Big U.S. Retailers Join Forces to Develop Mobile Wallet

Wal-Mart Stores, Target Corp., 7-Eleven Inc. and Sunoco are among a dozen retail companies launching their own mobile payments system, the Wall Street Journal reports. 

The Merchant Customer Exchange, or MCX, is at an early stage, and represents the biggest move uet by retailers to take the lead in the mobile payments business that has largely featured initiatives by payment networks, though Google, PayPal, Intuit, Square and Isis (the mobile service provider consortium) also have competing services under development. 

Little can be gleaned about the specific approaches MCX will pursue. The main point is that the MCX venture shows the jockeying by ecosystem participants to lead or control the developing mobile payments business in ways that favor a particular segment. 

Retailers likely are most concerned about the costs. Processing networks are most concerned about preserving their transaction revenue streams. Banks are most worried about their fees. 

Point of sale providers are worried about replacement or substitute retail checkout systems. Mobile service providers and application providers are most interested in what could be gained in either the transaction revenue streams or new marketing and advertising services. 

E-commerce providers see opportunities to increase their sales share over physical brick and mortar retailers, while place-based retailers want to boost their share of online sales volume. 

Virtually all the contestants likely see upside in the area of customer knowledge, engagement and experience. 

Cable Prices Grow 70% Faster Than CPI, 1995 to 2011

Some products are difficult to assess, in terms of value for money. The problem occurs in the computer industry, where nominal "price" does not actually capture qualitative changes in the product. A standard PC sold in 2012 is much more capable than a PC sold in 1995, for example, whatever the nominal price.

Something of that problem is reflected in the prices consumers pay for cable TV service, to the extent that the channel line-ups are not equivalent between 1995 and 2012, for example. Cable operators argue that the dramatically higher number of channels in expanded basic accounts for the price hikes.

The argument is not without merit. But it arguably is a more subjective matter whether most consumers find the product qualitatively "better," in relationship to the quantitative increases in price.

Slow High Speed Access Gains in U.S. Market, Second Quarter 2012

The seventeen largest cable and telephone providers in the United States, representing about 93 percent of the market, acquired about 260,000 net high-speed Internet subscribers in the second quarter of 2012, according to Leichtman Research Group.

That is the fewest of any quarter in the eleven years LRG has been tracking the industry. The top cable companies added about 330,000 subscribers. 

The top telephone companies lost about 70,000 subscribers, LRG says. 

AT&T and Verizon added 669,000 fiber-based high speed subscribers, though, while having a net loss of 763,000 DSL subscribers. 

Broadband Internet Provider	Subscribers at End of 2Q 2012	Net Adds in 2Q 2012
Cable Companies
Comcast	18,738,000	156,000
Time Warner	11,208,000	72,000
Cox*	4,555,000	25,000
Charter	3,839,000	37,000
Cablevision	3,032,000	25,000
Suddenlink	979,400	(3,200)
Mediacom	894,000	7,000
Cable ONE	462,426	(1,017)
Other Major Private Cable Companies**	1,951,000	10,000
Total Top Cable	45,658,826	327,783
Telephone Companies
AT&T	16,434,000	(96,000)
Verizon	8,776,000	2,000
CenturyLink^	5,763,000	18,000
Frontier^^	1,751,000	5,000
Windstream	1,361,600	(2,200)
FairPoint	320,812	2,302
Cincinnati Bell	257,600	400
Total Top Telephone Companies	34,664,012	(70,498)
Total Broadband	80,332,838	257,285

Sources: The Companies and Leichtman Research Group, Inc. 

46% Of U.S. Bank Account Holders Will Use Mobile Banking By 2017

According to a new Forrester Research report, mobile banking will be used by 108 million U.S. usersby 2017. That’s about 46 percent of all U.S. bank account holders. That should not come as a surprise. What percentage of people now use automated teller machines?

Today, perhaps 13 percent of U.S. and 9 percent of European mobile phone owners regularly use their banks’ mobile banking tools.

Hits to Legacy Services Continue in 2nd Quarter 2012

DirecTV had never lost customers, on a net basis, ever, until the second quarter of 2012. Cable companies have losing video customers for about 16 consecutive quarters. 

And now it appears U.S. telcos might have lost digital subscriber line customers, on a net basis, for the first time. 

The eight largest American phone companies collectively lost 70,000 net DSL subscribers between April and June 2012. 

AT&T lost 96,000, while the other seven on average added a few thousand each. During that same period, the top four public cable ISPs, including industry giant Comcast, reported a gain of 290,000 subscribers. 

To be sure, you can attribute the second quarter loss virtually entirely to AT&T. But the fact remains that, where it comes to high speed broadband access, cable operators are adding customers, while telcos are struggling to keep pace. That doesn't mean telcos necessarily are "losing."

Keep in mind there is a huge nuance here. AT&T U-verse high speed Internet delivered a second-quarter net gain of 553,000 subscribers to reach a total of 6.5 million, helping offset losses from DSL.

In other words, legacy DSL is losing consumer favor. But U-verse and Verizon's FiOS are growing. So the cable lead in high speed access is not necessarily as stark as it might at first appear. 

In fact, you might argue that AT&T and Verizon are "trying" to lose DSL customers in favor of U-verse and FioS customers. 

Apple Grows Tablet Share to 70% in Second Quarter 2012

 Apple during the second quarter of 2012 shipped 17 million iPad 2 and new iPad tablets, up 44.1 percent from 11.8 million the first quarter of 2012, according to IHS  iSuppli.

As a result, Apple gainhed 11.5 points of market share during the quarter, boosting Apple’s second-quarter 2012 global tablet share to 69.6 percent, up from 58.1 percent in the first quarter.

Verizon Acquisition of Cable Spectrum Will be Approved

The U.S. Justice Department will drop its objections to the proposed Verizon purchase of spectrum from leading U.S. cable operators,  after the companies agreed in principle to limit the duration of the joint ventures to five years or less, after which they will have to reapply for antitrust clearance, people familiar with the discussions told the Wall Street Journal. 

Verizon and Comcast have also agreed not to implement the joint marketing agreement in areas where the two companies currently provide fixed network Internet, TV and phone services. As a practical matter, the firms would likely have done so in any case, to avoid drawing regulatory ire, it might be argued.

Under the new plan, Verizon Wireless stores won't sell Comcast's Xfinity service in regions where its parent company, Verizon Communications, already offers its FiOS service, for example.  That will alleviate concerns that the agency marketing deals effectively would end competition between cable and Verizon, in regions where they now compete head to head.

The new concessions mean that, as many had predicted, the agency deals will be aimed at AT&T and other competitors. Essentially, the new way the agency agreements are implemented will mean that cable operators can sell Verizon wireless products to bolster their triple play offerings, except where one of the cable companies competes with a Verizon fixed network. 

In some cases, cable companies will be able to sell Verizon Wireless products, while in other areas they cannot. The revised framework, in other words, does not represent, either for Verizon or the cable operators, a clear "in region only"or "out of region only" framework.