If Facts Don't Fit the Theory, The Theory Probably is Wrong

Facts sometimes don't fit theories that purport to explain those facts.When that happens, it is likely theory is wrong, in some way.That might appear to be the case for one theory about the strategies any industry has to embrace at any stage of its lifecycle.


Of course, some of you will look at the chart and sense a huge anomaly. The telecom industry is over 150 years old and long ago would have passed beyond the "scale" stage, for example.


One observation might be that the theory "fits" non-regulated industries, but does not fit very well for highly-regulated industries such as utilities. Others might note that airlines, which were deregulated in the 1980s, have had 30 years of mergers already. The theory suggests the entire process of moving through all four stages should take about 25 years. 


Note also that the theory claims to apply for any industry that is formed, or is deregulated. Aviation has been a distinct business for much longer than 50 years. 


Of course, it is always possible to force the facts to fit by artificially changing the definition of what an industry is. One might argue that "smart phones" represent a different industry that that of feature phones, or voice-only phones, or analog phones.


One might argue the older telecom business using step switches was different from the business using electromechanical switches or digital switches or now IP switches. 


But that's probably a case of straining to make the facts fit a theory, rather than acknowledging there is something wrong with the theory. 

Best Buy Will Use Mobile Payments Inside New Stores

The heart of a test store near Best Buy's headquarters here is a "Solution Central" help desk, rimmed with chairs and manned by the company's black-tied Geek Squad. It strongly resembles the Genius Bar at Apple's stores.


Best Buy says the new smaller stores are focused less on displaying every conceivable gadget and more on connecting customers with employees who can answer questions or help program equipment.


As part of that change, customers will be able to buy products from just about any Best Buy associate, on the spot, without going to a designated "check out" location, as is the Apple practice as well. That means mobile payments will be the "new normal" at the new Best Buy stores. 

RIM Earns $4 Billion Annually in Service Provider Fees for Email Services; Carriers Want to Pay Less

Research in Motion executives say the company is "not in a death spiral," but pressure is growing. RIM earns $4.09 billion in annual revenue from mobile service providers who provide RIM device email services to consumers.

But AT&T, for one, wants to pay RIM less for the privilege.The fees account for more than a third of revenue at RIM, according to Bloomberg.

“There’s definitely negotiations going on right now to reduce” the fees, said Sameet Kanade, a technology analyst at Northern Securities.

Samba Mobile Launches Free Mobile Broadband Service in U.K.

Samba Mobile is going to test the notion that an ad-supported mobile broadband service can work. Apple iPad users buy a Samba SIM now for £2.99 plus some "packaging" costs and get free mobile broadband service. Other notebook or desktop PCs will require a Samba dongle. 


Samba Mobile will become the latest service provider to try and prove that an ad-supported mobile service can work, though all prior attempts have failed. 


Tablet owners need only the Samba Micro-SIM, though the service is only available on Apple iPads at this stage. Laptop and desktop users must purchase a Samba USB-Dongle and the SIM for £25. 

Samba surfing is compatible with Firefox and Google Chrome but members are forbidden from accessing pornography sites as well as material that breaches copyright or is deemed offensive. 

The company also says it may install cookies to collect information about your “general internet usage”.

One Reason Mobile Service Providers Think M2M Has a Future

The vending machine industry has been fcing declining revenue since 2007, and industry supporters think new machines, using more digital technology, can reverse the trend.

Those changes will require broadband access, many would argue, creating a new type of customer for mobile service connections.

Telefónica Sees Huge Upside in M2M, Carrier Billing

Telefónica might be a bit optimistic, but the firm believes it can generate annual revenues of €5 billion (US$6.2 billion) by 2015 from initiatives that leverage the carrier's billing and charging capabilities as well as machine-to-machine services.

Those are important assertions for one principal reason. When a tier-one service provider decides to target its human and financial resources to a new revenue growth initiative, scale matters. In other words, a large telco cannot afford to waste time chasing small revenue opportunities, but has to look for opportunities that make a difference.

The shorthand way you can think about it is that when a service provider earns scores of billions worth of revenue each year, small opportunities do not “move the revenue needle” enough to be worth pursuing. As a very-simple rule of thumb, a tier-one service provider has to look for opportunities that generate at least a billion dollars a year.

Telefónica Digital believes its new global "Direct to Bill" agreements with Facebook , Google , Microsoft Corp. and Research In Motion Ltd. will do so.

Those deals allowTelefónica customers to buy content and services from Facebook, Google, Microsoft and RIM application stores, for example, using their mobile accounts. The charges appear directly on the subscriber phone bills, and do not require use of credit cards.

The operator believes this could prove very popular in Latin America, where, according to Telefónica, "credit card penetration is low and 60 percent of the population do not have bank accounts."

Telefónica also has entered a strategic partnership with service provider Etisalat that extends Telefónica's M2M reach into 17 new countries (in Africa, Asia/Pacific and the Middle East). The two operators plan to "jointly develop business opportunities in Machine-to-Machine (M2M), financial services, cloud computing, eHealth, mobile advertising and over-the-top [OTT] communications."

A La Carte Video Would Destroy Most Channels, Study Suggests

If the U.S. government mandated that TV channels be sold individually, only five to 10 traditional TV networks would survive, destroying up to $300 billion of value, endangering some one million jobs and curtailing consumers' video choices, according to an analysis by Needham and Company.

According to Needham's analysis, with unbundling, TV subscription revenue would decline 15 percent to 20 percent and ad revenue would plummet 75 percent. Meanwhile, if content companies delivered content directly to consumers, they would incur customer service costs estimated at $50 per customer per year, or $5 billion nationally.