Judge allows Sprint suit against AT&T/T-Mobile deal

A U.S. judge has ruled that Sprint and C Spire Wireless can pursue part of their antitrust lawsuit against AT&T Inc's proposed $39 billion acquisition of T-Mobile USA. Though the judge dismissed large parts of the suit, U.S. District Judge Ellen Huvelle agreed to allow the competitors to pursue their injury claims about the effect the deal would have on the market for wireless devices.


AT&T and T-Mobile, a unit of Deutsche Telekom AG , had sought to dismiss the lawsuit, but U.S. District Judge Ellen Huvelle agreed to allow the competitors to pursue their injury claims about the effect the deal would have on the market for wireless devices.


The decision may complicate matters for AT&T and T-Mobile USA because they will now have to simultaneously fight the government's attempt to block the deal and argue against claims by the two competitors. Sprint suit against AT&T/T-Mobile deal


Though the outcome remains in doubt, some observers might argue that the fearsome, well-oiled AT&T regulatory affairs team has had an unexpectedly difficult time making the argument in favor of the acquisition. 


Some might argue that this indicates not some sudden loss of effectiveness on the part of AT&T's persuasion machine, but merely that the case is a tough one to present. 


Perhaps most difficult in that regard is the argument that there is a spectrum shortage that will be alleviated, in substantial ways, if the acquisition moves forward. Others have pointed out that it would cost less for AT&T simply to light up spectrum it already owns, for example. 


The other problem, from an antitrust perspective, is that market concentration in the U.S. mobile industry already exceeds the normal tests antitrust attorneys normally use to determine the extent of market concentration. HHI index

Google Looking at Triple Play Services

Google, reports the Wall Street Journal, is looking to add video entertainment services, and possibly voice, for customers of its 1-Gbps fiber to home network in Kansas City, Mo., and Kansas City, Kan. The moves would be logical. 


Many observers have wondered how such a network, delivering only 1-Gbps Internet access service, at prices "comparable" to existing services provided by telcos and cable companies, could possibly generate enough revenue even to break even.

As it turns out, Google has no magic rabbit to pull out of its hat. The costs of its network are not dissimilar from the costs any other service provider would incur. And few service providers would contemplate building a fiber-to-home network with a single revenue stream, namely Internet access.

Of course, Google could have chosen to operate as a "wholesale only" provider of bandwidth to other service providers. It could still do so. But the few U.S. examples of access network providers who attempt to operate "wholesale only" have not proven highly viable, most would probably conclude.

The only way to approach break-even apparently is to operate the network the way all other such networks are operated, namely providing retail triple-play services to consumers.

Nobody expects Google to become a "service provider" with its own facilities, on a wider scale. But that isn't the point. To some small extent, Google might become a distributor of voice and video services, not just a broadband access provider. But once it secures distribution rights, there are other possibilities.

So far, it seems unlikely Google would get licensing rights that will immediately save consumers money. In fact, any video rights will likely include the normal clauses that require Google to pay as much as other video distributors. But if Google were to focus its services only on "over the top" delivery, it might still have a clear price advantage, compared to other service providers who must build and operate access facilities, of course.

Google might also find it only can get content rights if it agrees to bundle channels in the typical way cable, satellite and telco TV providers do, which would limit the amount of innovation Google could attempt. Also, until Google got serious volume, the prices it pays for content rights will not allow significant retail price discounts.

But any move by Google into the triple-play services market would be a bit of a shock, even if nobody thinks Google wants to become a traditional service provider. The broader issue is that if Google can get what essentially amounts to "streaming rights" to most of the standard TV channels, it would have a bit of room to challenge not only the telco, satellite and cable providers, but over time might gain some leverage to package those channels differently.

In the near term, we should anticipate little change, as the content providers will act in ways to protect the existing distribution model. Longer term, if Google should get traction, matters will change.

Google Ponders Pay-TV Business

Republic Wireless Readies $20/Month Unlimited Mobile Service

Republic Wireless is a new mobile phone service from Bandwidth.com that will be launching on November 8, with some features some users will find compelling. Republic Wireless teaser

Among those features is the price, said to be $20 per month, with unlimited talk, texting and data. The plan is also touted as truly “unlimited” with no bandwidth caps. $20 a month unlimited smart phone service?


Republic is a mobile virtual network operator, but is integrating Wi-Fi connectivity and software that will switch connections between the mobile network and the Wi-Fi network automatically.

The hybrid service essentially will default to Wi-Fi whenever possible, and use the mobile network only when Wi-Fi is not available. 


That should translate into lower calling costs for end users, since Bandwidth.com will be able to use fixed network VoIP much of the time.

Public Wi-Fi usage

In all likelihood, pricing will set at levels much lower than what users typically expect from mobile service plans, and without need for a contract. Republic Wireless


Users will have to buy a new device specially created by Republic Wireless, which undoubtedly will prove a barrier to some users. But $20 a month, with unlimited data access, texting and calling, is going to be attractive to lots of people.



Smart phone owners are using Wi-Fi hot spots in increasing numbers, both in the home and out in public.  A recent study by WeFi shows an uptick in smart phone data consumption, much of it by users on the Android platform, for example. That might explain why the Republic Wireless service will use Android devices.  Smart phone Wi-Fi usage

"Zero" Effect of Government Stimulus Spending over 50 Years

Nothing is more important than understanding whether particular sets of government spending actually "solve" the problems they are supposed to fix. The reasons are hugely significant, such as whether certain government policies can "help" get an economy out of recession, and "merely" important as matters of good public policy, including the charge not to waste huge amounts of taxpayer-supplied revenue.

The problem is that there is arguably much more disagreement among economists about macro-economic policies than about micro-economic policies. And though not everyone will agree, a study of 50 years worth of government spending by economists at the Phoenix Center for Advanced Legal and Economic Public Policy Studies finds that such spending has “zero” effect on private-sector job creation.

“During periods of economic sluggishness, we find that government spending has zero effect on private-sector job creation,” the report suggests. “This result is consistent with the apparent impotence of huge federal government spending increases  aimed at reducing unemployment.”

In contrast, when it comes to job growth,  expansions in private investment are
effective in both regimes, but its efficacy is greatest during economic stagnation, the study authors say.

By implication, policies that discourage private investment may have severe job-killing effects during economic downturns, since it is during the low growth periods that private investment is most effective at creating jobs. Spending has no impact

The effects on (various measures of) economic activity of government spending and private investment have been studied by economists for decades, and while the economic stimulus effects of private investment are unquestioned, the effects of government spending on labor markets remains an open empirical question, the study says. That might come as a surprise to some who believe the impact of massive government spending during recessions are effective.

In our earlier work on the influence of regulation on job creation, titled Regulatory Expenditures, Economic Growth and Jobs: An Empirical Study, we found that even a small across the board five percent reduction in the operating budgets for all federal regulatory agencies (about $2.8 billion) would result in an increase in employment by 1.2 million private-sector jobs annually, growing private-sector GDP by about $75 billion each year, the authors say.

“Put differently, eliminating the job of a single regulator grows the American economy
by $6.2 million and creates nearly 100 private-sector jobs annually,” the study says.

Mobile Data Revenue Drivers Continue to Change

Most mobile service providers in developed markets have moved past the point where text messaging revenue is the primary “data service” augmenting declining voice revenues. That was not the case in the late 1990s or most of the first decade of the 21st century. These days it is mobile data plans for smart phones that have taken that role. Messaging drove revenue in mid-2000s

Mobile data revenue trends

In 2007, for example,  more than $28 billion was generated by mobile short message service (SMS), multimedia message service (MMS), and instant messaging (IM) services

between Western Europe and the United States alone. 

If email is also included, more

than half of all mobile data revenue in these regions was derived from messaging. It was true that mobile messaging was the foundation of most data strategies.

These days, it is smart phone data plans, augmented by data services for other connected devices, which is more strategic. Worldwide mobile connections will reach 5.6 billion in 2011, up 11 percent from five billion connections in 2010, according to Gartner. 


Mobile data services revenue will total $314.7 billion in 2011, a 22.5 percent increase from 2010 revenue of $257 billion. “Mobile data traffic will increase significantly as more people will have access to mobile data networks, there is a migration toward smart phones and an increase in sales of media tablets,” said Jessica Ekholm, principal research analyst at Gartner. 

Early in 2011, for example, Vodafone Group hit a milestone. Vodafone's latest quarter data revenue exceeded messaging revenue for the first time. 

Mobile data forecast

Vodafone's emphasis on sales of smart phones and associated data plans seems to have been the driver. Mobile data tops SMS

Right behind that strategy is expected revenue from connected devices that will include sensor applications of various types. Connected device revenue forecast

Machina Research, for example, estimates that connected devices will grow from nine billion in 2011 to 24 billion in 2020. The lion’s share of the growth will come from machine-to-machine connections, which will grow from two billion at the end of 2011 to 12 billion at the end of 2020.

That doesn’t directly translate into mobile service connections, though. The majority of those devices are expected to be connected using  Wi-Fi, which really is an untethered use of a fixed broadband connection. Machina Research expects 2.3 billion of those device connections will use the mobile network in 2020, accounting for 19 percent of all cellular connections.

That implies M2M revenue will grow to EUR714 billion ($979 billion) in 2020.

PC and laptop mobile broadband will grow dramatically, from 215 million connections at the end of 2011 to 1.5 billion in 2020. By 2020 most PC/laptop broadband connections globally will be mobile, the firm suggests.

Wireless wide-area connected tablets and e-readers will grow from 66 million in 2011 to 230 million in 2020, as well.

Growth in handset data users will also be significant, with 3G+ devices set to grow from two billion at the end of 2011 to nine billion by 2020.

Machina Research forecasts that global mobile data traffic will increase from four

exabytes in 2011 to 42 exabytes in 2020, with 60 percent coming from PC/laptop connections and 37 percent from handsets.

Machina Research expects mobile network  operator data revenue to grow from EUR130 billion ($178 billion) in 2011 to almost EUR500 billion ($685 billion) in 2020.

The basic evolution is from data revenues based on text and email services to mobile data plans to support smart phones, to be followed by connected devices. Initially, connected devices will be tablets and similar devices such as e-readers, but sensor applications will grow over the longer term.

Is Social Media Killing Your Business?

Though social media can be an important marketing, operations or customer support tool, it isn't always a good thing. Are you using social media in a way that builds a great reputation and enhances your business, or are you just spending lots of time on it, instead of running your business? In other words, just as social media can be a "time waster" for people, it can be a time waster for brands and businesses that might find they can better focus their time elsewhere.

If you’re spending more time "doing social media" than you are on the important work of your business, you need to reassess whether, in the grand scheme of things, spending so much time on social media is wise. Is Social Media Killing Your Business?

To the extent that a brand's messaging becomes confused because different messages are being communicated on different media, that also can be a warning sign that social media is ineffective. Indeed, it might be worse than ineffective if precious effort and time is diverted from other mission-critical tasks.

If you use "every" channel, instead of concentrating on those you can handle, with the time you have, you might likewise be wasting time better spent on other activities.

More Social Shopping by Men, than Women?

Though some studies suggest women use social networks more than men when shopping, a study by Performics suggests the opposite, namely that men are more likely than women to conduct five of six social shopping activities.

Contradicting commonly held beliefs about gender and social behaviors, the study showed men more frequently research product information, read reviews, compare products, find product availability and get store information via social networks, shopping and deal sites.

But women tend to search for deals, coupons and specials on similar sites more frequently than men. Contradictory data on use of social shopping

Aside from Facebook, men frequent social networks (at least once a month) substantially more than women.

Other studies have suggested that women use social media more when shopping. Gender differences in social shopping. One study suggests that men and women use social media differently. A study by Empathica, for example, found more men citing looking for information as a primary goal (36 percent) than women (28 percent) when interacting with a retail brand through social channels. 


But the gender split among those looking to stretch their budgets was far greater: 47 percent of women say searching for coupons and promotions is their primary use, compared with 33 percent of men.

Verizon API Will "Turbo" Mobile Broadband

Verizon will publish an application programming interface that could allow mobile consumers to "turbocharge" the network bandwidth their smartphone apps use, presumably for a small additional fee.

"I think one of the things that you could do is guaranteed quality of service," said Hugh Fletcher, associate director for technology in Verizon's Product Development and Technology team. 

"One of the things that we are right now is very democratic in terms of allocating spectrum and bandwidth to users. And just because you request a high quality of service doesn't mean you're gonna get it. [The network] will try to give it to you, but if there's a lot of congestion, a lot of people using it, it won't kick people off," said Fletcher. Verizon API To Give Apps 'Turbo'

The network optimization API will likely expose attributes like jitter, latency, bandwidth, and priority to app developers, Fletcher said. 


Despite expected complaints from some network neutrality advocates, there is a reason such an API might provide clear value to end users. Some of you might be using 3G or 4G networks, using different air interfaces, to use interactive cloud applications. If you do that often enough, on many networks, you will have discovered the experience problem caused by latency. 


Where older GPRS or EDGE data networks featured round-trip latencies in the 600 millisecond to 700 msec. range, LTE networks feature round-trip latencies in the 50 msec. range. 


One of the important elements of a cloud-delivered application experience is latency performance, even though we most often think of "bandwidth" as being the key "experience" parameter. 


Some might say the key benefits will be for gaming apps, but many of us can assure you that other interactive apps, even those not intrinsically dependent on "real time" protocols, can suffer from mobile latency. Latency issues

1/2 of New Virgin Media, BT Broadband Connections are for 30 Mbps or Faster

About half of new connections for high-speed broadband service at Virgin Media and BT in the United Kingdom are for service at 30 Mbps or faster. That is a pretty big deal, as up to this point, take rates for "super fast" service have been fairly minimal. 


This level of service, as a stand-alone product, retails for £35 ($56) a month on Virgin Media networks.  That's an important fact. Many have argued that even when "super fast" services are available, price is a barrier. 

Virgin Media is still on target to meet its coverage target of its 100 Mbps service being available to its complete cable network by the middle of 2012, this represents roughly half of U.K. households. 1/3 of UK Virgin Media customers can get 100 Mbps


By way of comparison, in Denver Comcast sells 20-Mbps connections for about $68 a month on a standard basis. CenturyLink sells a 40 Mbps connection for about $80 a month, where it is available, as a stand-along product. The Comcast Xfinity service running at up to 100 Mbps costs about $200 a month. 


The Xfinity 50 Mbps service costs about $150 a month. 50 Mbps Xifinity Most observers would say the 50 Mbps and 100 Mbps services are purchased mostly by business users.


German cable network operator Kabel BW claims that around 40,000 customers are using broadband with speeds of 50 Mbps or 100 Mbps. About three million homes are able to buy service at those rates. So buyers represent about one percent of customers. 100-Mbps demand

Also, the price for the 50-Mbps access service is about $41 a month. Kabel BW has found only about one percent take rates, at prices of $41 a month. 

Satellite, IPTV Video Market Share Growing

"In 2008, cable video made up 59 percent of the global pay-TV market, satellite video brought in 38 percent and IPTV was just a drop in the bucket," says Jeff Heynen, directing analyst for broadband access and video at Infonetics Research. Satellite, IPTV video services gaining ground

Now, Telco TV and satellite TV are closing on 50-percent market share, and will, by 2015, represent a majority of market share. 


That's the key implication of competitive markets that once were legally or virtually monopolies. The incumbent loses market share. In fact, that's a good working definition of whether a pro-competitive policy framework is working. When the incumbent loses significant share, that is the definition of "success."


In fact, cable TV executives now already talk about their future revenue streams being built on broadband and other services other than video. 


Overall, the global pay-TV market, including IPTV, cable and satellite video services, totaled $125 billion in the first half of this year and is projected to grow to $353 billion by 2015. Most of that projected growth will come from satellite and IPTV services.  Infonetics video study

Vonage Net Income Triples

Vonage Holdings Corporation reported that net income tripled to $24 million while its adjusted EBITDA was $40 million, in its most-recent quarter. Revenue was up $3 million from a year ago to $217 million, but this is down from $218 million just one quarter sequentially. Vonage Earnings

The real problem is that Vonage has just found it very difficult to grow. The company ended with 2,388,721 net subscribers lines, down from 2,397,660 at June 30, 2011 and also down from 2,399,035 as of September 30, 2010.


Vonage's 11-percent margin beats most retailers by quite some margin, but consumer VoIP remains a difficult business. 

Mobile Data "Family Plans" are Coming

Service providers have been slow to roll out new “family plans” for broadband access spanning fixed and mobile domains, or including a range of mobile devices. But that doesn’t mean they won’t do so. The issue is timing.


Family plans for mobile devices, for example, will undoubtedly have the same impact on revenue as family plans did for mobile phone accounts: grow accounts and revenue, but with much-lower average revenue per device, or user.


Under those conditions, it is no surprise that service providers haven’t been exceptionally interested in moving too quickly to create family data plans that allow a number of devices to share a common data account, much as plans now allow multiple phones to share a common pool of voice minutes or test messages.


Recently, leading mobile operators including Rogers Wireless and Bell Mobility in Canada, Telefónica Movistar in Spain, and Orange Mobistar and Proximus in Belgium have launched multi-device plans, though. SFR France launched an extra SIM option on one of its mobile data plans during the summer this year. Mobile Data "Family Plans" are Coming - Carrier Evolution

House Caps Mobile Taxes at 16.3%

The U.S. House of Representatives has approved a five-year freeze on any new state and local taxes targeted at cellphones and other wireless services, including wireless broadband access. 


Wireless customers now pay 16.3 percent in taxes and fees, more than double the average rates for other goods and services. 



Supporters of the legislation say states increasingly have taxed wireless mobile services as they have become more prevalent, and that most states now impose taxes that far exceed average sales taxes on other items. House OKs lid on cellphone taxes

Google Tries to Provide More Ad Transparency

"Because ads should be just as useful as any other information on the web, we try to make them as relevant as possible for you," says Susan Wojcicki, Google SVP, Advertising. Over the coming weeks, users will be able to learn more about ads served up to you by clicking the "Why these ads" link next to ads on Google search results and Gmail.


When you click the “Why these ads” link, you’ll find information about why you’re seeing a particular ad and how it’s personalized for you. If you’re searching for a local restaurant while you’re on vacation in Hawaii, you would see ads for restaurants that are nearby, rather than restaurants in your hometown.

"Why these ads?":

U.S. Mobile Banking Grows 21% in 6 Months

There's a big difference between mobile banking in the United States, and mobile banking in many other countries of the developing world. In the U.S. market, mobile banking is mostly about offering consumers convenience and operating a bank at lower cost. In developing markets, mobile banking is primarily about the basic ability to transfer money safely and reliably between two people, or between a consumer bank account and a recipient organization.

In basic terms, in the U.S. market, mobile banking is about checking balances and moving funds between accounts. It is expected to become quite a bit more transaction oriented over time, but for the moment, it largely is a matter of information retrieval, with the modest addition of ability to move funds between a user's accounts.

Nearly 14 percent of the total U.S. mobile audience (32.5 million users) used mobile banking services in June 2011, up 21 percent from the fourth quarter of 2010.

Mobile credit card services saw an even greater increase, with 18.4 million mobile users accessing credit card information, up 23 percent from December 2010. Mobile auto and property insurance services also exhibited strong gains as 7.2 million mobile users accessed insurance information on their devices, a 19-percent increase. Mobile Banking App Usage in the U.S. Increases 45%

Mobile Financial Services Usage 3 Month Avg. Ending June 2011 vs. December 2010 Total U.S. Mobile Subscribers Ages 13+ Source: comScore MobiLens
Mobile Financial Services CategoryAccessed in the Past Month	Unique Mobile Audience (000)
	Dec-2010	Jun-2011	Percent Change
Banking Information	26,765	32,451	21%
Credit Card Information	14,931	18,356	23%
Auto or Property Insurance Information	6,041	7,169	19%
Brokerage or Stock Information	8,695	9,576	10%

Clearwire to Stop Selling Sprint 3G

Clearwire has stopped offering postpaid plans to new customers and will no longer sell dual-mode WiMAX/3G devices that use Sprint's CDMA network. Sprint, for its part, says it will not sell Clearwire WiMAX phones after 2012. Clearwire dumps Sprint 3G


The moves clearly point to a shift by both carriers to Long Term Evolution. Sprint's shift away from WiMAX, and Clearwire's shift away from 3G both mean each carrier is free to emphasize Long Term Evolution services expected to be offered on both networks as the "preferred" 4G network, going forward. 

Sprint Nextel Corp. says it will stop selling phones and other devices compatible with Clearwire Corp.'s network at the end of 2012, as it switches customers to its own Long Term Evolution network. 


It is possible to paint the picture as a sign of deteriorating relations between Sprint and Clearwire, but a shift to 4G and LTE is the real meaning of the changes. Sprint is carving out LTE capacity from its own 3G spectrum, while Clearwire needs to build an entirely new LTE network using spectrum it might otherwise devote to WiMAX. 


Also, as Clearwire shifts away from a dual role as both a wholesaler of capacity and a retail brand, it has to be cognizant of what its wholesale customers want, and Sprint, Clearwire's top customer, clearly is signaling it wants LTE plus CDMA to be the preferred "dual mode" approach it prefers. 


The irony is that Sprint owns a majority of Clearwire. Sprint to halt WiMAX sales

Smart Phone Data Consumption Grows 427% on "Three" Network

U.K. mobile service provider Three says 97 percent of all the traffic on its network is data.

Also, since June 2010 and September 2011, there has been a 427 percent increase in data usage on Three, by smart phone customers.

  Data is 97% of Three traffic

How Much Will Tablets Drive Mobile Bandwidth Consumption?

Goldman Sachs figures tablet data consumption is increasing by 30 percent per year and by 2020 will account for 17 percent of all mobile data demand.

“We expect global tablet sales to grow over 300 percent through 2012,” Goldman’s analysts say. “Our forecast implies a 42 percent compound annual growth rate from 2010 to 2020 in network-activated tablet subscribers (tablets that actually subscribe to a wireless data plan) with monthly data usage assumed to grow at the rate of 30 percent per year from 1.5 GBytes month to over 20 GBytes per month in 2020,” Goldman analysts say.

That implies some future adjustment of mobile broadband plans, which at present tend to cap consumption at 4Gbytes to 10 Gbytes a month, with an average of about 5 Gbytes. Though it seems unlikely that smart phone consumption will reach those levels, tablet users using mobile broadband connections might easily exceed 5 Gbytes a month, if the Goldman estimates are correct.

How Much Will Tablets Drive Mobile Bandwidth Consumption?

Mobile VoIP About to Explode?

Mobile VoIP Forecast

Mobile VoIP subscribers will grow from 47 million in 2010 to almost 410 million by 2015, Infonetics Research forecasts. That is not a good thing for service providers.


Mobile service providers globally earn about $500 billion a year providing voice services.


In 2010, mobile operators made $13.21 per user, per year, from mobile VoIP services. That works out to about $1.10 per user, per month, demonstrating how little revenue there is to be made from over-the-top mobile VoIP services. Mobile VoIP forecast.


Consider that, even after a 20 percent decline over the last three years, monthly average mobile revenue is about $27.77 a month. That points out the complicated business impact of IP telephony and VoIP. 


So what happens if 363 million more mobile VoIP users are active by 2015? Assume the same revenue metrics for the additional 363 million mobile VoIP users, which is $13.21 per user, per year, compared to a typical payment of $27.77 a month for legacy voice services, or $333.24 a year.


If the 410 million mobile VoIP subscribers use nothing but VoIP, they would spend $131 billion less with mobile service providers than they used to.


That suggests a loss of about 26 percent of total mobile service provider revenue in four years. Mobile VoIP About to Explode?

New Nook, New Positioning?

Are there implications for Barnes & Noble as it prepares to launch its next generation of Nook e-readers? 

Some might say so, especially as Amazon’s new line of Kindles, especially the Fire, seem to be getting traction.

Up to this point, women have tended to be bigger buyers of e-readers than males. Also, Barnes & Noble is emphasizing more toys and goods for children in its retail stores.

The logical implication might be that Nook gets positioned as a device especially useful for families with children.

In the United States,  as recently as August 2011, tablet and eReader owners tended to be male and on the younger side. But according to Nielsen,  this is no longer the case.

In the third quarter of  2010, for example, 62 percent of tablet owners were under the age of 34 and only 10 percent were over the age of 55. 

By the second quarter of  2011, only 46 percent of tablet owners were under the age of 34 and the percentage of those over 55 had increased to 19 percent.

Looking at the data by gender underlines key changes in the e-reader category. Some 61 percent of all e-reader owners are now female, compared to 46 percent in the third quarter of  2010.



Smart phone owners are now evenly split between male and female and tablets remain primarily male. E-reader demographics