AT&T to Intro Data Equivalent of Toll-Free Calls

Consumers and businesses used to the idea of toll-free calling will get the bandwidth equivalent under a new plan AT&T Inc. is developing for content providers and developers of mobile applications.

Under the new plan, the app provider would be able to pay AT&T for bandwidth consumed by app customers, instead of the app users having the usage billed against their service plans.

In some ways the plan is analogous to the way Amazon.com has been paying the bandwidth charges to deliver content to Kindle e-readers. When users buy a book, newspaper or magazine, the delivery cost (bandwidth) is part of the retail cost of buying the product.

Some app providers will be leery, since the practice is one more way app and content providers could wind up paying delivery networks when consumers use their apps or services.

That might be quite a valuable feature for consumers who want to purchase mobile video content, for example.

AT&T to enable toll-free bandwidth

Android, Microsoft Have to Sell Ecosystem, Apple Doesn't

Apple, Microsoft and Android are recognizable and recognized brands. But Apple has one advantage Microsoft and Android do not. Apple can promote its brand without worrying about promoting an ecosystem. Android and Microsoft, to some extent, must do so. 


That's the challenge Google will have if it really wants to double the number of Android tablets it can sell in the coming year. Android is, in part, a choice to embrace an application ecosystem, not just a specific tablet or device implementation. 

Mozilla Bets on New Mobile Operating System

Can another new operating system get traction in the global mobile service provider market? Mozilla and some service providers hope so.

Mozilla’s “Boot to Gecko” project aims to create devices that can "boot to the web," running an HTML-based platform that works as well as other operating systems, at much-less cost, allowing production of lower-cost smart phones.

Those of you familar with Google’s Chromebooks will understand the idea. Some would say the “Open Web Devices” initiative uses the Android kernel but has an entirely new layer on top based on HTML5. 

Others might prefer to say B2G uses some of the same low-level building blocks used in Android (Linux kernel, libusb), but is not based on Android, and will not be compatible with the Android stack (in particular B2G will not run Android applications).


It’s essentially a complete phone system run on web technologies that gives the on-board software access to core APIs through an embedded version of Firefox. That, in turn, means all apps on the phone essentially run in the browser.

Carriers looking for new ways to inject themselves back into the revenue stream, since Apple’s iOS and Android have created independent roles within the value chain, creating a situation where end users buy based on the thrid party device first, with the choice of a service provider being a secondary consideration.

The issue is whether a brutally-competitive operating system market has room for a major new player. One might also ask whether Boot to Gecko is really as "carrier friendly" as some carriers might hope.

Boot to Gecko, based on HTML5, by definition will rely on cloud-based access to work. That means it is going to put more demand on mobile network bandwidth; it has to. Telefonica now is supporting G2G, but Mozilla is going to have to convince the major hardware manufacturers to support it. Who is going to do that do that?

Also, manufacturers and carriers have been arguing there are too many mobile operating systems to support. Even with the decline of Symbian, WebOS and potentially RIM, Mozilla will find it hard to overcome those objections. 

Boot to Gecko essentially is a thin client that will require good Infernet connectivity. Want to guess how many end users are going to trust any service provider in that regard? 

HTC to Brand New Smart Phones Using "One"

HTC has had a bit of a branding issue since deciding it did not want to be a contract manufacturer, but rather a retail brand in its own right. Some would argue "HTC" hasn't quite got the zing. 


Now HTC seems to have settled on "One" as its retail brand. 


Some would argue HTC has more pressing problems, though. The company’s sales for the month of January 2012 were down by more than 50 percent compared to the same month of 2011, and revenues have been lower than anticipated. 


HTC says it had revenues of $564 million ($16,615 million Taiwan dollars) in the month of January 2012, compared to $1.2 billion (NT$35014) in January 2011. 

In 2010, by some estimates, the company was making four out of the top-five best-selling Android handsets in the U.S. market.

 

Mobile Service Providers to Offer "Joyn" Messaging

Smart phone adoption is driving mobile service provider mobile broadband revenue. But smart phones also are cannibalizing service provider voice and messaging revenue.

In 2012 the increase in smart phone penetration will cause voice and messaging revenue erosion of 3.9 percent in Western Europe and 1.6 percent erosion in Eastern Europe, according to Informa Telecoms & Media.

In fact, every increase of 10 percentage points in smart phone penetration in a given market costs Western European operators a 0.5 percent loss of voice and messaging revenue, according to Informa calculations.

For such reasons, Spain's Telefonica, the UK's Vodafone, France's Orange, Telecom Italia SpA and Germany's Deutsche Telekom AG are set to unveil a new messaging system tentatively called "Joyn" at the Mobile World Congress, according to the Wall Street Journal.

Joyn is a service made possible by the “Rich Communication Suite,”  essentially messaging applications built on IP Multimedia Subsystem (IMS) standards.

GetJar Launches "Universal" Virtual Currency for Android

GetJar, acknowledged to be the world’s largest independent app store, has launched GetJar Gold virtual currency rewards that can be spent at GetJar, Android Market or Amazon.com.

The loyalty rewards are an enhancement to the existing GetJar Gold loyalty program, but exemplify one of the first virtual currency systems that not only are loyalty-oriented but allow currency redemption across much of the Android ecosystem.


Consumers earn GetJar Gold virtual currency by downloading any Android apps, and can spend it on premium apps and in-app purchases. GetJar Gold virtual currency can be used with any Android apps from any app store, including GetJar, Android Market and Amazon.


Developers can use the GetJar SDK to support GetJar Gold virtual currency for in-app transactions as well as upgrades from free to premium versions of their app. Virtual currency collected by app developers can be exchanged with GetJar for real dollars. GetJar Virtual Currency

Samsung to Unveil 10-Inch Galaxy "Note" Tablet

It increasingly is getting to be the case that manufacturers of 10-inch tablets want seven-inch models, and makers of seven-inch devices think they have to compete in the 10-inch form factor as well. Samsung is the latest supplier to make that move to provide both 10-inch and seven-inch models.

29% of Smart Phone Owners Use Devices for Shopping

New research from Nielsen reveals that 29 percent of smart phone owners use their phone for shopping-related activities. 

And one big difference between how smart phones get used, compared to PCs, is that people use their mobile devices while they are in stores, in the process of shopping.

Retailers might not always appreciate that face, since users often are comparing prices at online or other physical locations. 

But people also appear to be checking product review while in stores. 

Top activities among mobile shoppers include in-store price comparisons (38 percent  of mobile shoppers), browsing products through their mobile Web or apps (38 percent h) and reading online product reviews (32 percent). 

Apps, which account for the majority of mobile phone time in the U.S., may be the key to shifting consumers from browsing products on their phone to making purchases on the spot. 

Although only nine percent of mobile shoppers have used their phone to pay at the register, the desire to do so is apparent, says Nielsen.

Some 71 percent of app downloaders would be interested in an app that allows them to use their phone as a credit card. 

Apple iPhone users are more interested in this option than Android users, with over a third (39 percent) saying they would be extremely or very interested in an app with this ability.

3 Outcomes for Mobile Commerce: 2 are Negative

It never has been terribly easy to describe the mobile payment ecosystem and it arguably has gotten more complicated now that so much focus is going to mobile wallet and mobile commerce functions.

Mobile payments originally might have been more centrally involved with transforming payment and banking operations and experience. But a broader emphasis on mobile commerce now promises to potentially change “shopping” in a broad sense, with a potential blurring of online and offline shopping experiences.

In fact, you might now consider “mobile payments” to be one segment of the broader “mobile commerce” business, including mobile payments at retail locations, mobile wallets for consumer identity and loyalty functions, personal finance and banking, money transfer and then marketing and incentive operations for advertisers and retailers.

At the very least, there is potential for rearranging value and hence participant revenue within all the existing legacy businesses in the retailing, banking, payments and marketing industries. The larger question is whether value, and industry revenue, grows or possibly shrinks, whether new roles are added and new industry segments are created.

If mobile commerce and payments do not grow the business, in terms of revenue for existing and new participants, then participant welfare will, in many cases, be worse than before. In other words, mobile commerce will wring revenue and profits out of the participating businesses, as the Internet has tended to do in other businesses it has transformed.

On the other hand, mobile commerce, particularly in the marketing and advertising arenas, has potential to shift revenue into mobile venues from other online or offline channels. In this scenario, participant revenues could grow, allowing new participants and roles to be created, while virtually all contestants potentially gain.

The third possibility is that aggregate participant revenue neither grows nor shrinks dramatically, strictly because of a shift to mobile commerce and payments, meaning most contestants simply “run in place.” In other words, most participants might find themselves spending money to keep what they now have, rather than growing.

Put simply, for the entire commerce ecosystem, there are basically three revenue outcomes, and two of those outcomes are negative. Since a mere shift to mobile forms of commerce does not change aggregate consumer disposable income, one has to assume that mobile commerce offers the potential to shift participant revenues, or possibly reduce friction in the shopping process.

But there is one obvious exception to that “rule.” It is entirely possible, and even likely, that revenue will shift from offline and online marketing and advertising channels into mobile marketing and promotion.
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source

Deutsche Telekom Invests in Pinger

T-Venture, the venture capital arm of Deutsche Telekom, has made a  $7.5 million  investment round in free messaging provider Pinger.

Pinger isn't the first over the top application or service Deutsche Telekom has invested in. In 2007 Deutsche Telekom lead a round of investment in Jajah, a significant provider of over the top voice services. 


Telefonica now owns Jajah. 


Those investments in over the top messaging and voice are not as odd as one might think. It certainly is true that such over the top apps increasingly are competing with, and displacing, traditional mobile service provider voice and messaging services.


On the other hand, even though over the top services cannibalize legacy revenue, such apps also allow firms such as Telefonica and Deutsche Telekom to make revenue and get customers outside their traditional service territories. 


Much as firms acquire other firms in new areas to gain the additional customer base and revenue, so over the top apps, even when cannibalizing some amount of in-territory revenue, also create the foundation for new revenues outside a traditional service territory. 

Google Selling Clearwire Stake

Google is selling its stake in Clearwire, amounting to 29.4 million shares of ClassA common stock, at $1.60 per share. The sale ends one Google experiment aimed at spurring broadband deployment, much as Google has experimented with municipal Wi-Fi networks, is testing a 1-Gbps local access network in Kansas City, Kan. and Kansas City, Mo.. and has given support to white spaces initiatives. 


It has been a while since Internet service provider executives seriously wondered whether Google had aspirations to become a service provider itself, either in the mobile or fixed realms. Google arguably has the money and complementary assets to do so. 


To be sure, Google has been investing in long haul facilities since at least 2005, but that is similar to Google investing in its own data centers. Both are core supports for many of Google's businesses. That doesn't mean Google wants to be in the local access business, really. 


Of course, Google did announce that it was prepared to bid as much as $4.6 billion for wireless spectrum in 2008, but the company did so to trigger "open access" provisions. Google didn't want to become a wireless service provider.

Mobility Has Reached Tipping Point for Businesses

Symantec’s “2012 State of Mobility” report suggests business use of mobile devices now has reached a tipping point. Most organizations are making line-of-business application available. Some 59 percent of respondents reported this to be the case.

Also, 71 percent of businesses are now looking at implementing a corporate “store” for mobile applications.

The survey was conducted by Applied Research and involving 6,275 organizations of all sizes in 43 countries.

Security remains a key issue, though. Small and large businesses have suffered a variety of losses, measured by direct financial expenses, loss of data, and damage to the brand
or loss of customer trust.

Within the last 12 months, the average cost of these losses was $247,000 overall. Small businesses averaged $126,000 of loss, while enterprises averaged $429,000. In the end, however, most organizations feel that mobility is worth the challenges. About 71 percent of respondents say they at least break even on the risks versus rewards.

Google Nexus Tablet for Sale in April 2012?

Kindle Fire

Google says it will formally adopt a hardware strategy featuring a range of devices that will compete with Apple products. 


A new Google Nexus tablet might be on the market in April 2012, and would represent one of the products Google plans to launch and support. 


According to Richard Slim, an analyst with DisplaySearch, Google is working on a tablet with a seven-inch display and 1280 by 800 pixels of resolution. 


Slim believes the device will retail for $199, in line with the Amazon Kindle Fire and Barnes & Noble Nook . Google Nexus tablet




Of course, Google also already markets three tablet devices in other form factors, by virtue of its ownership of Motorola Mobility. Those include the  10.1-inch Xoom, the 10.1-inch Xyboard (Xoom 2), and the 8.2-inch Xyboard. 

You might well argue that the seven-inch segment is big enough to require a presence. 

Amazon shipped 5.3 million Fires in the fourth quarter of 2011, according to DisplaySearch's numbers. 

Is "Spectrum Crunch" Real?

Two "debates" seem primed to rage over the next couple of years. First, there will be an argument about whether the mobile "spectrum crunch" is real or not.

Second, there will be a sharp debate about how to allocate a huge block of "refarmed" former TV broadcast spectrum for mobile purposes.

The first argument includes both doubters who suspect bandwidth issues are not as pronounced as most in the industry believe, as well as proponents of alternative approaches, such as allocating large amounts of new unlicensed spectrum.

Of course, many argue that the spectrum needs are real, noting that smartphone traffic in 2015 will be 47 times greater than it is in early 2012.  New devices such as tablets also use 120 times as much bandwidth as smart phones.  Expect lots of sparring over spectrum issues over the next couple of years, for obvious business reasons. Without spectrum, a mobile service provider has no business at all. And many would argue more benefits will accrue to businesses and consumers if lots of unlicensed spectrum is made available. 

Google to Launch Line of Consumer Devices?

Google might be preparing to create and launch a whole family of consumer devices that would compete against Apple products. 


Depending on your perspective, that is either a dangerous shift of strategy or only the logical extension of Google's increased profile in the devices business. 



Google's Android operating system is a major global presence in smart phones and tablets, and Google also has built and sold a "hero" Nexus device to illustrate what it believes can be done in the smart phone area using Android. Google has purchased Motorola Mobility, and so now is a supplier of mobile devices. 


Google also provides support for a couple of firms building Chromebooks, meaning Google already is partly in the PC business. And Google already has cooperated with a few manufacturers on Google TVs.


Google recently announced it was going to build and market an in-home music entertainment system, as well. 


So a formal "hardware strategy" wouldn't be much of a stretch. 


Google and Apple seem destined to compete on many fronts, a fact that has been clear for a few years, dating back to the days when Eric Schmidt, then Google CEO, was a member of Apple's board of directors. Schmidt resigned in 2009.

A Startling Difference in Android and Apple iOS Traffic Patterns

There is an almost-shocking finding in comScore’s recent “Mobile Future” report: 75.2 percent of all Internet traffic coming from Apple iOS devices comes through a Wi-Fi connection, while 71.4 percent of Android traffic come through mobile broadband access.

In December 2011, WiFi connections drove 40.3 percent of mobile Internet connections by smart phone and 92.3 percent of tablet Internet connections in the U.S. market.

For whatever reason, users of Android devices of all types seem to rely on their mobile broadband connections far more than iOS device users. Perhaps the difference is the use of Wi-Fi-only iPod “Touch” devices, or some difference in the types of data plans iOS users buy, compared to Android users.

It is a startling difference, whatever the reason.

T-Mobile USA to Light LTE Network in 2013

T-Mobile USA says it is gong to invest $4 billion in its business, including use of the spectrum it received from AT&T as part of the “breakup fee” for failure of the AT&T effort to buy T-Mobile USA, to launch its own Long Term Evolution network in 2013, the company says.

The $4 billion network modernization and 4G evolution effort, which will improve existing voice and data coverage and pave the way for LTE service by 2013, also will, at some point require additional spectrum, T-Mobile USA says.

As part of the modernization effort, T-Mobile USA will install new gear at 37,000 cell sites and “refarm” some spectrum to launch LTE in 2013. The key part of that effort is the integration of additional spectrum T-Mobile will receive as a result of the termination of the AT&T transaction.

T-Mobile USA also says it will deploy HSPA+ in its PCS (1900 MHz) spectrum band.

The new LTE 4G network will be available in “the vast majority of the top 50 markets,” with 20 MHz worth of bandwidth in 75 percent of the top 25 markets, the company says.
But not all the investments are network related. T-Mobile has for some time been trying to win more business users, and now plans to add 1,000 new sales people as part of that effort.

T-Mobile USA also will be increasing its advertising spending and looking for more mobile virtual network operator (MVNO) partners.

T-Mobile USA also will remodel its retail outlets and likely expand the number of locations, as well.

In the fourth quarter of 2011, T-Mobile USA reported service revenues of $4.57 billion, down from $4.69 billion in the fourth quarter of 2010. Operating income (OIBDA) was $1.40 billion, up from $1.34 billion reported in the fourth quarter of 2010.  

Blended average revenue per user in the fourth quarter of 2011 was $46, consistent with the fourth quarter of 2010.  Net customer losses were 526,000 in the fourth quarter of 2011, compared to 23,000 net customer losses in the fourth quarter of 2010.

T-Mobile USA had 33.2 million customers at the end of fourth quarter 2011, compared to 33.7 million customers at both the end of third quarter 2011 and the end of fourth quarter 2010.

T-Mobile USA executives noted that the inability of the firm to sell the Apple iPhone did have a material impact on the company’s fortunes during the year, especially in the fourth quarter, when the Apple iPhone 4S launched.

Churn from branded customers was 3.6 percent in the fourth quarter of 2011, up from 3.2 percent in the third quarter of 2011, and 3.4 percent in the fourth quarter of 2010.
This look at spectrum ownership in 2010 does not reflect the addition of former AT&T AWS spectrum to T-Mobile USA’s total, and the deletion from AT&T’s holdings. 

Google Shows Surprising Strength in Display Advertising

Facebook now is the largest recipient of display advertising in the U.S. market.  But Google’s display business is growing faster than anticipated, and will surpass Facebook’s next year, according to a new forecast by eMarketer.

That will come as a surprise to many who had thought it would be much harder for Google to catch up.

Net U.S. display advertising revenues at Google reached $1.71 billion in 2011, just below the $1.73 billion Facebook earned the same year. In 2012, display revenue growth at both companies will be nearly identical. 

That is a huge change in market dynamics. Google is expected to surpass Facebook in 2013. 

The overall US display advertising market, which includes spending on online video, sponsorships, rich media and banner advertisements, grew 25.2 percent to $12.4 billion in 2011, eMarketer estimates, and will increase to $15.39 billion in 2012.

Both companies are pulling away from other contenders in the display category, as well. 

What Tablets Tell Us about "Work"

Tablets have provided some important insights about the ways "work" gets done these days, with clear implications for use of PCs and even traditional "work" applications. Tablets will displace PCs to some extent. The only issue is how great the displacement trend will become. 


There is mounting evidence that tablets are, in fact, displacing PCs (especially notebooks). But "why" such displacement is occurring is what is really important. 


One might argue that user behavior, in either consumer or work roles, has changed. PCs originally were "work" devices. Though most do not remember, it was a single application, the spreadsheet (VisiCalc), that created the initial demand for PCs. Over time, other work applications, such as word processing, moved to PCs as well. 


Since the advent of the Internet, especially the World Wide Web, user behavior has morphed. A great many pursuits no longer "specifically" require a PC. 

These days, about 75 percent of everything that users do on PCs is content consumption. Most people, most of the time, even at work, are consuming created content, not “making it.” They are browsing the web, reading documents or manipulating data. People are watching video, listening to audio and using social networks.

And most content creation will involve reading and replying to email, much of the time. That can be done other ways.

The point is that, since the advent of the Internet, especially the World Wide Web, user behavior has morphed. A great many pursuits no longer "specifically" require a PC. And less total time is spent on “work” activities.

You might say that “casual computing” has become the dominant way most PCs are used.
Scanning news feeds, browsing the web, emailing, reading an eBook, connecting on Facebook and tweeting can be done on many devices, not just PCs.

One might argue that casual computing and content consumption are, for most workers, most of the time, all they need to do.

An anecdote might illustrate how much matters are changing. People do not have access to Microsoft Office on their Apple iPhones, but they still manage to do “work.” People use tablets at work, but iPads do not feature Microsoft Office. They still manage to use tablets for work purposes, or at least people often claim they do so.

Android users and some Chromebook users do not use Microsoft Office. They still seem to get work done. The point is that people now use a range of devices to support “getting work done.” In many cases, they seem to do so, without use of fundamental “work” tools such as PCs, notebooks or Microsoft Office.







Over time, more time will be spent on smart phones, tablets and other devices, based simply on the proliferation of such devices in consumer and work markets. And it also appears more "work" will be done on tablets, smart phones and other devices because much "work" does not require all the capabilities of a PC or standard office productivity applications. 

France Télécom 2012 Challenges Will Not be Unusual

France Télécom (operating as "Orange") experienced a drop in its net profit for 2011 and said competitive and financial pressures are likely to intensify. That is not likely to be confined to France Télécom alone, as European Union telecom service providers face continued pressure on revenue due to mandated European Community cuts on roaming fees. 


In its historic home market, Orange faces a fourth new mobile operator, Free, competing using aggressively discounted prices. As of Feb. 15, 2012, France Télécom had lost 201,000 subscribers, or about 0.7 percent of its total customer base in France.


The sovereign debt crisis in Europe also is part of company thinking, as France Télécom now believes it should be hanging on to more of its internally-generated cash, given the higher levels of uncertainty. 


To be sure, there are broader signs of trouble in many markets, and the additional pressure is not new. 

But company officials also said financial pressure would be coming in other ways, noting more regulatory restrictions and higher taxes as well. 


The owner of Orange brand also said it targets an operational cash flow of close to €8 billion ($10.59 billion) in 2012. France Télécom challenges 

France Télécom also cut its dividend and backed off from a promise to buy back shares, as part of the plan to strengthen cash reserves.a

The 2012 payout will be in a range of 1.21 euros to 1.35 euros a share, Chief Financial Officer Gervais Pellissier said, scrapping a previous projection for 1.40 euros. Operating cash flow will be about 8 billion euros ($10.6 billion) this year, declining from 9.3 billion euros in 2011.

Following Telefonica SA and Telekom Austria AG, France Télécom  is the latest phone company to back away from dividend forecasts. 

Deutsche Telekom and Telefonica are likely to announce dividend cuts of their own. 

So far, that dividend cut trend has not spread to U.S. tier-one providers. But Frontier Communications recently lowered its dividend.