Sprint Will Get, Can Make Money on LTE iPhones, Analyst Says

There is some disagreement in some quarters about how well Sprint will fare, financially, as it steps up support for the Apple iPhone. Guggenheim Securities’s Shing Yin thinks Sprint will get rights to sell an Long Term Evolution version of the iPhone, and also expects the deal will not prove burdensome. 


Bernstein Research’s Craig Moffett, on the other hand, cut his rating on Sprint to "sell," based on a fear an LTE iPhone could increase prospects for bankruptcy at Sprint. 


Yin doesn't think that will prove to be a problem. He argues that Sprint would never have agreed to an expensive “take or pay” contract with Apple to buy millions of devices, unless Sprint knew it would get rights to sell the LTE version, he argues. Sprint Can Handle an LTE iPhone

Mobile Click-Throughs Keep Growing, Now will Conversions Do the Same?

Mobile click-throughs from paid search are up on mobile devices, but apparently not conversions, according to an analysis by Marin Software. 


In 2011, advertisers grew their share of search budget on mobile devices from 3.4 percent to 8.7 percent. Marin Software expects that, by December 2012, mobile devices will account for 25 percent of all paid-search clicks and 23 percent of search budgets. 


During the same period, tablets may account for 45 percent of all mobile paid-search clicks in the United States. 
Smartphones and Tablets Changing Paid Search

Why "Telecommuting Died 15 Years Ago"

We sometimes think technology adoption is mostly about how attractive the new technology is, and what it does for the people who use it. As it turns out, that often is not the case. Sometimes, other societal forces can scuttle even a technology that offers demonstrable benefits. 


Honestly, it had not occurred to me that so much about "telecommuting," from an enterprise perspective, had such hurdles to face. 

This story about telecommuting adoption frankly was an eye opener. 

Family Plans Drive Mobile Service Provider ARPU, Churn Trends

Family plans arguably are the single most important driver of North American mobile service provider average revenue per user (or "unit") as well as customer churn. In coming years, it would be reasonable to expect family plans to drive adoption of mobile broadband subscriptions as well, both directly and indirectly. 


The reason is simply that, on average, 46 percent of subscribers are on family plans in 2011, compared with 48 percent in 2009, according to a new survey conducted by PwC. The dip in family plan subscribers might be attributed to a growing percentage of consumers signed up on prepaid plans, which offer lower recurring prices, but typically do not allow use of "family plans."



The direct impact will come as family data plans convince more users that smart phones now makes sense, and are affordable. The indirect impact will flow from the incentives family plans provide to use more data-capable devices, more often.


Family plans historically were important because they drove mobile services in the “teenager” market, the last remaining untapped demographic once adult adoption had nearly saturated. These days, family plans are a major contributor to retention. 


In the next evolution, family plans likely will play a key role in getting consumers to use mobile broadband for their tablet devices.
While family plans can be a slight drag on average revenue per user, they are an effective means of deterring churn since they require the conversion of an entire set of devices and customers in order to effect a change.

“We also believe that family plans may also yield significant secondary benefits, particularly in terms of lower rates of bad debt and reduced per-user customer care costs,” PwC says in its report.

So far, fewer than 30 percent of responding companies include the use of wireless cards, wireless data dongles, or embedded devices such as tablets as part of postpaid family plans, but PwC thinks that will change.  

As carriers begin to offer more incentives for multi-device data plans that resemble the existing voice and messaging buckets of service, PwC expects the percentage of users on family plans to increase in 2012.

About 44 percent of the survey respondents said average revenue per family plan subscriber ranged from $51 to $60. In the 2010 survey, 50 percent of respondents cited an average revenue range from $51 to $60 for family plan accounts.

That suggests overall family plan revenue is declining. But it is possible, perhaps even likely, that family data plans will reverse the trend, even as more “lighter users” are added to such family plans.

In general, family plans still appear to be an effective way to increase the length of subscriber relationships and reduce churn, as churn continues to trend down for family plan customers.

The PwC survey results reflect the participation of eight US companies, including three of the four largest wireless operators by revenue and subscriber base, as well as four major Canadian wireless companies, including the three largest. 

Tablets Invade Prime Time TV Viewing Hours

Ooyala data now suggests that people are watching more shows, movies and other videos on their iPads during prime-time TV hours, a behavior that at one time would have defaulted to PCs.

"Our data suggests that explosive tablet sales (fueled largely by Apple’s iPad) will increase the share of tablet video viewing by over 500 percent in the next year alone," says Jay Fulcher, Ooyala CEO.

About a third of daily video plays occur between 7PM and 11PM, hours that could otherwise be spent in front of cable TV or out at the local movie theater, Ooyala says.

In fact, Americans are now watching more online movies than DVD content, Ooyala suggests.

"Tethering" and "Multi-Device" Mobile Plans

"Tethering," the ability to use a mobile device such as a smart phone to then share access with one or more other devices has been a contentious issue. Though supported as a native function on Android devices, tethering often is disabled by mobile service providers anxious to sell one more feature.

Consumers or industry observers sometimes object that this amounts to charging a customer more than once for something they've already bought, a point of view that also has been raised with respect to use of mobile VoIP.

That particular objection someday will be obviated, though, as mobile service providers introduce multi-device mobile data plans that allow a single account to share a single usage bucket across a range of devices supported on a specific account.

In some ways, service providers already are moving to make the argument moot. As more mobile service plans include a specific usage cap, it will matter less how any particular data plan is used. At some level, it matters not whether a 2-Gbyte bucket of usage attached to a single account is used directly by a smart phone or by a tablet that uses a Wi-Fi personal hot spot feature of that device. Either way, the usage is paid for.

Some might argue the growing base of 4G-equipped tablets will be activated for such use on a widespread basis only after multi-device plans are created.

According to industry analyst Chetan Sharma, about 90 percent of tablets sold in the United States towards the end of 2011 were Wi-Fi only. Even most units capable of using a mobile broadband account likely were not used in that way, most end users preferring to rely on simple tethering or available Wi-Fi access instead.

A multiple-device data plan, similar to a shared bucket of voice minutes or text messages, usable by a number of devices on a single account, will change the economics, though. At that point, the perceived cost penalty (one more dedicated mobile data account) will recede.

European Mobile Operators are Cutting Smart Phone Subsidies

European mobile service providers in several European markets are looking to reduce the high level of subsidies they currently offer to new and upgrading smart phone customers.


In Spain, Vodafone appears to be ending the practice of subsidizing smart phones for new customers, following a similar announcement by market-leader Movistar (Telefonica) earlier in the month.


Vodafone Spain plans to offer free finance programs for the purchase of new handsets and introduce a scheme to buy back old phones from upgrading customers.


Operating costs are the clear reason for clipping the subsidies. When a service provider subsidizes a $600 device to the tune of perhaps $400, it essentially is making a loan to the subscriber until the full amount is recovered.


What remains to be seen is the impact of subsidy changes on the rate of innovation in handsets and applications, if, as some would suspect, the end of subsidies slows down the rate at which consumers replace their handsets, and might reduce the rate at which they buy some of the more-powerful and latest devices.


There is some evidence to that effect.