Voyager Mobile: $19 a Month Mobile Service Leans on Wi-Fi

Voyager Mobile, a new mobile virtual network operator using wholesale Sprint facilities, is going to test the notion that outsourcing virtually everything but sales and marketing will allow it to build a profitable business selling basic voice and texting service at $19 a month, without a contract, and smart phone service with mobile broadband at $39 a month.


Voyager Mobile plans to operate nationwide, but currently is selling actively only in  Alabama, Delaware, Georgia, Illinois, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, Mississippi, New Hampshire, New Jersey, North Carolina, Ohio, Oregon, Rhode Island,South Carolina, South Dakota, Tennessee, Virginia, Washington and West Virginia at the moment.


Users buy their own devices at full retail, online only. The company plans to sell USB dongles, personal hotspot devices and tablets as well. 


A loyalty program is a distinguishing feature of its marketing pitch.  For every minute you use Voyager's service, users receive reward points they can use for airline tickets, gift cards, pay for monthly service, or to upgrade their phones. 

Backbone Optical Investments Drop, Wireless Climbs

Service provider spending on optical gear dropped 23 percent globally in the first quarter of 2012, compared to the fourth quarter of 2011, Infonetics Research reports, with the biggest declines occurring in all regions except North America. 


"While optical hardware revenue trends in all world regions were not positive in the first quarter of 2012, the most alarming development is that year-over-year in EMEA, particularly Europe,  spending on WDM optical equipment decreased faster than spending on legacy SDH equipment," notes Andrew Schmitt, principal analyst for optical at Infonetics Research.


That might indicate a longer-term change, not just a quarterly fluctuation, Schmitt says. Of course, it is not uncommon for capital investment in various forms of infrastructure to fluctuate a bit, especially in the long-haul networks, where new construction projects drive spending above baseline "maintenance" and "upgrade" investments. 

Family Data Plans Will Have More Revenue Impact than Capped Plans

Verizon Wireless is getting ready to launch a new "family data plan" or "multiple device plan" that could have important ramifications for the whole U.S. mobile business. 


As customers now can buy plans that support multiple users or phones on a single account, so Verizon Wireless is planning to allow users to purchase multiple-device plans where a single bucket of mobile data can be shared across a number of account devices.


That will represent the biggest change in mobile data pricing since the advent of capped plans, but will have more-important consequences. If history proves an accurate guide, Verizon Wireless will sell many more smart phones, while many more users will start to use mobile-connected tablets as well. 


That, in fact, was the reason family plans for voice and texting were adopted as well. At the point where almost every adult already had a cell phone, family plans were designed to effectively lower the cost of adding incremental devices for the one big population of untapped users: teenagers. 


In principle, the same thing should happen as Verizon Wireless and other service providers adopt the same approach. AT&T has said it also will do so, while T-Mobile USA says it will not do so. One suspects that objection by T-Mobile USA will fall, if the plans reshape consumer expectations, as one might suspect will be the case. 


The big difference for family data plans is that Verizon also is trying to wean customers off "unlimited" data plans for smart phones. The "stick" of capped data plans will be counter balanced by the "carrot" of multiple-device plans. 


"A lot of our 3G base is on unlimited," Verizon Communications CFO Fran Shammo said. "When they migrate off 3G they will have to go to data share. That is beneficial to us," Shammo says. 


One might expect that gross revenue will grow as users adopt the new plans, the same way gross revenues have grown when users have switched to family plans for voice and data. On the other hand, revenue per device should decline. 

Conceptually, family data plans and capped data plans are distinct issues, but are linked to an extent as Verizon is making changes to both policies at the same time. 

Verizon says "customers will not be automatically moved to new shared data plans."  If a 3G or 4G smart phone customer is on an unlimited plan now, and they do not want to change their plan, they will not have to do so. But the expectation generally is that, as new devices are purchased, most of those new phones will be bought with capped data plans. 

The exception is that customers who purchase phones at full retail price and are on an unlimited smart phone data plan will be able to keep that plan. 

Still, the big change is that Verizon's revenue metrics increasingly will shift from "revenue per customer" to "revenue per account." For service providers, the revenue impact of family data plans will have more impact than the shift to capped data plans. 

Amazon likely to launch 10.1-inch Kindle Fire in 3Q12

Amazon is likely to launch a 10.1-inch Kindle Fire in the third quarter, while tentatively suspending the launch of a speculated 8.9-inch model. That move, coupled with a potential move by Apple into the seven-inch form factor, could set up an interesting battle between the two tablet suppliers with the most-robust content ecosystems. 


On the other hand, end user choices might hinge on what tablet applications they "mostly" use and require. Some might find the more "general purpose" iPad is preferable to the "content optimized" Amazon Fire approach.


It might also be easier for work-related tablet apps to be supported on the iOS platforms, rather than the Kindle platform. 

63% of U.K. Homes can Buy Service at 24 Mbps

Some 63 percent of U.K. households now have access to superfast broadband, Ofcom, the U.K. communications regulator, now says. That represents is a combination of coverage now provided by the Openreach network as well as service provided by Virgin Media. 

U.K. consumers in February 2012 were getting access about 22 percent faster  than they were in February 2011, Ofcom says. 

In November 2011, the average actual U.K. residential broadband speed was 7.6 Mbps, compared with 6.2 Mbps in December 2010, and 6.8 Mbps in May 2011. 

The increases mainly are a result of consumers moving onto higher-speed packages.  In November 2011, for the first time more than half (58 percent) of U.K. residential broadband connections had an advertised speed of above 10 Mbps, up from 48 percent in May 2011.

However, more than 40 percent of broadband consumers remain on packages with speeds of 10 Mbps or less, even though many of them would be able to get a higher speed at little or no extra cost if they switched package or provider.

That gap, as much as anything suggests why getting consumers to buy faster broadband access is anything but automatic. 

Coupons Boost Sales, Even When Consumers Don't Use Them

Coupons are a popular advertising marketing tool. In 2010, U.S. consumers redeemed 3.3 billion coupons, cutting about $3.7 billion from purchase prices, though only about one percent are ever used.

But a new study suggests strong sales lift, even from consumers who do not use those coupons.

The study by University of Virginia Darden School of Business professors found that unredeemed coupons are still valuable to the companies that issue them.

“In fact, the coupons that wind up in the trash ultimately may deliver greater returns to a company than the coupons that are redeemed,” Rajkumar Venkatesan and Paul Farris write in the article “Unused Coupons Still Pay Off” in the May issue of Harvard Business Review.

Venkatesan and Farris analyzed the advertising campaigns of eight national retailers involving more than 500,000 targeted coupons for items representing more than 300 brands mailed out over 16 months.

The professors found that consumers who got the coupons but didn’t use them still “typically increased their purchases in the associated stores.”

In fact, these consumers accounted for 60 percent of the coupons’ “sales lift," the additional amount spent on both promoted and unpromoted items.

The professors predict that a company targeting 1,575 households with customized coupons for groceries over one week should succeed on two levels, first by prompting coupon redeemers to spend more than non-redeemers who nonetheless will be prompted to visit the store and spend.

Also, as a group, the non-redeemers will spend more at the store than the redeemers simply because there are more of them.

Coupons often get tagged as “bottom of the funnel” tools but clearly they also drive brand awareness and sales lift, says BIA/Kelsey. Redemption rates, while important, are not the only success metric.

Venkatesan and Farris conclude that new media players such as Groupon and Living Social are best evaluated not just in terms of list building and redemption but also in terms of long term sales lift even from non-redeemers and presumably even those on the list but who never bought the coupons.

Apple Might See Little Value in Mobile-Capable Retailer POS

Apple is among the few firms that one would expect to take a "revolutionary" approach to mobile payments, if it decides the capability is important, and can create or transform the device market. 


Already, when consumers buy inside Apple stores, there is no use of traditional point of sale terminals. 


Apple’s patents and stores suggest that the company envisages a world in which POS terminals are no longer fixed or discrete devices within the retail environment, but simply use standard mobile devices.


In other words, Apple, given its device focus, likely sees the mobile device itself as the way to do "check out."