Healthcare Plan to Cost AT&T $1 Billion

AT&T says it is taking a $1 billion charge for the first quarter of 2010 to account for increases in its costs because of the new health care plan. It isn't clear what the on-going hit to earnings might be.


AT&T says it also will also evaluate changes to its health care benefits for employees and retirees, to avoid paying such charges in the future, of course. 

Nexus One Outsells iPhone in February...Sort of

Sales of the Google Nexus One are now on the rise and beat the iPhone by 16 percent in February 2010, says RCS Limited, which expects the trend to continue. That data, based on U.K. results, contrasts with sales in the United States, where initial sales have been modest.

It isn't clear that the statistic means a whole heck of a lot, though. Sales practices are quite different in the U.S. market, compared to others where devices often are bought "unlocked" and at full retail prices. Since most U.S. iPhones are bought at subsidized prices, while many to most Nexus One devices are bought at full retail price, the sales comparisons are difficult. Any expensive device sold primarily "unlocked and at full retail" is going to have low sales volume in the U.S. mobile market.

Also, the Nexus One has been viewed by many as a "demonstration" project whose real objective is to show what can be done when Android open-source software and hardware are tightly integrated.

According to a report by Flurry, Google sold roughly 135,000 of its new Nexus One phones in its first 74 days on the market. By contrast, Apple sold 1 million of the original iPhones in the first 74 days, while Motorola sold 1.05 million Droid phones -- which are based on Google's Android software -- during the same timeframe.

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U.S. to Lead in 4G Deployment? Does it Matter?

People sometimes are fixated on global rankings that have marginal importance, such as which country has the highest penetration of mobility, broadband, Internet usage or some similar metric. Aside from methodological issues that make such rankings difficult, it isn't clear that such rankings mean much of anything.

Consider the fact that the United States will have around 20 million Long Term Evolution subscriptions by end of 2012, and an additional six million mobile WiMAX subs, which would represent close to 25 percent of the global total of 4G subscriptions, says Strategy Analytics.  That would, by anybody's estimation, make the United States a "leader" in 4G adoption. But it isn't clear that particular distinction means much, by itself.

In times past the United States has been called a "laggard" in mobile phone penetration, "behind" other nations in use of text messaging and now is called by some a middling country in terms of broadband penetration. But the United States appears on track to become "the leading battleground" for 4G mobile services, says Susan Welsh de Grimaldo, Strategy Analytics director.

"With broad commitments to LTE and WiMAX service launches, US operators will speed up the competition and create one of the most influential markets for new mobile broadband services and devices," she says.

The point is that cross-national comparisons are difficult, and often of questionable value. The U.S. market no longer is "behind" in text messaging or mobile adoption in any meaningful way. And while one always can argue average or typical speeds are not the fastest in the world, most countries that are "ahead" on such measures are very-small countries with high population density, which makes construction far easier than is the case for a continent-sized country with lower density.

Nor will it mean quite so much to say the United States will "lead" in 4G, either. Lagging broadband metrics do not seem to have inpaired U.S. leadership in software and Internet development, for example.

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Bharti Airtel Introduces Mobile Bazaar

Can text messaging be used to create a mobile version of eBay in India? Bharti Airtel intends to find out, by introducing "Mobile Bazaar," a way to buy and sell virtually anything that is legal using a standard mobile phone capable of text messaging.

The SMS-based service enables buyers and sellers to find each other and conduct transactions with each other using only text messaging, especially short codes, with no need for a mobile browser or data connection.

For starters, Bharti has set up a community for trading mobile phone devices, and will create similar communities for real estate, automobiles and electronics.

The initiative is interesting for the same reason many such innovations are throughout much of the world. Though mobile broadband will be a more-logical approach in markets such as the United States, there are many markets where text messaging and voice are the two ubiquitous communication modes.

In many places, a simple text message in the morning can give a farmer what he or she needs to know before settingout on a seven-mile walk to market. That's very valuable, in terms of fostering economic development.

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Sprint and Clearwire Might Go LTE for 4G

Sprint Nextel and Clearwire executives have said for some time that WiMAX and Long Term Evolution are similar enough that Clearwire could switch to LTE at some point. But that is more likely to happen when another technology migration to "fifth-generation" technology happens, not in the fourth generation.

In one respect, battles over air interface are simply part of the mobility business. Just as AT&T and T-Mobile opted for the GSM air interface while Sprint and Verizon opted for the rival CDMA air interface, and similar battles were fought over 2G standards, carriers will have to migrate their platforms over time, just as they always have.

The evolution from GSM (3G) to LTE (4G) will still require a new network, with a new air interface, operating on discrete spectrum and requiring new handsets and software. For that reason, each technology generation requires a fork lift upgrade and a refresh of consumer terminals as well. That's just part of the business.

So though Clearwire and Sprint chose WiMAX for 4G, their options for 5G remain open, and both Dan Hesse, Sprint CEO, and Bill Morrow, Clearwire CEO, say they could opt for an LTE derivative for 5G.

Hesse says the choice of WiMAX was based on the fact that Sprint could not wait for LTE standards to jell. It had a business need to move, so it did. "WiMax was tried-and-true tested technology at the time we made the choice," he says. "We couldn't wait."

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AT&T Microcell Launch in April

AT&T will begin its national roll out of femtocells, which it brands as the AT&T 3G MicroCell" beginning in mid-April, with new markets activating in cities across the continental U.S. for the next several months.

The AT&T 3G MicroCell improves in-building reception for mobile devices by creating a local mobile repeater site, like a Wi-Fi connection does. The femtocell uses the home broadband connection for access, offloading mobile traffic to the fixed broadband network and therefore avoiding any reception problems in the home or building.

Developed in conjunction with Cisco and in a public trial in select markets since September, AT&T 3G MicroCell is available for a one-time cost of $149.99.

Consumers with AT&T 3G MicroCell will be able to easily activate the device the same day it is purchased.  Customers may define up to 10 mobile phone numbers that can use the femtocell and up to four devices can operate on it simultaneously. There is no recurring cost, but mobile minutes will be deducted from a user's account as they would be if on a mobile macro-cell.

Customers on "Family Talk" plans can pay an additional $19.99 a month to make unlimited calls from the Microcell, without deducting any minutes from their plans.

Consumers who select 3G MicroCell calling plans at purchase are also eligible to receive a $100 mail-in-rebate toward the purchase of AT&T 3G MicroCell. Customers who also purchase a new line of broadband service with AT&T (DSL or U-verse 1.5MB or higher) are also eligible for $50 rebate.

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In 2 Years, Mobile Bills Will be Based on Data, Not Voice Buckets

Sprint Nextel Chief Executive Dan Hesse said that in about two years, monthly mobile phone bills will focus on the amount of data used and move away from the number of available voice minutes.

Of course they will. The entire global telecom business is migrating from a voice revenues model to a broadband revenue model. Along the way, some voice services or applications will be offered at no incremental cost, or very-small amounts of money. In other cases access to voice services will simply be bundled with other features and services, much as one today can buy, for one flat price, unlimited mobile Web access, text messaging and voice.

That doesn't mean data usage will billed as electricity, water or natural gas are. It does mean retail packaging will shift, over time, to methods that emphasize "access" to a network and many services, rather than a simple metered approach.

Observers rightly note that most U.S. consumers do not like strictly-metered usage for the simple reason that it creates billing variability. Consumers prefer the predictability of fixed monthly charges, which accounts for some of the popularity of "buckets of usage." But that doesn't necessarily mean people object to some broad correlation between intensity of usage and the size of monthly bills.

Hesse's comments also reflect the simple reality that, for many people, voice is less important compared to texting, instant messaging and other things that can be done with a mobile device. Hesse is only saying that end user value should be related in some rather obvious way to retail pricing.

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