Pingo Launches Smartphone-Based Global Calling Service

Pingo, the prepaid international calling service from iBasis, now has released a smartphone application enabling simple international calling from a wide variety of smartphones, including the iPhone, Blackberry, Treo and phones using operating systems such as Nokia Symbian, Windows Mobile and Google Android.

"Pingo EZ Dial" automatically syncs with the mobile's address book, so dialing happens the way it always does, but the Pingo client recognizes that an international number is being called and routes the call using the Pingo network.

EZ Dial users don’t dial access numbers, PIN codes or change their calling behavior in any way and does not require users to connect to Wi-Fi. Users will consume domestic or local airtime minutes of use, but incur no global calling charges from their mobile provider.

Users go to the Pingo Web site (http://www.pingo.com) to sign up for a prepaid account. Users of iPhone devices can download the client for free from the Applie App Store. Users of other phones simply enter a phone number and Pingo sends out a text message with a hot link that initiates the over-the-air client download.

Pingo thinks the move is important since more calls are being initiated from mobile handsets these days, so more global calling also is being initiated from handsets.

Users with feature phones can get the same low rates, but will have to dial a local access number, since those phones cannot download the EZ Dial client.

All of that will change as Long Term Evolution or WiMAX networks become more ubiquitous, since all devices operating on those networks will be data devices able to download clients.

In many ways, the Pingo mobile calling capability is a reflection of the broader shift to mobile-originated and terminated calling. Pingo long has been a huge supplier of white label wholesale services to other retail providers, and most of those providers were wired network providers.

Since the U.S. market is by far one of the largest global markets in the world, mobile support is important for any company that makes a living from international voice traffic. Also, mobile origination is more important in the U.S. market, since the ratio of origination to termiantion is about three to one outbound compared to inbound, says Jayesh Patel, iBasis VP. "Most countries don't have that sort of  imbalance."

Recently, iBasis has noted more use of its calling plans by business users as well, so EZ Dial is offered in a business account version that allows easier administrative setup and call tracking.

Verizon Droid Launches Today

Verizon Wireless has launched two Android-powered smartphones Nov. 6, 2009. At the top, the much-anticipated Droid retails at $199.99 and is the first Android smartphone to feature the version 2.0 platform.

But Verizon also launched a second Droid-branded device, called Eris and manufactured by HTC. Eris will retail at $99.99.

A successful launch is regarded by many as critical to Motorola's future success, as the company attempts to regain market share.

Verizon also launched a number of other handsets, including the new BlackBerry Curve 8530 (already offered by Sprint), a new LG Chocolate device, and Samsung's Push-To-Talk Convoy.

Droid will the most-important launch, for several reasons. The success of its Android phones is crucial for Motorola if it is to climb back into the top ranks of handset manufacturers. It would be fair at this point to say Android is a "do or die" move for Motorola.

For HTC, the device is less important than the fact that HTC now is trying to build its own brand name, growing beyond its contract manufacturing roots.

People Don't Buy Smartphones, They Buy the Experience and the Feeling

All engineering involves choices, and that is true of all smartphone design as well.

Perhaps one of the background pressures is the desire to create devices that perform reasonably across a range of functions.

But that might not be a formula for success. A recent study by Interpret might suggest that instead of balancing features, it might be better to "unbalance" and produce a device that is demonstrably better at one thing.

Though one can argue we are early in the adoption cycle, a panel of consumers indicated that the Palm Pre made them feel "smart," "trendy, hop or cool," and "productive" within some range of acceptance for a smartphone device.

The problem would seem to be that Pre scores highest on the emotional attribute that users say is least important of the top three. The Pre produces emotions on the "hip" and "productive" scale that make it analogous to the BlackBerry Storm.

The bigger problem is that the Pre does not produce unusually high key emotions on any of the top three most important measures smartphone buyers say are important to them. BlackBerry and iPhone probably are the best models. Each of them scores unusually high on at least one of the three key emotional drivers smartphone buyers say motivate them.

So maybe designers should forget "balance." So far, no single smartphone unit scores unusually high on the "it makes me feel smart" measure. The iPhone owns the "hip, cool, trendy" space. The BlackBerry owns the "it makes me feel productive" niche.

Smartphones are bought because of the "feelings" they produce, not the features they provide. As the saying goes, smartphones "sell an experience."

Consumer Behavior in Recession was as Expected

Time Warner Cable's third quarter results provide a bit of concrete evidence that consumers did what they said they were going to as far as watching their spending on communications and entertainment services because of the recession.

Consumers said earlier in 2009 they were least likely to cut or reduce spending on Internet access and most likely to cut back on buying pay-per-view movies downloaded over the Internet, according to a new survey by Alcatel-Lucent. But mobile service, basic entertainment video service and telephone lines were among the items consumers said they were most likely to keep, though cutting back on things such as going to night clubs and concerts or going out to movies and restaurants.

All of those patterns would be in keeping with past consumer behavior in recessions.

(see http://ipcarrier.blogspot.com/2009/06/network-services-generally-safe-but.html, http://www.blogger.com/post-edit.g?blogID=7312392900566055630&postID=5497830666217750659)

Generally speaking, people said they would be keeping their broadband Internet, wireless and video entertainment services, though showing much more willingness to curtail adding new enhanced or premium services.

Some surveys suggested consumers would accelerate their abandonment of wired voice, while others suggested demand for fixed telephone services would hold up.

Time Warner Cable's results show that broadband Internet additions held up as expected, though sales of digital video, a premium upgrade, fell, as consumers suggested would be the case.

Time Warner's new voice customers also appear weak, though that bit of data does not necessarily confirm analyst expectations. Existing customers of other voice services might simply have stuck with their existing providers instead of switching to Time Warner Cable.

Overall net new additions tend to show the impact of consumer caution. The company added 117,000 revenue generating units in the third quarter, compared to 522,000 a year ago.

More to the point, Time Warner added 8,000 net new digital video customers, compared to 56,000 net new subscribers analysts were expecting. It added 62,000 net new voice customers where analysts had expected 107,000. The firm also added 117,000 broadband Internet access customers, where analysts had expected 115,000.

So broadband held up, while digital video activity fell, as did voice services.

Still, there are lots of variables to consider. Local market competitive conditions can sharply affect results, as do promotional activities.

Comcast, for example, saw its digital video customer base grow a net 7.4 percent, while adding 6.4 percent net new broadband customers and 20.3 percent voice customers.

Still, the point is that consumers had suggested, and history suggested, that wireless, broadband Internet and entertainment video growth rates would slow, but that the services themselves would hold up. It appears they did, at least for these two large cable operators. At&T and Verizon also added large numbers of wireless customers, as well as a decent number of video and broadband access customers.

Marketers Sell to Mobile Users, Not Subs

There are times when counting things one way, compared to a slightly different way, yield results that largely are the same. But for mobile marketers, counting mobile "subscribers" and "mobile users" will produce distinct results that do matter. 

The differences are that "subscriptions" are not equal to "users" because some users have multiple subscriptions. If you usse a mobile broadband card or dongle, plus two cell phones, you have three mobile subscriptions, for example. 

Mobile marketers want to reach people, not devices or subscriptions, so the method of counting makes a difference. In Europe, for example, many studies show mobile penetration to be at or in excess of 100 percent, but that is because many users have multiple subscriber information modules, each of which has a phone number, and counts as a subscription, even when only one SIM is in active use at any time. 

For marketers, the number of mobile users is a more useful figure because it more accurately describes the audience, and thus potential reach.

So how big is the actual U.S. mobile audience? Reserchers at eMarketer estimate that mobile penetration of users is 76.5 percent in 2009, or 235 million people,  rising gradually to 255.4 million in 2013, or 80 percent penetration.

By way of comparison, subscriber fgures from CTIA – The Wireless Association show there aer 276.61 million mobile subscriptions in service as of June 2009. That would work out to about 90 percent penetration of people. 

That 13-percent difference might not make a great deal of practical difference, except that the difference in estimates means the potential reach of any mobile marketing campaign might potentially reach 41.6 million fewer people. 

In the context of a mobile campaign that might not be so crucial, especially when marketers target one specific device or one specific carrier. But the difference in potential reach could be quite large for any campaign that tries to reach most users, and will certainly be reflected in the cost of any campaign. 

Droid Tethering in 2010

Though users apparently will not have the option immediately, Verizon Wireless says users of its Droid smartphones eventually will be able to use their Droids as a "dongle" to connect notebooks. The tethering capability apparently will cost an additional $15 to $50 a month above the normal data plan, depending on the usage plan any specific user already has, but will most often be an additional $30 a month.

The tethering feature will not be available until 2010, Verizon says.

Some end users are sure to complain about the additional fees, but Verizon Wireless has a sizable and growing business selling dongle access for notebooks and is understandably not anxious to cannibalize that business by allowing Droids and other smartphones to act as dongles.

Basically, the additional $30 fee makes the Droid a dongle as used with Verizon's "Mobile Broadband" service, costing $40 a month if all a user expects to use is 250 MBytes or less. The $60 monthly plan includes 5 Gbytes of usage.

Every user will have to figure out how much data they actually need to use in a month, but the tethering option will provide value for most users who need a Droid data plan and some amount of mobile broadband access for their netbooks or notebooks. If you need to use both your smartphone and your PC for Internet access parts of every month, and your combined usage from both devices does not exceed 5 Gbytes a month, that access, using tethering, costs $60 a month.

Separately, the 5 Gbyte plan and Droid data plan would cost $90 a month. On the other hand, separate data plans also means separate buckets of usage, so the value of one's choices depends on how much total usage one expects to require in a typical month.

Under most circumstances, a consumer user will find a single 5-Gbyte mobile bucket is reasonable for tethered and smartphone use. Traveling business users, expecting to use the Droid as a dongle for work purposes every month, might not find the tethering option quite so workable.

Consumers who really watch a lot of video on their PCs and mobiles will need to be quite careful about the tethering option. In that case an unlimited smartphone data plan likely is best.

Wi-Fi's Business Model: Not What Was Expected

New technologies sometimes wind up being used in ways not originally envisioned. It might sound odd today, but there was a time when public Wi-Fi was seen by some as a replacement for fixed broadband used by residential customers, or as a competitor to wireless 3G networks.

These days, with a couple of notable exceptions, public Wi-Fi lives by indirect revenue models. It is an amenity for retail or hospitality operations that make money some other way. Coffee, food, lodging or memberships are some of the revenue models.

The notable exception is "for fee" Wi-Fi in global markets where the cost of 3G access is very high, making a for-fee Wi-Fi connection a better deal.

In recent years, the typical revenue model for public Wi-Fi has been that it is a valuable amenity for sales of fixed broadband connections and retention of customers. More recently, public Wi-Fi has become an important component of the value of some smartphones, which can use hotspots for VoIP even when it is not allowed on the 3G networks.

AT&T, for example, says that its customers made 25.4 million Wi-Fi connections in the third quarter of 2009, exceeding the 20 million connections made in all of 2008 and nearly equaling the 25.6 million connections made in the first half of 2009.

Wi-Fi usage has been increasing significantly each quarter, up from 5.2 million connections in the third quarter of 2008. Smartphones and other Wi-Fi enabled devices are the reason, AT&T says.

For the first time, the number of Wi-Fi connections made by smartphones and other mobile devices in the third quarter surpassed connections from laptops, AT&T notes.

About 60 percent of all AT&T Wi-Fi connections were made from mobile devices, up from 49 percent in the second quarter of 2009, AT&T says.

Public Wi-Fi seems destined to play a bigger role in the smartphone market going forward, as it is a great way to offload video and other bandwidth-intensive applications from the mobile network to the fixed network.

So aside from its value as a feature that supports an indirect revenue model for retailers, it is a value-enhancing way for service providers to differentiate and add value to their mobile and fixed broadband services.

In the future, it likely will assume a greater role in allowing mobile networks to better manage bandwidth. None of those initially were thought of as the "value" of public Wi-Fi.