GM Expects to Make $350 Profit on Auto LTE Services

General Motors believes it will generate $350 million in additional profit between 2015 and 2018 from fourth generation Long Term Evolution services (4G LTE) mobile broadband in its cars and trucks.

GM has suggested 4G LTE in GM cars will cost between $5 and $50 per month for data on top of the $20 to $30 per month that owners pay for OnStar telematics.

A 200 MB per month service plan costs $5 ($10 without Directions & Connections plan).

The 1 GB per month service costs $15 ($20 without Directions & Connections). The 3GB per month plan costs $30.

The 5 GB per month plan costs $50.

A day usage plan including 250 MB for one day costs $5.

Users also can buy a 10 GB plan, allowing usage over 12 months, for $150 ($200 without Directions & Connections).

AT&T Share Plan customers can add the car service for $10 per month per GM car.

7% of U.S. Consumers Substitute Mobile Access for Fixed Access

About seven percent of U.S. residents own a smartphone but do not buy fixed network high speed access service at home, and therefore rely on their smartphones for access. That data point provides some evidence about consumer ability to substitute mobile access for fixed Internet access.

About 15 percent report they have a limited number of ways to get access to the Internet aside from using their phones, according to a study conducted by the Pew Research Center.

Those finding point out the growing role of mobile Internet access, especially for some groups of consumers, as well as the changing context of “Internet access,” which now includes a variety of access methods.

Today nearly 66 percent of U.S. residents own a smartphone and 19 percent rely to some degree on a smartphone for online access.

Using a broader measure of the access options available to them, 15 percent of Americans own a smartphone but say that they have a limited number of ways to get online other than their cell phone.

Those of you familiar with Internet access trends in the developing world will not be surprised to find that smartphone-only Internet access is correlated with income, education and age.

About 15 percent of U.S. residents 18 to 29 years old are heavily dependent on a smartphone for online access.

Some 13 percent of U.S. residents with an annual household income of less than $30,000 per year are smartphone-dependent, compared to one percent of residents in households earning more than $75,000 per year.

Likewise, some 12 percent of African Americans and 13 percent of Latinos are smartphone-dependent, compared with four percent of whites.

U.K. Poll Finds 33% No Longer Talk on Their Phones

We still call the devices “phones,” but “voice” was not on a list of the top 10 most-used mobile phone features in a recent poll of 1,000 people in the United Kingdom, conducted by Oxygen8 Group.

In fact, 33 percent of respondents claim they no longer use their phones to make or take calls.

Granted, the online poll appears not based on a randomizing process, so likely is not representative of the “typical” user, but the results are a surprise, nonetheless.

source: Oxygen8

Messaging Apps are Really Sticky

“Stickiness” long has been among the important features of any app or site. “Stickiness” means new users stick around and become regular or habitual users, while regular users become engaged users that do not churn out for another rival app or experience.

By those measures, messaging apps are highly sticky, meaning new users tend to become regular users, and regular users are engaged enough that they are “loyal.”

Retention rates of messaging apps outperform the average of all apps, according to Flurry.

In fact, messaging app retention is 1.9 times better than the average app after one month and 5.6 times better than the average app after one year. After 30 days, some 36 percent of people continue to use a new app, compared to 68 percent of people using a new messaging app.

After six months, just 18 percent of people who first used a new app continue to use it. By comparison, about 62 percent of people who started using a messaging app continue to do so.

After a year, just 11 percent of people who tried a new app still use it, compared to 62 percent of people who tried a new messaging app a year ago.  

Messaging apps’ daily use is 4.7 times higher than the average app, Flurry says, while the average daily use of an app across all categories is 1.9 times.

Messaging apps are used, on average, almost nine times every day. Most other apps get used less than twice a day.

Verizon Dismisses Wi-Fi-Based Mobility. But Just Wait

It never is unusual when a major incumbent dismisses a new rival offering a lower-end product without all the features of the existing product. That happened when Skype and other VoIP products started appearing, or when instant messaging services arose.

Cable TV operator business communication services arguably were “not as good” as service supplied by the historic suppliers.

More than 45 years ago, MCI’s long distance service was not as good as AT&T’s service.

So it will come as no surprise that Verizon argues any Wi-Fi-only mobile service, or even a Wi-Fi with default to mobile service offered by cable operators might not “be as good” as Verizon’s arguably industry-leading service.

One present issue is the seamlessness of transitions between Wi-Fi networks and mobile networks. But it seems only a matter of time before that capability improves dramatically. Seamless use of any available network is, in fact, a design goal for coming fifth generation networks.

So it would not be surprising is a present weakness disappears over time, as it has in many other segments of the business, when new technology, networks and platforms are used to attack a legacy business.

India Mobile Prices are About to Rise

It is a truism that consumers (buyers) ultimately pay for all supplier costs of doing business. So it is that Indian mobile consumers are going to pay for all the spectrum recently purchased by the leading Indian mobile service providers.

That means retail prices are going to climb.

“We believe that telcos are likely to raise prices in response to high spectrum prices,” said Fitch Ratings. Also, “most telcos will report negative free cash flow in 2015 as they need to pay a quarter of the committed amount up front.”

At the same time, the spectrum acquisitions will put pressure on balance sheets and cash flow, limiting supplier ability to invest in networks and compete. That, in turn, means the Indian mobile market will consolidate from about 10 contestants to six in the wake of the recent spectrum auction, says Fitch Ratings.

India's spectrum auction raised US$17.7 billion, a sum that now will have to be raised or shifted from other uses, and will prove too heavy a burden for some contestants, Fitch believes.

The biggest four mobile companies--Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications--won 82 percent of the licenses. Bharti spent about US$4.7bn. Vodafone invested US$4.2 billion.

Idea Cellular committed US$4.9 billion, while Reliance spent  US$693 million.

As logical as it might be for governments to view spectrum auctions as a way to raise money, spectrum costs ultimately are paid for by consumers who buy mobile services.

As mobile operators seek to recover the sums spent on spectrum, they primarily will have to turn to retail buyers of mobile service. On the other hand, consolidation might help the surviving carriers raise prices.

One Way or the Other, U.S. Cable TV Market Changes

Bright House Networks might be called a consolation prize for Charter Communications if the Comcast bid to buy Time Warner Cable is approved by regulators. As structured, a Charter offer to buy Brighthouse is contingent on regulator acceptance of the Comcast offer.

Charter had made a bid of its own to buy Time Warner Cable, but its offer was topped by Comcast’s own offer. The $10 billion offer for 2.5 million subscribers values Bright House at about $4,000 per subscriber, a valuation metric not used in the broader telecom business.

U.S. cable TV operator rankings will change, in almost any conceivable set of decisions and deals. Comcast, which became the largest U.S. cable TV operator when it acquired the assets of AT&T Broadband, was trailed by Time Warner Cable as the clear number two cable company, ranked by number of subscribers.

If Comcast is successful in gobbling up Time Warner Cable, Charter gets Bright House, creating a new number-two provider for the first time in decades. For decades, Time Warner has been the second-biggest U.S. cable TV provider, behind either Tele-Communications Inc., which sold to AT&T, or AT&T Broadband itself, which then was purchased by Comcast.

Charter has held the number-three spot in the rankings, but with a wide gap between it and a Comcast that has added Time Warner Cable.

If the Comcast bid is scuttled, observers expect Charter to reemerge with a bid to buy Time Warner Cable. That would also create a new number-two provider, but far larger than a Charter that had purchased Bright House.