T-Mobile USA Launches Unlimited Prepaid Offer

Given the relative strength of prepaid wireless, and a renewed spate of competition in the segment, it might not be too surprising that T-Mobile USA has launched a new unlimited mobile plan available to customers who do not like contracts.

What might have been disruptive is an extension of such plans to all postpaid customers as well, a move that might have sparked yet another round of price cuts in the postpaid business. But it was a move T-Mobile USA chose not to take.

The new plan offers unlimited talk, text and Web surfing for $79.99 a month to customers who do not want to sign up for a long-term contract, which typically lasts two years.

It will also offer a $50 per month unlimited service for non-contract customers that only want access to voice calls, not text messaging or Web access.

By some measures, the new deal represents a 20 percent discount on T-Mobile's standard unlimited monthly fee for contract customers.

Nobody knows what might have happened had T-Mobile USA launched a $50 per month unlimited voice and data service plan for all customers, but an immediate price war is one likely outcome.

As matters stand, that is unlikely to happen. On its third quarter earnings call, Verizon said Verizon Wireless was unlikely to respond to T-Mobile USA's new offer with a similar one of its own.

That is unsurprising given Verizon's general stance on prepaid, which is that it remains a niche tough to square with Verizon's historic focus on higher-end postpaid customers.

Prepaid accounted for 80 percent of U.S. subscriber growth in the first quarter of 2009, though growth has moderated since then.

Sprint subsidiary Boost Mobile launched a $50 monthly plan in January 2009 and has been matched by the other leading prepaid providers.

On Demand TV "Not So Everywhere"

Comcast Cable subscribers will be able to watch popular cable television series such as HBO's "Entourage" and AMC's "Mad Men" on your computer by the end of the year without paying extra — as long as you're a Comcast Corp. subscriber watching at home.

The initiative is a starting point for Comcast, which hopes to eventually offer what some call "TV Everywhere" service: linear video programming on demand, over any broadband network.

Comcast, wanting to make sure the shows will remain off-limits to non-subscribers, apparently still is working on providing access over competing home broadband systems as well as on the go — at work, on laptops and, one day, over cell phones.

Comcast will be the first cable TV operator to unlock online access to a many cable shows and movies, aiming to replicate what's available on television through video on demand.

Comcast subscribers can initially watch shows and movies only on their home computers after being verified by the cable system. And for now, the online viewing will be restricted to those who also get Internet service through Comcast, and not on any broadband connection.

That might be helpful for Comcast consumers watching on-demand fare at home. It will not be so helpful if those customers would prefer to watch on their mobiles or any other broadband connection.

But it is a start.

Net Neutality: What Verizon and Google Can Agree On

Though there are many issues upon which Verizon and Google disagree, both companies say they agree on some elements of network neutrality.

"For starters we both think it's essential that the Internet remains an unrestricted and open platform. where people can access any content (so long as it's legal), as well as the services and applications of their choice," say Lowell McAdam, CEO Verizon Wireless and Eric Schmidt, CEO Google.

That should come as no surprise. Those rules already are part of the Federal Communications Commission "Internet Freedoms" principles.

Both executives say the current debate about network neutrality is about the best way to "protect and promote the openness of the Internet."

Both executives say "it's obvious that users should continue to have the final say about their web experience, from the networks and software they use, to the hardware they plug in to the Internet and the services they access online."

"Second, advanced and open networks are essential to the future development of the Web," McAdam and Schmidt say. "Policies that continue to provide incentives for investment and innovation are a vital part of the debate we are now beginning."

"The FCC's existing wireline broadband principles make clear that users are in charge of all aspects of their Internet experience--from access to apps and content, so we think it makes sense for the
Commission to establish that these existing principles are enforceable, and implement them on a case-by-case basis," McAdam and Schmidt say.

"We're in wild agreement that in this rapidly changing Internet ecosystem, flexibility in government policy is key," they emphasize. "Policymakers sometimes fall prey to the temptation to write overly detailed rules, attempting to predict every possible scenario and address every possible concern," and that
"can have unintended consequences."

Both executives say "broadband network providers should have the flexibility to manage their networks to deal with issues like traffic congestion, spam, "malware" and denial of service attacks, as well as other threats that may emerge in the future, so long as they do it reasonably, consistent with their customers' preferences, and don't unreasonably discriminate in ways that either harm users or are anti-competitive."

"They should also be free to offer managed network services, such as IP television," both men say.

"While Verizon supports openness across its networks, it believes that there is no evidence of a problem today -- especially for wireless -- and no basis for new rules and that regulation in the US could have a detrimental effect globally," they say. "While Google supports light touch regulation, it believes that safeguards are needed to combat the incentives for carriers to pick winners and losers online."

That isn't to say the two firms have identical interests or views. But as we have seen in prior discussions about net neutrality, there is more room for compromise than sometimes seems to be the case. That undoubtedly will be the case this time around, as well.

Mobile Social Networkers Do More of Everything

“Do we have to build a social network on our own or do we have to invest in an existing one?" asks France Telecom CEO Didier Lombard. "We haven’t decided yet.”

The question itself provides a clue to the growing importance social computing and networking holds for mobile service providers. To be sure, we are at the beginning of a convergence between mobile behavior and social application behavior.

On average, only about seven percent of 16- to 24-year-olds already access social networking sites from their mobile phones, says Forrester Research analyst Thomas Husson.

But that is going to change.  In the United Kingdom, up to 40 percent of 16- to 24-year-olds are already using or are interested in accessing social networking sites from their mobile phones, says Husson.

In addition to accessing social network updates, social computing apps include media-sharing, such as viewing and sharing photos or videos taken from their mobile phones or use microblogging services.

Three percent of European mobile phone owners access blogs from their mobile phones, either to view them, comment on them, or publish them; the same percentage read or post customer reviews and ratings, Husson says.

Five percent of all European mobile phone owners upload photos to the Web straight from their mobile phones, while nine percent of 16- to 24-year-old mobile phone owners do so.

But mobile social networking is growing fast. About 65 million people are now actively using Facebook Mobile, for example, more than tripling its audience in eight months.

Handset manufacturers and mobile service providers also are becoming more active in the mobile social networking arena.

Handset manufacturers are actively partnering with social networking sites to integrate access with specific handsets, making social networking as easy as making a call or sending a text message.

Service operators also are forging their own partnerships for many of the same reasons. Consumers who access social networking sites using mobile phones are heavy users of communication services.

Where 34 percent of mobile users say they use text messaging "every day," about 76 percent of mobile social networkers say they do so. Where two percent of mobile users say they access email every day, about 23 percent of mobile social networkers do so.

Where two percent of mobile users say they use mobile instant messaging every day, abour 12 percent of mobile social networkers do so.

So mobile service operators are aggregating social networks, allowing users to get, and make, all their updates from a single operator portal, for example.

"Location" is one reason the mobile social Web is seen as increasingly important. When a user's device knows knows "where you are, where your friends are, and what they are doing," social networking becomes more valuable.

Location is by at the very heart of a mobile phone’s value, and Forrester believes that location as a service will become a core enabler of mobile activities in the future.

Location will progressively become a component of social communications as consumers share their location, geo-tagged photos, and comments, helping them explore places and events that their friends recommend.

New technologies also will facilitate the connection between physical and online worlds. For example, consumers will be able to point their camera phone at a product, read reviews from peers, glance at ratings, look up information, and even find the closest store that sells it.

The key insight is that the mobile phone is not simply an extension of the PC-based Internet. That is why a great percentage of mobile broadband access (to support handset applications) is supplemental to, and not a replacement for, fixed broadband access.

Forrester expects 39 percent of European mobile users to adopt the mobile Internet by 2014. And at least initially, mobile service providers will be among the biggest winners, based on sales of new mobile data plans, Husson argues.

Though service providers worry their text messaging revenues will be cannibalized by social network posts, Husson thinks that is unlikely.

Service providers also are likely to benefit in the form of reduced churn if they are able to create the most compelling user experiences.

Advertising, premium content and payment services also are other likely revenue streams. In the future, wiring money to one's social mobile contacts using a mobile phone could be very convenient, for example.

Aggregation and synchronization of social network and other key address books with location information in real time are likely to become important ways mobile service providers create value.

Kindle Connections Now Go to AT&T

In a business with true scale and scope economies, ownership of a global network can be a key advantage. Consider network support for the Amazon Kindle book readers, which now are sold internationally.

The U.S. version of the Kindle 2 has used the Sprint 3G network. But both international and U.S. versions will henceforth use the AT&T network globally. Existing U.S. Kindle owners will continue to use Sprint, but all new devices will be powered by the AT&T network.

Of course, there are other ebook readers. Barnes & Nobles sells the Nook, Sony sells the Daily Edition and Plastic Logic sells the Que. All of those readers use AT&T's network.

Verizon will provide service for the upcoming iRex e-reader.

The financial impact to Sprint might be a relatively minor issue. Sanford Bernstein analyst Craig Moffett estimates the Kindle will drive one million Kindle users a year to AT&T that Sprint would otherwise have gotten.

Moffett estimates that Sprint makes about $5 for each subscriber addition and $2 per every e-book downloaded onto Kindle over its networks, according to Business Week writer Olga Kharif.

The real issue is whether other upcoming devices and services have enough of a global angle, and enough sales volume, that providers such as Sprint are unable to compete in those new lines of business as well.

How Long Will 40 Gbps, 100 Gbps Networks Last?

The problem with networks is that they do not last as long as they used to, which means they need to be upgraded more frequently, which also means the ability to raise capital to upgrade the networks is a bigger issue than it once was.

Qwest CTO Pieter Poll, for example, notes that Qwest's bandwidth growth now is 45 percent growth compounded annually, or nearly doubling every two years or so. That in itself is not the big problem, though. The issue is that consumers driving most of that new consumption do not expect to pay more for that consumption increase.

"From my perspective, the industry really needs to focus on tracking down cost per bit at the same rate, otherwise you'll have an equation that's just not going to compute," says Poll. Whether on the capital investment or operating cost fronts, adjustments will have to be made, one concludes.

Still, raw bandwidth increases are not insignificant. "If you look at 2008 for us it was unprecedented in terms of the work we did in the backbone," says John Donovan, AT&T CTO. "The capacity we carried in 2008, five years out, will be a rounding error.

Donovan notes that AT&T's 2 Gbps backbone lasted 7 years, the10 Gbps backbone lasted five years, while the 40 gigabit will last three years.

By historical example, one wonders whether 100-Gbps networks might last as little as two years before requring upgrades.

Donovan suggests carriers will have to rethink how they design networks, how routing is done and how content bits get moved around. One suspects there might be more use of regional or local caches, to avoid having so many bits traverse the entire backbone network.

25% of Business Apps to be Created by Amateurs, Gartner Says

By 2014, citizen developers will build at least 25 percent of new business applications, according to Gartner analysts. If that is shocking, consider the amount of Web content now freely contributed to Wikipedia or many of your favorite blogs, microblogging sites and YouTube.

Gartner defines a citizen developer as a user operating outside of the scope of enterprise IT and its governance that creates new business applications for consumption by others either from scratch or by composition.

"Future citizen-developed applications will leverage IT investments below the surface, allowing IT to focus on deeper architectural concerns, while end users focus on wiring together services into business processes and workflows," says Eric Knipp, Gartner senior research analyst.

Better technology has also lowered the bar for becoming a developer, while at the same time, users have become less intimidated by technology, empowering citizen developers to do more than they ever could before, Knipp says. Y

"The bottom line lies in encouraging citizen developers to take on application development projects that free IT resources to work on more complex problems," Knipp says.

"Citizen development skills are suited for creating situational and departmental applications like the ones often created in Excel or Access today," he says.