Deutsche Telekom has no Plan B for T-Mobile USA

Deutsche Telekom executives appear to have so completely sure the AT&T purchase of T-Mobile USA would be approved that there is no "plan B." That will probably strike some observers as management irresponsibility. Should the deal collapse, as a growing number of observers believe is a real possibility, T-Mobile USA might face unpleasant options.

Strategically, T-Mobile USA is a segment "no man's land," some would argue. It cannot compete with the industry's true "value" providers, nor with AT&T and Verizon Wireless for the "premium" customer. T-Mobile USA continues to face a difficult challenge in the fourth generation network area, as it needs lots of spectrum it does not own.

T-Mobile USA therefore faces a real need to invest billions of dollars it cannot spare, in a U.S. business with challenging prospects.

Beyond that, there could be repercussions for Deutsche Telekom in a broader sense. The firm had been counting on using the proceeds from the T-Mobile USA sale to fund strategic initiatives elsewhere. Now all that remains "on hold."

Deutsche Telekom Has No Plan B

Slightly More Online Video Viewing in 2011

People are spending slightly less time watching scheduled broadcast TV, and that they are spending more time watching streamed on-demand TV online, says Ericsson.

For observers anxiously awaiting any new signs of an inflection point in online video, that inflection point still hasn't occurred.

More than 44 percent of respondents surveyed on behalf of Ericsson reported watching Internet-based on-demand TV more than once per week, while about 80 percent watch broadcast TV more than once per week.

Data was collected in Australia, Austria, Brazil, China, Germany, the Netherlands, Russia, Spain, Sweden, Taiwan, the UK, the US and South Korea. In all, 22 qualitative and 13,000 quantitative interviews were conducted representing almost 400 million consumers.

The study also shows that social media usage has impacted the way we watch TV. More than 40 percent of the respondents reported using social media on various devices such as smartphones and tablets while watching TV.

Slightly More Online Video Viewing in 2011, says Ericsson

Small Businesses Use Social Networks for Promotion

Some 48 percent of small businesses surveyd by BIA/Kelsey say they are using Facebook for advertising or promoting their business. Among those surveyed, 40 percent said they have a Facebook page specifically for their business.

Some 25 percent also report using other social networks, 22 percent use a blog and 19 percent use Twitter to promote their business.

Small and Local Businesses Use Social Advertising

PCs Have Changed in 30 Years

via

And these are just some of the changes for desktop machines. For most users, the equally-important changes are computing in e-reader, tablet, smart phone and game console form factors.

Mobile App Ad Inventory Hits Inflection Point

Inflection points are important, representing the point at which some activity, behavior or trend dramatically changes its growth rate and adoption pattern. It appears mobile app ad inventory has reached that point.

U.S. mobile application inventory is not only growing at a staggering rate, but also poised to absorb the equivalent of the entire U.S. Internet display advertising spend by the end of this year, according to Flurry.

That could have some interesting implications. Exploding inventory generally leads to significantly lower prices. And that could have implications across the online and mobile ad market, not just within the mobile app business.

Observers have pointed out, repeatedly, that advertiser spend on mobile and online advertising significantly lags end user engagement with various forms of media. The explosion of mobile app inventory is likely to momentarily make that situation worse.

Another way to look at this is that, in approximately two years, mobile app inventory is growing so aggressively that it could easily meet the demand of a mature, 15-year-old form of online advertising (display ads). 

Flurry's analysis shows that, for the first time ever, daily time spent in mobile apps surpasses desktop and mobile web consumption. This stat is even more remarkable if you consider that it took less than three years for native mobile apps to achieve this level of usage.

Growing at 91 percent over the last year, users now spend over 81 minutes on mobile applications per day. This growth has come primarily from more sessions per user, per day rather than a large growth in average session lengths. Time spent on the Internet has grown at a much slower rate, 16 percent over the last year, with users now spending 74 minutes on the Internet a day.

Flurry found that the average user now spends nine percent more time using mobile apps than the Internet. That was not the case just 12 months ago. In 2010, the average user spent just under 43 minutes a day using mobile applications versus an average 64 minutes using the Internet.

Mobile app inventory explodes

Have AT&T and Verizon Reached the Limits of Their Subscriber Market Share Gains?

In any mature market, there comes a point where the biggest players simply are not allowed to get any bigger. That might be the case for the U.S. mobile industry, in the wake of the U.S. Department of Justice decision to sue to block the deal.

It isn't just that the DoJ opposition suggests a view that this deal would be anti-competitive in a serious way; it might also suggest that other mergers, such as Sprint with T-Mobile USA, or Verizon Wireless with Sprint, might also fail to be approved.

AT&T reportedly will offer concessions in an attempt to settle the matter before it goes to court, probably by offering divestitures of subscribers and spectrum representing perhaps 25 percent of T-Mobile USA assets, in the areas of subscribers and spectrum. The issue is whether any of that will matter, if the real issue is the fact that both AT&T and Verizon Wireless are beyond the levels of market power economists and regulators often use to measure market concentration.

One of the ways to measure market concentration is the Heffindahl-Hirshman Index or HHI, often used as a measure of market concentration. The HHI is the square of the percentage market share of each firm summed over the largest 50 firms in a market. Here is the pre-merger market HHI which already suggests that the market is not competitive. HHI is the problem

Department of Justice Acting Assistant Attorney General Sharis A. Pozen says “the conclusion we reached was clear: any way you look at this transaction, it is anti-competitive.”

“T-Mobile has been an important source of competition among the national carriers through innovation and quality enhancements,” Pozen says. “Unless this merger is blocked, competition and innovation in the mobile wireless market, in the form of low prices and innovative wireless handsets, operating systems, and calling plans, will be diminished and consumers will suffer.”

A combination of AT&T and T-Mobile would reduce the number of nationwide competitors in the marketplace from four to three, and the DoJ appears to believe that is anti-competitive, at least this particular pairing.

Have AT&T and Verizon Reached the Limits of Their Subscriber Market Share Gains?

How Journalists use the Internet to Find Story Ideas

Much of content marketing is about the use of content in an owned media setting. But much still remains in the earned media domain. So where do journalists go to find story ideas on the Web? Arketi Group says almost half of all journalists surveyed say they blog or read blogs regularly. One wonders why the percentage is even that low.

Business-to-business media continue to have a healthy appetite for social media tools, as well. Some 92 percent of journalists have a LinkedIn account, an increase from 85 percent in 2009. In addition to LinkedIn, 85 percent of journalists are on Facebook (up from 55 percent in 2009) and 84 percent use Twitter (24 percent in 2009). How journalists use the Web

It comes as no surprise that more BtoB journalists are participating in social media sites, especially LinkedIn. Journalists are constantly seeking industry sources for story ideas and LinkedIn provides an online outlet for them to research and connect with potential source Earned media: use LinkedIn and Facebook

The survey shows that 92 percent of the survey respondents are on LinkedIn while less than half have a blog site.

So where do story ideas come from?  While most get story ideas from industry sources, 39 percent of respondents come up with articles from social networking sites, like Facebook or LinkedIn.

That is one reason brands that seek earned media exposure should figure out how to use LinkedIn and Facebook. How journalists use the Web