Sprint Launches International Free Calling, Texting, Mobile Internet Plan

Sprint is giving customers the ability to travel to major areas in Latin America, Europe and Japan and roam with up to 2G speeds to read emails and surf the web at no additional charge, as part of its new International Value Roaming feature.

When on the plan, customers also can send unlimited text messages for no extra charge and they can call anywhere in the world from these countries for 20 cents per minute.

Argentina, Brazil, Chile, Costa Rica, El Salvador, Germany, Guatemala, Japan, Mexico, Nicaragua, Panama, Russia, South Korea, Spain and the United Kingdom are countries included in the plan.

Customers can easily add International Value Roaming to any Sprint domestic plan atwww.sprint.com/internationalroaming or by visiting a Sprint store.

Customers also can use Sprint’s “Wi-Fi Calling” feature to make free calls from over 200 countries back to the United States.

Wi-Fi Calling is available at no additional charge when calling a United States,  U.S. Virgin Islands or Puerto Rico phone number.

Wi-Fi Calling is available on iPhone 6, iPhone 6 Plus, iPhone 5c, iPhone 5s and select Android devices.

Some will say the new Sprint feature is a reaction to T-Mobile US, which recently added no extra charge no extra charge calling, texting and Internet access in 2013.  

One might argue this is another instance where T-Mobile US and Sprint are attacking the market with additional value, while AT&T and Verizon try and maintain either a premium position (higher price, better quality) or at least an industry-standard (about what you’d expect in terms of price and value) position.

Amazon AWS Revenue Grows 40% Year over Year

Amazon's AWS cloud infrastructure business is the fastest-growing billion dollar enterprise IT business in the world, Amazon execs now say. 

Amazon EC2, which provides on-demand computing resources, grew 93 percent between the fourth quarter of 2013 and fourth quarter of 2014.

Data transfer volume for Amazon S3 grew 102 percent over the same time period. 

Revenue appears to have grown 40 percent, year over year. 

When Will T-Mobile US Become the 3rd Biggest U.S. Mobile Company?

The only question many observers have is how soon Sprint, now the third-largest U.S. mobile service provider, is passed by T-Mobile US. Some think that could happen in the first quarter of 2015. Others think it might take until the second quarter.

But most think the change will happen. 

Sprint executives are right that it doesn't matter much whether Sprint is third or fourth, for the moment. The difference in subscriber counts won't be so large. 

But if T-Mobile US growth rates continue at anything near present rates, that gap will widen. At some point, quantitative change becomes qualitative change. 

And such changes of market share, at the top of any mobile market, and driven by organic growth, are quite rare. 

True, market share does change substantially when there are major acquisitions in a market. But a market share shift driven principally by organic growth is a more dangerous trend. Instead of a reshuffling of ownership, which is what a merger represents, an organic growth shift means consumers are shifting demand. 

Near term, perhaps the change in market share means little. Longer term, it could be quite significant. 

ISPs Risk Consumer Ire in Fighting Gigabit Marketing Wars

It always has been difficult to conduct marketing campaigns whenever a service provider is upgrading or introducing network-dependent local access services. Major metro area cable TV network builds (new builds or rebuilds) often take three years.

So what is the marketing team supposed to do about it mass media efforts when, by definition, a sizable number of would-be customers will contact the firm about buying, only to be told the service is not yet available “in your neighborhood.”

It is a messy process, more expensive and almost certain to generate consumer ire. That is why some firms, in the midst of such construction projects, end to eschew mass media marketing in favor of lower-key programs that can be targeted neighborhood by neighborhood.

Some firms might be taking different risks, though, touting gigabit services using mass media outlets.

Doing so, when the company knows the new services initially will be available only in some neighborhoods, is bound to generate ill will. In such cases, the firms appear to be taking such risks to tout the magnitude of upgrades, part of the access marketing wars that are building across the United States.

It will not help that Comcast, arguably the leader in U.S. high speed access, will upgrade virtually all customer locations for gigabit access by the end of 2015, with 18 million out of 21 million locations able to buy 2 Gbps service.

That is about as big a deal as was Google Fiber’s “symmetrical gigabit for $70 a month” offer.

But the downside, for would-be competitors, is the risk of increased potential customer ire, since most of the offers--Comcast being the big exception at the moment--being targeted only to high-demand neighborhoods.

"Back to the Future" for FreedomPop "Premium Voice"

It is back to the future for FreedomPop, which has introduced a “better calling experience”

called “Premium Voice technology.” So is it a fancy new Internet Protocol tweak? No, the service uses a second generation network, much as 4G networks often rely on 3G for voice services.

That sort of thing--finding a new use for stranded assets, or encouraging customers to use resources off peak--happens often in the telecommunications business.

One reason some mobile service providers, such as Sprint and T-Mobile US, are so supportive of allowing customers to make free voice calls, send free text messages and use mobile Internet access on Wi-Fi is that doing so frees up mobile network bandwidth, even if it risks sacrificing some revenue.

One reason telephone companies used to feature highly-discounted calling during the evenings and on weekends was that the network was lightly loaded at those times.

On the other hand, FreedomPop also has been among the leaders in the mobile space at combining Wi-Fi and mobile network access, a feature likely to be fundamental by the time fifth generation networks are commercialized.

The Premium Voice capability essentially involves sensing when the IP connection is unstable, and switches a call over to Sprint’s 2G network.

Some believe 5G will be built as an extension to 4G, while others think the break might be more discontinuous. If we are less than 10 years away from launch, either pattern could occur.

But some might argue all the fundamental building blocks (extremely low latency, extremely high bandwidth, ability to use any network, software defined networks, network functions virtualization, big data capabilities, small cell technology, better antennas, exploitation of new millimeter wave frequencies and so forth already are clearly coming.

And then there is the other possibility we usually do not consider, as in the case of putting old legacy networks to new users, or monetizing otherwise stranded assets.

Does Amazon Prime Have to Catch Netflix?

Google was the first, and so far perhaps the most successful software company to build a big business using an advertising revenue model. But content has played a significant role for Apple, which uses content to create value for its device sales, and Amazon, which uses content as a value driver for its subscription shipping program, Amazon Prime.

So while it is useful to note how well those, and other providers, will be in the coming subscription streaming business (market share or revenue, for example), “success” will be a more nuanced issue.

Consider a finding that Amazon Prime subscribers in the United States are more likely to use Netflix than Prime Instant Video, according to Strategy Analytics.

About 63 percent of Amazon Prime subscribers used Netflix in the previous month compared to 59 percent who used Prime Instant Video. In other words, slightly more Amazon Prime customers used Netflix streaming video more than the Amazon Prime service.

So is that a problem, or not? “Amazon is needlessly ‘losing’ users to Netflix when, in fact, it should be eating into their user base,” says Leika Kawasaki, Strategy Analytics digital media analyst.

On the other hand, says Kawasaki, Amazon is taking “significant steps” to boost value.

Still, “in contrast to countries such as the UK and Germany, Americans are more likely to subscribe to Amazon Prime for free two-day shipping than for Prime Instant Video,” said Kawasaki.

So whether Amazon Prime needs to best Netflix in narrow terms (which firm has more customers, or which firm makes the most money) might not be the most significant issue.

Amazon Prime streaming might be viewed somewhat as Apple views its own content services: as a means to an end. For Apple, content helps it sell more devices. For Amazon, content is both a product and a way to sell more products.

Some consumers probably view Amazon Prime as a value added feature of a two-day free shipping “product,” and not as a stand-alone streaming service.

Given the disparity in catalog, it is hard to see why a rational consumer would directly compared Amazon Prime and Netflix strictly as sources of content. Netflix wins. Period.

On the other hand, Amazon Prime is a vehicle to upsell more video content, as well as a value to boost its free shipping program.

In that view, Amazon Prime does not have to be too close to Netflix, in terms of viewers or direct revenue.

Nor does it necessarily matter that more people with Amazon Prime subscriptions watch Netflix.

They might be heavier video consumers than average. They might rationally recognize that the Netflix catalog is more varied. And, in most cases, they might simply view Amazon Prime as a value add for a shipping service, not a full competitor to Netflix.

Is Distribution or Content Still King? It's Changing, Again

There is a very old debate in the video entertainment industry about whether ecosystem power is held by distributors or owners of content.

A perhaps interesting illustration of how the power could shift is illustrated by current negotiations between Apple and Disney about content rights. Disney owns ESPN, for example, considered an anchor for a streaming video service.

Disney’s negotiating is familiar. Disney wants Apple to carry more Disney channels in exchange for a carriage agreement. That is what typically happens in any negotiating session between major networks and distributors.

In this case, it remains unclear whether Apple, as a distributor, or Disney, as a content supplier, has the stronger hand. Both are powers in their own right, within the broader Internet ecosystem.

Perhaps the situation of the channels that will not be asked to be part of a new streaming service (featuring perhaps 25 channels is instructive) illustrates the changing nature of the equation.

Though I generally argue that “content is king,” at least in recent years, in past times I have argued that “distribution was king.” But that was a time when cable TV operators--only one in each market--were the sole distribution agents.

As satellite TV came on the scene, preceded by smaller hotel and satellite master antenna TV operators, as well as mostly unsuccessful MMDS operators, the number of important distributors grew. Most recently, cable TV operators, Google Fiber and now the streaming services have added to the number of distributors.

That arguably has titled power back to the content owners.

But the Disney-Apple and Sling TV services offer a way of revising  the nature of the argument. Perhaps the generally-unused adjective “important,” used to modify “channel” or “network,” is the new key.

In a world where either a la carte or skinny bundles gain share and importance, it is the small, niche channels that lose power. They won’t be included in the 20-channel or 30-channel bundles. So they lose bargaining power because the distributors do not want to carry them.

The anchor services such as ESPN will continue to hold considerable power, as they are the “must have” channels. All the smaller channels will lose value.

So “important content” is king. Not all content will continue to have the same status as in the past. And, for some time, the power of distributors is going to grow, as new streaming sevices struggle to break free and assume dominance of the distribution business.

So it isn’t going to be easy to say that “content” or “distribution” clearly is king.