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.