T-Mobile and Sprint: A Transformative Acquisition

If T-Mobile USA parent Deutsche Telekom does decide to attempt an acquistion of Sprint Nextel, and if that bid were to succeed, T-Mobile would emerge as the largest U.S. mobile provider by quite some measure.

Up to this point AT&T, Verizon Wireless and Sprint Nextel have held roughly equal shares of the market, and all three have had more than twice the market share of T-Mobile.

There are many regulatory, technical and even psychological issues to surmount, though.

Consider that T-Mobile and Sprint now operate three classic mobile air interfaces. Xohm will create a fourth. And then there's Long Term Evolution. Complexity means cost, and that's t0o many different networks to continue operating.

Still, Sprint's low stock price and strong Euro have to be driving some hard thinking about the feasibility of pulling such a merger together. Regulatory or other concerns might ultimately deter making of an offer, or scuttle a merger attempt.

But it would be a transformative move for T-Mobile.

VOD: First You Have to Find It

Before any form of on-demand media can be watched or purchased, it has to be found. That's been a growing issue even for linear media as channel counts have risen over the last two decades, not to mention user-generated video found only on the Web, or the growing range of on-demand video options.

In a parallel but almost-perfect metaphor, paper "viewing guides" have become dysfunctional. Even in the walled garden, linear programming, one screen world, there's just too much information, and too many choices, to display. And that means content isn't found.

Those of you who use the Netflix or Blockbuster DVD rental services, or simply try to find something to watch online, will understand the greater problems beyond linear-formatted TV. Search engines are helpful to the extent of locating pieces of content.

But trailers, sampling mechanisms, user recommendationsand recommendation engines and other sorts of processes are about the only way people can discover content they might enjoy.

Even in the walled garden, linear viewing world there are new efforts to aid the discovery process. ReelzChannel is a "media highlights" channel showing movie and TV clips, commentary and content-focused news.

The channel's research suggests its viewers purchase 24 percent more pay-per-view titles than non-viewers.

Also, in a recent study, 76 percent of users said they found out about a movie they had never heard of by watching the channel. About 21 percent watched a movie on premium services because of something they had seen on ReelzChannel. Another 16 percent ordered video-on-demand or pay-per-view titles, the company says.

Some 87 percent of those polled say ReelzChannel's “What2Watch“ promos were helpful when making a viewing decision.

Dead Company Watch

Azaire Networks, which sold a fixed mobile convergence security gateway product, has gone out of business, iLocus says. IPXstream/IPtelephony.org, a content and newsletter provider, also has gone under.

There always are periods of consolidation after big investment waves, and we are at the front of a winnowing process that already has claimed Pulvermedia and Verso.

Similar contraction cycles hit venture-funded CLEC and Internet firms between 2001 and 2003. Now it is VoIP's turn.

The next cycle, which will not begin for some time, is a similar weeding process for consumer-focused video start-ups.

O2 to Blanket UK with Broadband

O2 will extend its broadband coverage to the whole of the United Kingdom using BT's wholesale broadband network. O2 also seems to have earmarked a sizable amount--£6m (€7.7m)--to grab new customers.

O2 can do so because BT has created a separate business unit that sells wholesale broadband access to any retailer that wants to use it. The U.S. policy framework took a different route, and relies on vigorous competition between the local cable and telephone companies.

One might argue we'd see faster uptake, but less innovation using the functional separation model. Conversely, slower diffusion but more differentiation using the U.S. model. There are different benefits.

After a slower start, it looks as though access speeds and "price per megabit" propositions, plus managed services wrapped around the access, are finally starting to get interesting in the U.S. market.

Mobile TV: It Isn't About the Small Screen

Some observers might argue that most mobile users do not really want to watch TV on their handsets all that badly. Others might argue they'd like to, but the small screen or shortened battery life are barriers. Some would say the logical use is short form video to fill interstitial time, not long-form content or TV shows. Others will say people don't want to pay as much as carriers now charge.

All these objections have some merit. But what might be most significant is the limited amount of linear content people can get.

AT&T's new video service will deliver 10 television channels for a fee of $15 a month.

AT&T Mobile TV will be available in 58 markets including Atlanta, Chicago, Los Angeles and New York.

Two handsets are available immediately, the LG Vu, which sells for $299.99, and the Samsung Access, which sells for $199.99.

Observers often note that a typical TV viewer only watches about seven channels. The problem is that every person uses a different mix of seven channels. And that's the issue for AT&T and Verizon.

AT&T Mobile TV delivers CBS Mobile, Comedy Central, ESPN Mobile TV, Fox Mobile, MTV, NBC 2Go, NBC News 2Go, Nickelodeon, Sony Pictures and CNN Mobile Live.

As long as those channels cover enough of your seven favorites, you're going to be interested. If that list does not contain at least one of your favorites, you won't be that interested. And then any rational buyer is going to do a "cost per channel" analysis to figure out whether buying the mobile TV service makes sense.

And the end of the day, all the other objections likely can be overcome. The basic objection, though, is that people will want access to their favorite channels. That value proposition makes sense to 96 percent of all households.

What people won't want is to pay for is channels they don't really watch. Cable TV succeeded because it gave consumers more choice. Mobile TV today is lagging precisely because it doesn't provide enough choice.

Nokia, T-Mobile Enhance Mobile Web

Nokia and T-Mobile have signed a deal that has Nokia supplyng T-Mobile with phones especially tailored to provide easy access to T-Mobile’s “web’n’walk” internet service and Nokia’s mobile portal Ovi.

The two companies also saythey will work on making social network sites more mobile, and will cooperate on creating mobile widgets to create a “richer” user experience for T-Mobile’s web’n’walk service.

A couple of angles: Nokia supports its own content portal; T-Mobile, despite that possible conflict, needs Nokia to optimize handsets for web'n'walk. That's co-opetition, to be sure: competing and collaborating all at the same time.

Facebook Apps Skew Towards "Just for Fun"

Enterprise IT managers generally consider Facebook a huge time waster. They might be right. Most of the applications created for Facebook so far are of the playful sort, with no direct business application.

Still, there's more than a smattering of tools that can have business application, beyond the ability to create business-focused social groups.

There are more than a thousand apps self-described as business tools, and many of the others might be used in a business way.

Sure, it's a non-guided, messy process. But that's pretty much the way innovation is going to happen in any case.

It's just a process of discovery.

Lots of business-focused people are trying to figure out how to apply social networking in an enterprise context, so there is a clear sense that this is not all about "fun and games," even if that's where most of the apps are.