T-Mobile USA Sidekick Data Nearly Fully Recovered

T-Mobile USA and Microsoft now say they have “recovered most, if not all, customer data for those  Sidekick customers whose data was affected by the recent outage,” says Roz Ho, Microsoft corporate VP.

"We plan to begin restoring users’ personal data as soon as possible, starting with personal contacts, after we have validated the data and our restoration plan," Ho says. "We will then continue to work around the clock to restore data to all affected users, including calendar, notes, tasks, photographs and high scores, as quickly as possible."

"We now believe that data loss affected a minority of Sidekick users," Ho added. Despite that good news, two class action lawsuits have been filed against T-Mobile USA, alleging that the company misled consumers into believing that their data was more secure than was the case.

Wal-Mart Straight Talk a Tipping Point?

In March of 2009, the Opinion Research Center estimated that 8.7b million Americans already had discontinued their mobile service because of the recession, and suggested that as many as 60 million mobile users would seek ways to reduce spending.

One way many consumers seem to have done so is to substitute prepaid service for contract plans. That would account for robust subscriber growth for virtually all providers of prepaid service since then.

But Wal-Mart's new “Straight Talk” prepaid service, offered at the $30 and $45 levels, could end up being the “tipping point for millions of consumers who are already considering moving away from expensive contract-based cell phone service,” says Allen Hepner, New Millennium Research executive director.

Hepner believes that the $30 plan (with 1,000 minutes, 1,000 texts per month, mobile Web access and no-extra cost 411 calls, with no contract and no penalties) and the $45 plan (unlimited calling, texting, mobile Web and 411) that Wal-Mart now offers under the “Straight Talk” brand are going to get serious attention.

With average monthly contract plans reported to be about $81, the more than 140 million U.S. contract-based wireless customers who use less than 550 minutes a month may now have even more reason to consider switching to a less expensive cell phone option, particularly in a changing environment in which plans for 1,000 minutes are available through Wal-Mart for $30 per month, Hepner argues.

In March 2009, ORC estimated that there were 29 million prepaid accounts in service, representing about 16 percent of the total base of mobile users.

“We see that 8,740,000 Americans, that is 19 percent of consumers without a cell phone, report that they already have ‘discontinued cell phone service in the last six months because of actual job loss, fear of job loss, the recession, or any other related financial concerns," said Graham Hueber, Opinion Research Center senior researcher.

At the same time, ORC suggested that 39 percent of postpaid mobile customers--60.3 million consumers--were likely to cut back on their cell phones to save money, the Opinion Research Corporation estimated.

Wal-Mart Gets into the Mobile Phone Business

Competition in the voice business is about to get more heated, as Wal-Mart now says it will be a  retailer of mobile phone service, partnering with American Movil to sell low-cost service pre-paid service under the "Straight Talk" brand. The company is offering unlimited voice and text minutes for $45 a month, or 1,000 minutes and 1,000 text messages for $30 a month.

AT&T just introduced a new $60 a month pre-paid service under its "GoPhone" brand with unlimited U.S. voice calls and unlimited text messaging to the U.S., Mexico, Canada and more than 100 other countries.

The plan includes unlimited IM picture and video messages. The service does not require a contract, and offers a range of full keyboard devices.

And AT&T recently reevaluated its position on use of Skype from its Apple iPhones, using the mobile network, not just Wi-Fi.

All the moves show the intensified competition in the prepaid wireless segment, one of the few areas of untapped growth for mobile providers.

Still, the new activity around voice pricing only accentuates the on-going trend, which is that voice, though the historic driver of revenue for mobile and fixed providers, will not be the driver in the future.

As JP Morgan analyst Mike McCormack notes, voice accounts for $50-$60 of the $95 in monthly revenue generated by the typical iPhone user. If the average user were to drop AT&T’s unlimited voice plan ($99.99 a month) in favor of its cheapest ($39.99 a month), the carrier could lose upward of 20 percent to 33 percent of its voice revenue, at least from iPhone users.

In the past, industry executives accurately could say they were in the telephone or voice business. That won't work in the future, when they primarily will be in the communications business, with significant operations in the content and application businesses as well.

Peer-to-peer Wi-Fi: Bluetooth Killer?

A new peer-to-peer Wi-Fi specification sponsored by the Wi-Fi Alliance will enable Wi-Fi devices to connect to one another directly without joining a traditional home, office, or hotspot network. 

The Wi-Fi Alliance expects to begin certification for this new specification in mid-2010 and products which achieve the certification will be designated "Wi-Fi CERTIFIED Wi-Fi Direct."

The specification can be implemented in any Wi-Fi device, from mobile phones, cameras, printers, and notebook computers, to human interface devices such as keyboards and headphones. 

Significantly, devices that have been certified to the new specification will also be able to create connections with hundreds of millions of Wi-Fi CERTIFIED legacy devices already in use. 

Devices will be able to make a one-to-one connection, or a group of several devices can connect simultaneously.

The specification targets both consumer electronics and enterprise applications, provides management features for enterprise environments, and includes WPA2 security. Devices that support the specification will be able to discover one another and advertise available services.  

Wi-Fi CERTIFIED Wi-Fi Direct devices will support typical Wi-Fi ranges and the same data rates as can be achieved with an infrastructure connection, so devices can connect from across a home or office and conduct bandwidth-hungry tasks with ease.   

Though some might fear the specification will damage sales of Wi-Fi access points, the new P2P networking technique seems more a threat to near-field standards such as Bluetooth. For some applications, such as file sharing, the extended Wi-Fi range will make it a better option than Bluetooth for public near-field communications, for example. 

Such proximity marketing techniques sometimes are used to allow users to interact with electronic billboards, for example. P2P Wi-Fi ought to be easier to use, and also will have greater range. 

Consumers Don't "Want" UC, But they Use It

Unified Communications is one of those buzzword terms people in the communications use, but doesn't necessarily resonate with consumer users. That doesn't mean consumers do not like and use UC, they just don't think about it as "UC."

More often than not, "UC" masquerades as "cool apps" that allow users to manage their communications, voice mail, video services email and other messages. These days, that value is available in the form of mobile apps downloadable from a mobile app store.

That's why users are spending more time checking out apps that actually are forms of UC, even when those apps aren't pitched as being "UC" apps.

Comcast’s mobile application for the iPhone and iPod Touch is an example. The Comcast app  provides one-stop access to key features of Comcast Digital Voice, Digital Cable and high-speed Internet services.

It allows to read and compose emails from Comcast.net, listen to home voice mail from one mailbox, manage landline voicemail through a visual interface, forward home calls to the iPhone, check TV listings, watch on-demand movie trailers, synch all universal address book contacts to the iPhone and add pictures to their favorite contacts.

YouMail, CallWave, PhoneFusion and Google Voice provide other examples. Those apps  allow people to instantly read transcripts of voicemails, screen calls and manage greetings by caller, for example.

Apple’s "MobileMe" service that pushes new email, contacts, web bookmarks, and calendar events over the air to iPhone, Mac, and PC so that data is synchronized.

All of those are examples of how UC looks in the consumer market. People do not seem to care what we call it. They like the higher functionality and use it. But don't ask them whether they "want unified communications." The question won't make sense.

IP Telephony Makes Huge Gains in Business

IP telephony seems to have made huge inroads into global business organizations, especially in China, a new study by Frost & Sullivan suggests. In fact, IP telephony is more the norm than the exception, illustrating the fact that IP telephony is the new normal.

"About 80 percent of respondents who have not yet deployed IP telephony say they will," says Jim Tyrrell, Verizon Business VP. Verizon Business and Cisco Systems sponsored the study.

Chinese organizations are especially active, with 89 percent using some form of IP telephony as their primary phone service.

And though early on many organizations were concerned about adoption, that no longer seems to be a key concern. About 92 percent of IT managers surveyed indicated VoIP quality is at least as good, if not better than traditional wireline phone systems.

The Frost & Sullivan survey included 3,662 information technology or line-of-business decision makers in organizations in 10 countries in Asia-Pacific, Europe and the United States, in enterprise and small or medium-sized organizations, across a range of verticals including financial services, government, health care, high technology, professional services, manufacturing and retail industries.

More than half of respondents say collaboration tools allow for greater balance between work and personal life and help them gain more control over their busy lives.

About 58 percent say there are times they don’t want to be reached while 52 percent of respondents say the new communications devices allow workers to gain more control in their lives. Also almost half (47 percent) said they could not do without the ability to conference remotely.

Confidence in virtual meeting technologies is growing. Some 61 percent see collaboration technologies as reducing the need to travel for business. More than half think using conferencing tools – such as an audio conferencing, web conferencing or video conferencing – is a good alternative to visiting business contacts face-to-face.

Regionally, European respondents like to work in the office (as opposed to working from home) and prefer in-person meetings and business travel over using conference calls. However, respondents in Asia Pac and in the United States see conferencing as a good alternative to face-to-face meetings.

Telecommuting is gaining traction. Almost half (47 percent) of respondents report having a formal telecommuting policy in place. However, less than a third (27 percent) telecommute at least once a week, and 22 percent telecommute on a daily basis. At the same time, 61 percent of respondents say they like to work from anywhere.

The results show India is the most telecommuting friendly country, with 59 percent of its organizations having a formal telecommuting policy, and 48 percent of its workers telecommuting daily followed by Hong Kong, with 54 percent of its businesses having a formal policy, and 26 percent of its workers using it on a daily basis.

The United States and China are tied for third with 47 percent of U.S. organizations and 64 percent of Chinese firms having formal telecommuting policy and 25 percent of U.S. workers and 21 percent of Chinese workers using it daily.

T-Mobile USA Has No Urge to Merge

Deutsche Telekom AG Chief Financial Officer Timotheus Hoettges says there’s no need for further consolidation of the U.S. mobile market, apparently squashing the notion that T-Mobile USA might try to buy Sprint Nextel.

“There are four national players in the U.S. market for 300 million households, while in Europe, where we have 350 million households, there are 50-70 operators,” Hoettges says, according to Bloomberg. “We believe in our chances of being the challenger.”

Getting its third generation network strategy into higher gear remaining a key challenge.

“There is no question that we lost customers because many of our customers couldn’t get 3G.,” Hoettges says. “We now have to make sure that we can capitalize on the network in the top-10 cities where we have invested.”

Deutsche Telekom gets 24 percent of its revenue from T- Mobile USA, which saw its revenue drop 2.3 percent in the most-recent quarter.

On top of that is what T-Mobile USA can do about fourth-generation network capacity, which will require additional spectrum or wholesale sourcing.

So far, T-Mobile USA hasn't ruled out wholesale sourcing or additional spectrum acquisition. Clearwire's 4G network is rumored to be a contender, if T-Mobile decides to source spectrum rather than acquire more spectrum.

Android: What's in it for Google

Why is Google so aggressive about giving away millions of copies of its royalty-free mobile operating system? It is expected to lead directly to mobile search revenue. Jeffries &Co. thinks Google mobile search revenue will cross the $500 million mark in 2011, up from roughly $180 million in 2009, for example.

Android devices will be available on all four leading U.S. mobile carriers in 2010, so the issue is how much penetration the Android operating system will be able to get.

Beyond what Android means for Google, the issue is what it means for the service providers selling devices powered by Android.

There is speculation that Verizon, for example, plans a major initiative centered around Android to battle the Apple iPhone. Verizon apparently has been mulling the value of getting the Apple iPhone, but might have decided to push Android devices and applications instead.

T-Mobile executives have to be wondering what they will do now that Verizon has positioned itself as a major proponent of Android, as T-Mobile had been touting Android early on as a differentiator.

But if all the top-four providers are selling Android devices, using the software to differentiate user experience might become key. Apple prefers to maintain a uniform interface. Android actually enables differentiated user interfaces. So the issue is whether Android supporters will be able to create end user experiences pitched to particular end user segments that are compelling enough to create viable device segments.

Twitter, social networking, Web browsing, email, voice and texting are examples of lead end user applications that have, or can be, the center of "application specific" device sales and usage modes.

Google expects to win by growing its ad business, no matter how many distinct new niches can be created.

4% of Users Account for 67% of Display Click Throughs

About eight percent of Internet users account for 85 percent of all clicks on Web ads, comScore reports. Just as significantly, just four percent of clickers account for 67 percent of all click through activity.

Predictably, there will be two major ways to look at the findings. The first is that online display ads "don't work." The second is that value is not captured by simple click through statistics.

The number of people who click on display ads in a month has fell from 32 percent of Internet users in July 2007 to16 percent in March 2009.

When first studied two years ago, about 3 percent of Internet users clicked on at least one display ad during the month. These clickers were segmented into heavy, moderate and light clicking segments.

In 2007 comScore, Starcom and Tacoda found that heavy clickers, representing six percent of U.S. Internet users, accounted for the top 50 percent of clicks. Moderate users, representing about 10 percent of Internet users, accounted for 30 percent of the clicks.

Light clickers, representing 20 percent of users, accounted for 16 percent of the clicks. By March 2009, those numbers had dropped substantially.

About four percent of Internet users in the most-recent survey would be considered "heavy" clickers. About four percent are moderate clickers. Some eight percent are light clickers.

The issue is what to make of the value of the 84 percent of Internet viewers who do not actually click on ads.

The results, comScore says, underscore the notion that, for most display ad campaigns, the click-through is not the most appropriate metric for evaluating campaign performance. Rather, advertisers should consider evaluating campaigns based on their view-through impact.

Other comScore research has shown that online display ads generate significant lift in trademark search, online and offline sales, and brand-site visitation across all verticals, among those internet users who were exposed to the online ad campaigns, whether they clicked on the ad or not.

“A click means nothing, earns no revenue and creates no brand equity," says John Lowell, Starcom USA SVP. “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."

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 Lowell.

Facebook, Twitter Growth Flattens

No tree grows to the sky, financial analysts are fond of saying, in predicting growth rates for popular new services, applications and device. Twitter and Facebook are no exceptions, it appears.

Somewhere in June 2009 Twitter stopped growing, according to data gathered by Compete. The same thing appears to have happened to Facebook at the same time.

The findings might be more significant for Twitter than Facebook, simply because Facebook has the larger user base, and therefore would have been expected to flatten out before Twitter. Twitter is several orders of magnitude smaller than Facebook.

In September, Twitter unique visitors fell by 0.17 percent, to 23,538,791, according to Compete. Facebook appears to gotten a bump in visits, but Twitter arguably dropped.

MySpace use dropped 11 percent while Bebo dropped 15 percent over the same peiod, so there possibly are some background changes. People might be switching social networks while others might be tiring of using them.

ShoZu Launches App Store

ShoZu Ltd has launched its App Store, where smartphone owners can purchase the ShoZu social media app for most major mobile operating systems. The store complements ShoZu’s availability at Apple’s App Store, Nokia’s OVI store and Research in Motion’s BlackBerry App World.

The ShoZu App Store currently offers the ShoZu app for BlackBerry, Windows Mobile and Nokia smartphones, as well as iPhones, with support for additional models and operating systems to be announced. The ShoZu App Store sells the app for the same price as the third-party app stores.

ShoZu describes itself as an intelligent social media hub allowing people to easily exchange video, pictures and commentary between mobile devices and favorite social networks, photo sharing sites and information resources.

The company’s technology provides fast, easy, one-click uploads of photos and video clips from the mobile to the Web, full-resolution photo and video delivery without compression. It also can push content to the phone and work in the background even if a connection is dropped.

Which User Segments are Most Likely to Switch to Prepaid?

Prepaid wireless has been on a tear of late, growing to 55 million U.S. users and about 17 percent of all U.S. wireless accounts in service. And though prepaid traditionally has been centered on "banking challenged," "low income" or "youth" market segments, that is starting to change as consumers from a wider range of segments seem to be opting for

Often thought of as a "consumer" option, one also has to wonder whether at least some business users might consider switching to prepaid, for at least some employee segments.

That, at least, is what Compass Intelligence thinks could be happening at smaller firms, for example. A recent change that could be driving such interest are new "unlimited" talk and texting plans from firms such as AT&T.

In a recent survey, Compass Intelligence found that a high percentage of respondents indicate plans to give new prepaid devices to one or more employees.

Another segment Compass Intelligence found was interested in prepaid plans are "larger families."  The larger the family, the more mobiles they currently use and the more likely they will replace postpaid wireless devices with prepaid options, Compass Intelligence says.

Users with multiple mobile devices also are more likely to indicate they plan to replace a postpaid wireless account with a prepaid option as compared to other segments.

About 11 percent of the respondents with three or more mobiles are willing to replace one or more of their postpaid mobiles with prepaid, while only three percent of the respondents with only one mobile device indicated plans to do so.

When adding a new device, 22 percent of respondents indicate they will add prepaid mobile.

The apparent relationship between prepaid demand and family size and number of devices is likely the result of U.S. consumers and businesses seeing wireless devices as "nice-to-have" items that are useful for more members of families and employees, along with the ability to limit financial exposure.

One of the advantages of prepaid service is that it can be terminated easily, allowing parents and business managers to quickly cut back on such service if necessary.

AT&T Launches New $60 Unlimited Prepay Plan

 AT&T has launched a new $60-a-month unlimited talk and text plan. AT&T's "Unlimited Talk and Text" plan for GoPhone is available October 12, 2009 and offers unlimited nationwide calling and unlimited texting to anyone in the United States, plus texting to Mexico, Canada and more than 100 other countries worldwide, for an additional fee.

“We recognize GoPhone customers have a need for unlimited calling or texting without the commitment of an annual contract,” says Judy Cavalieri, vice president of Prepaid Products for AT&T Mobility and Consumer Markets.

The prepaid offer comes without contract, and can be paid for completely "as you go" or as a monthly rate plan, without a contract, credit check or deposit.

The offer is evidence of a new level of competiton in the wireless prepaid business, which now is starting to compete more directly with postpaid offers. Handset limitations are emerging as the key difference between postpaid and prepaid offers, to an extent, not usage charges or even form of payment.

Lots of Changes in Mobile Business

"In our conversations over the past month, we noticed a potential shift in the relationships and economics between wireless carriers and video content providers," says Rajeev Chand, Rutberg & Co. managing director. And that might be the least of the changes of interest to end users.

"For example, several executives noted to us that certain U.S. carriers reduced or decoupled video content bundles from basic or unlimited data plans," he says. "The result has been a short-term reset in the video content provider economics: rather than carriers pay licensing fees for proprietary or bundled content, to assist in subscriber marketing and growth, carriers are paying licensing fees associated with separate video packages which have different consumer buying processes and patterns."

In other words, instead of using video content as a carrot to drive mobile broadband adoption, it is being marketed as a stand-alone application for which addtional fees are required. Oddly enough, at least some mobile operators might be concluding that it doesn't pay to encourage packaged video consumption, at least at lowish prices, especially when the additional load on networks is considered.

“The threat from over-the-top is now and has never been greater,” says Chand. For wireless carriers, the risk is greatest from the incumbent Internet firms, rather than the startup mobile Internet firms, as consumers know the incumbent brands and navigate directly to them.

In that regard, recent movement in the partnership area between Google and Verizon, and Google and Sprint, is interesting.

Though the potential trend will clarify only when a few more moves are made, it appears that AT&T and Verizon are moving in different directions in terms of mobile Web strategy. Sprint, meanwhile, seems to be taking an approach akin to that of Verizon.

The changes could reshape operating system market shares, strategic role of browsers and the ways "open" network platforms can lead to differentiated service experiences.

The potential shift of strategies has been brewing for some time, and perhaps the most-visible sign has been the debate about whether Verizon would embrace the Apple iPhone once AT&T exclusivity ends.

The equally important, but less visible piece of the puzzle is the development relationship Google already has struck up with Sprint Nextel and Clearwire. As part of those efforts, the Android operating system has gotten a boost.

But AT&T might be distancing itself from Google and turning to a range of partners usually more associated with European operators, from Opera to Nokia. That would explain the rather cryptic remarks overheard at the CTIA Wireless I.T. and Entertainment about Symbian "having a resurgence in the U.S. market."

That belief would be hard to explain in the absence of some major push by one of the major U.S. carriers to support Symbian-based devices and applications. Right now, the thinking seems to be that AT&T is considering such a move.

But it would likely be a mistake to characterize the shifts as merely instrumental or confined to market shares for various ecosystem participants.  The more important change is the differentiated end user experiences that would be possible.

Though details are sketchy at the moment, the new Google-Verizon collaboration might lead to a distinctive set of user interfaces, applications and devices optimized for the mobile Web, and for users with different key interests.

In the new scenario, carriers would be able to compete on differentiated experience, not just unique handsets, payment models, package elements or device features.

Though one line of thinking is that "open" networks will lead to service providers becoming "dumb pipes," the new approaches aim to create differentiated and packaged experiences that have service providers acting in a more traditional role.

As Verizon seems to be positioning its Google collaboration, the service provider would create Android devices carrying the operator's brand and software portfolio, though other Android devices with less integration also would be available.

What is intriguing here is the use of third party and open development, in conjunction with carrier packaging, to produce a flourishing of end user options. Instead of commodity-like devices with a a set look, feel and function, one might see devices optimized for particular end user verticals.

FCC Opens Inquiry into Google Voice Blocking

The Federal Communications Commission has opened an inquiry into Google Voice's call blocking of traffic to some high-cost numbers used by free conference calling services.

Google does not deny blocking access to those numbers, but argues it is a Web service offering an optional call connection service, and does not have a common carrier obligation to deliver calls to virtually any phone number.

AT&T obviously believes Google Voice has to terminate those calls, even though it is an application, not a common carrier provider of voice services.

Google says its phone management service isn't subject to common carrier telephone rules because it is free and consumers can use it only if they have a traditional telephone line.

AT&T and other carriers say they don't want to pay high access charges either, and do not believe any providers of termination services should be able to selectively block calls.

It isn't yet clear where the inquiry might lead, but it is another reminder that the regulatory framework that treats common carriers differently from application providers is intellectually incoherent.

The only issue is whether we are yet at a regulatory tipping point where some drastic revision is needed.

For at least three years, regulators have debated--without clear conclusion--where voice services over the Web fit in. Web services, which can include Skype, maybe Google Voice, and Comcast Digital Voice, are for now viewed as information services and not subject to the more heavily regulated treatment "service providers" are subjected to.

What is clear is that the old distinctions are becoming unworkable.

"Much as the FCC wishes there was still a clear distinction between 'the Internet' and 'the telephone network,' technology has obliterated that difference," Larry Downes, a non-resident fellow at the Stanford Law School Center of Internet and Society, notes.

He proposed the FCC wipe the slate clean: "Hold everyone to the same rules regardless of what information they are transporting-whether voice, video, television, data. Because regardless of who's doing what, these days it's all bits."

Such a sweeping reform necessarily would mean ending the way the nation now regulates cable TV, telephony and the Internet. That will ruffle lots of feathers, but it has been clear for some time that the differing regulatory frameworks increasingly are old of step with market realties.

To wit, we use one set of rules for "telcos," a different set of rules for "cable companies" and a third set for application providers, even when they offer similar, iidentical, overlapping or functionally similar services and applications.

"If it walks like a duck, talks like a duck, it's a duck" is a non-technical way of dscribing how the FCC traditionally has looked at resolving questions within the common carrier world. As more providers enter that business, but with different regulatory treatment, there has to be pressure to treat all ducks as ducks.