Wireless carriers have traditionally made money off lengthy two-year service agreements, rather than physical device sales. In the age of smartphones, however, carriers are footing the bill for expensive handsets that result in smaller margins, while phone makers such as Apple reap the benefits. To combat traditional phone subsidies, carriers in the U.S. have continued to raise monthly rates and employ new and higher fees. In Europe, service providers are taking more aggressive measures, with some carriers refusing to subsidize devices for new customers. The carriers’ latest cries of resistance are drawing applause from investors and analysts alike, who say carriers could benefit more from the smartphone boom if they raise contract prices and slow the rate at which customers buy new phones. More →
A new study from Parks Associates found that two-thirds of U.S. consumers are unwilling to spend more than $50 per month on mobile data plans, while almost half of smartphone users were unsure how much data they consumed each month. The report highlights the risks carriers face as they try to shift consumers from unlimited data plans to usage-based ones. “Moving mobile users to usage-based plans will be difficult and painful, but changes are necessary for operators to maintain revenues,” said Harry Wang, Director of Mobile Research at Parks Associates. “Operators would benefit by recasting mobile data services as experience-driven in order to reduce price sensitivity, fend off competition, and keep their mobile data revenue engine humming.” The firm believes that in order for carriers to maximize their revenues, they should tie in their offerings to popular apps and services, including TV, music, books, newspapers, games, location-based services, and social activities, rather than charging consumers per megabyte. Read on for Parks Associates’s press release. More →
Former Research In Motion co-chief executive Jim Balsillie sought a radical shift in strategy before he stepped down, Reuters reported on Friday. Citing two unnamed sources, the publication claims Balsillie wanted to allow wireless companies in North America and Europe to use RIM’s proprietary network for services on non-BlackBerry devices. The plan would help carriers entice customers to upgrade from feature phones to smartphones and allow them to offer inexpensive data plans that were limited to social media and instant messaging via the company’s BlackBerry Messenger service. Despite RIM’s network bringing in nearly $1 billion each quarter, the plan was vetoed, leading to Balsillie’s resignation soon after he stepped down as co-CEO. The Blackberry-maker will instead focus more on its next-generation BlackBerry 10-powered smartphones, and on regaining enterprise momentum. More →
Following a huge week that saw Apple’s stock climb above $630 amid a fresh round of analyst upgrades, one analyst isn’t sold on the notion that smooth sailing is assured in the immediate future for the world’s most valuable company. BTIG Research analyst Walter Piecyk thinks Apple is set to report blowout earnings for the second fiscal quarter — he sees Apple earning $10.75 per share on sales of $40 billion in the quarter, versus Wall Street’s consensus of $9.81 and $36 billion — but he downgraded Apple’s stock to Neutral from Buy, noting that it’s time for investors to “take a breather.” Read on for more. More →
The United States Department of Commerce and National Telecommunications and Information Administration on Tuesday announced that the federal government has repurposed 95MHz of “prime spectrum” within the 1755-1850MHz band. As per President Obama’s request, the NTIA has been collaborating with the FCC in an effort to make 500MHz of spectrum available for commercial use over the next 10 years, nearly doubling the amount currently available. “Today’s report sets a path for putting prime spectrum into commercial wireless broadband use, in support of the Obama Administration’s goal to encourage investment and innovation while enhancing America’s economic competitiveness,” said NTIA Administrator Lawrence E. Strickling. The NTIA has previously recommended the reallocation of 115 MHz of spectrum, and with today’s announcement, federal agencies have contributed 40% of spectrum to the President’s goal. “Spectrum is a finite resource in growing demand, and we need to focus on new ways to maximize its use,” said Strickling. “By working with the FCC, other federal agencies, and the industry, we can make more spectrum available to fuel innovation and preserve America’s technological leadership while protecting vital government missions.” Read on for the NTIA’s press release. More →
The Federal Communications Commission announced on Monday the reformation and modernization of the Lifeline program. The revamped program will ensure affordable phone service is available to low-income families. Lifeline is a “universal service program that fulfills Congress’s mandate to ensure the availability of communications to all Americans.” The percentage of low-income households with phone service has increased dramatically since the program began in 1985, from 80% to nearly 92% last year. The FCC is looking to create a number of databases and protocols to end carrier abuse of the program. One such measure will be the creation of an eligibility database from governmental data sources to automate eligibility of initial and ongoing Lifeline participants. The move will “reduce the potential for fraud while cutting red tape for consumers and providers.” Lifeline is set to be revamped by no later than the end of 2013. More →
Democratic Representative Edward Markey of Massachusetts released a draft of his cell phone privacy bill on Monday. The Mobile Device Privacy Act is designed to protect consumers from tracking software such as Carrier IQ, which caused an uproar late last year when it was discovered to be secretly monitoring 150 million smartphone users. The bill would require companies to disclose the use of such tracking software and clarify exactly what information the software collects. Customers would have to consent to any data collected or transmitted, and third parties would have to file applications with the Federal Trade Commission and the Federal Communications Commission to ensure the data is being transmitted securely. “Consumers have the right to know and to say ‘no’ to the presence of software on their mobile devices that can collect and transmit their personal and sensitive information,” said Markey when speaking to The Hill. Markey serves on the House Energy and Commerce Committee and is the co-chairman of the Congressional Privacy Caucus. More →
If you are an everyday wireless consumer walking into a store to purchase a new smartphone, the terms HSPA+, WiMAX and LTE may mean very little to you. Yet, each of those networks is different and each is being advertised as “4G” in the United States, thanks to an International Telecommunications Union policy that allows carriers to market newer 3G technologies as “4G” networks. A new bill presented to the U.S. Senate this week hopes to force wireless carriers to clarify what exactly their “4G’ networks offer, including minimum and maximum data speeds. The bill was filed by Senator Amy Kobuchar and Al Franken from Minnesota as well as Senator Richard Blumenthal from Connecticut. “Wireless providers need to make sure their customers can count on the speed, reliability, and the price they were promised when they signed up” Senator Franken explained. “And if they can’t fulfill their promise, they need to be held accountable.” The bill is in addition to The Next Generation Wireless Disclosure Act, which was filed in June by Congresswoman Anna G. Eschoo, who applauded the new bill from Kobuchar, Franken and Blumenthal. Read on for the full press release from Eschoo’s office. More →
Google may be preparing to take its mobile efforts to the next level as it tests a Google-branded MVNO in Spain. Unconfirmed reports accompanied by photos of a Google SIM card and a Nexus S running on a “Google_Es” network suggest that Google is toying with the idea of becoming a Mobile Virtual Network Operator, or a company that provides cellular service by leasing capacity from existing wireless carriers and piggybacking on their networks. The photos suggest that testing is in the late stages as Google has already printed branded SIM cards, which have reportedly been delivered to Google Spain employees for testing. Additional details are scarce for the time being, but a Google-branded MVNO with deep Google Voice integration and a portfolio of Android devices from its potential Motorola acquisition could give the tech giant unprecedented control over the user experience. There is currently no firm indication that Google is testing similar services in other markets. Additional images follow below.
Sprint’s already been very vocal about its opposition to AT&T’s planned purchase of T-Mobile from Deutsche Telekom, but on Tuesday the carrier officially asked the Federal Communications Commission to step in and block the purchase. In its 377-page filing, Sprint argued that the acquisition would make AT&T the nation’s largest carrier with a total of 118 million subscribers and a 43% grip on the postpaid market. The carrier added that Verizon and AT&T would earn 78% of all wireless revenues and the “Twin Bell” duopoly would have an 82% grasp of the postpaid market, making it difficult for other carriers such as Sprint to compete. AT&T, meanwhile, has argued that the acquisition will create jobs, will not stifle competition, and will help deliver high-speed wireless broadband to 97% of U.S. residents. More →
AT&T, the nation’s second largest wireless provider, has just announced that it will acquire T-Mobile USA from parent company Deutsche Telekom in a cash and stock deal worth approximately $39 billion. With all of the talk of Sprint and T-Mobile joining up, the AT&T news comes out of the blue — though strategically it makes more sense due to both carriers’ spectrum and network technology. It has been widely reported that Deutsche Telekom was looking to get rid of T-Mobile USA for various reasons. AT&T has also committed to delivering LTE to an additional 46 million people with the T-Mobile acquisition, promising to cover close to 95% of the U.S. population with LTE wireless services in the future. The deal is expected to close, pending regulatory approval, within the next 12 months. The full press release is after the break.
According to information garnered by UK paper The Independent, Apple will not include Near Field Communications (NFC) technology in its next generation iPhone. Citing sources at “several of the largest mobile operators in the UK,” the paper states that Apple informed mobile carriers of its decision to forgo NFC over several meetings. Analysts suspect that Apple may be working on its own NFC-like payment system — one that routes payment through the company’s iTunes Store — as it has been discouraged by the “lack of a clear industry standard.” NFC is expected to handle over $150 billion by the year 2015, making it a trend that no mobile carrier or manufacturer wants to be left out on. More →
According to a report on Wednesday from industry watcher DigiTimes, Acer is seeing higher than expected interest in its upcoming line of tablets. Demand is so high, the report claims, that it exceeds the initial supply Acer has ordered from its manufacturing partners. The strong demand comes from various cellular carriers around the world that are seemingly eager to bundle Acer’s upcoming devices with data plans. According to the report, Acer plans to launch four devices between now and April: The 10-inch Windows 7-powered Iconia W500, which will launch mid-March; the 10-inch Tegra 2-equipped Iconia A500, which will run Android 3.0 (Honeycomb) when it launches in late March; the 7-inch Android-powered Iconia A100, which will launch in April; and the supersized 4.8-inch Gingerbread smartphone dubbed Iconia Smart, which will also launch in April. Acer noted that initial limited inventory is due to a short supply of key components, such as touchscreen displays. More →