mbps service to about 111 million to 116 million U.S. homes.

Internet Users are Unique, Treat Them That Way

As this chart suggests, there are distinct Internet end user segments, some of which only require moderate bandwidth, others which require more bandwidth, better latency performance and more upstream bandwidth, if not symmetrical bandwidth.

The issue for any facilities-based service provider is that the whole network has to be built to accommodate the most advanced users, even if much, or most, of the demand is from less-demanding users.

Still, given that such investment must be made, there is increasing room to personalize and tailor broadband access and applications to individual users who actually behave in unique ways.

Though the concern expressed by many supporters of strong forms of network neutrality rightly is focused on protecting legal applications from anti-competitive behavior, there clearly are other values that conflict with the  proposed solution for discrimination, which is that no bits, from any providers, can be prioritized.

In fact, prioritizing bits represents a primary tool for personalizing end user services and applications so that those favored applications are optimized for each user. Surely there are ways to ensure non-discrimination without precluding the creation of personalized services that benefit from end-user specified preferences.

Is Mobile Broadband a Commodity?

Most industry observers tend to think and behave as though "voice" were a commodity, and there is some truth to the notion, at least on the wholesale, carrier-to-carrier or carrier-to-enterprise level. I would dispute the notion that voice, in all its permutations, actually fits the definition of a commodity, but for the moment let's look at mobile broadband.

Is mobile broadband a commodity? Can it replace a fixed broadband connection. As this chart suggests, the answer largely is "no." A mobile service easily can displace a single consumer voice line or simple Internet applications such as email. But it isn't so clear email access is what people generally mean when thinking about mobile broadband.

At the other extreme, high-quality linear entertainment video is virtually impossible to replicate in the mobile domain, so IPTV, for example, has no direction equivalent in the wireless domain. Other applications are somewhere between "mostly" substitutable and "not" substitutable.

The point is that a product probably isn't a full "commodity" if full substitution is not possible, or is possible, but without fully interchangeable value. So far, mobile broadband does not seem to be a "commodity" fully capable of replacing a fixed broadband line.

There are many reasons, including vastly different speeds, usage caps and pricing. Then there is the demographic element. It is easier to consider substitution when a single-user household is concerned, hardest when multi-member families are concerned.

The value of a fixed broadband connection grows with the degree of bandwidth sharing and total number of devices to be supported. One fixed broadband connection might make more sense than five mobile broadband connections, for example.

The other angle is that linear multi-channel entertainment video is just a discrete application delivered over a fixed broadband connection, and there is as of yet no mobile substitute. So despite outward appearances, mobile and fixed broadband are not fully-exchangeable substitutes, and hence not true commodities.