Archive for the ‘Telecom’ Category

Carly goes leather: “No more Mr. Nice Guy”

April 25, 2012

TakeAway: T-Mobile reboots the its brand with an alter-ego of its well-known spokeswoman in the hopes of increasing trial.

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Excerpt from AdAge:
“T-Mobile Talks Tough for Its Comeback, Vowing ‘No More Mr. Nice Girl’”

Carly who has starred in T-Mobile’s ads since 2010 and been dubbed by some a DVR-proof pitch personality, is trading her usual frocks for biker leather as the T-Mobile looks to halt mass subscriber defections.

image

“The pending AT&T deal negatively impacted customer satisfaction and brand perception in 2011, which is why we believe it is time to reinvigorate the challenger strategy and to relaunch the brand,”

Despite its smaller budget, T-Mobile ads have seemed to cut through the clutter, thanks largely to Carly, the only current spokescharacter for a mobile carrier who’s easily recognizable.

Ads featuring biker Carly are intended to equate the brand with speed which is the single-biggest thing consumers are looking for in their next smartphone.

Speed?  Yeah, right/

Edited by ARK
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Wanted: trend-setting young professionals who spend at least 14 hours online every week.

March 19, 2012

Punch line: The young, trend-setting, urban professional, who loves entertainment and places a premium on technology is the main target for Verizon’s new hyper local FiOS 50 campaign.

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Excerpted from mediapost.com “Verizon Targets Young Professionals

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Verizon is targeting what it calls “trend-setting young professionals” who live in apartments and condominiums in four major markets via a hyperlocal FiOS campaign …

The multimedia effort was tested in a metro-Washington D.C. pilot last fall and is now being rolled out in the New York, Philadelphia, Dallas/Fort Worth and Los Angeles metropolitan areas.

Many of the hyperlocal campaign elements used during the pilot — including immersive digital advertising combined with social media engagement, plus a concentrated presence of out-of-home advertising and local events with prospective customers — will be repeated in the broader campaign. Gyms, restaurants, bars, movie theatres, malls and transit centers are target venues …

Most 25- to 39-year-olds who make up a significant portion of multidwelling unit tenants are major users of social media and the Internet and spend as much as 14 hours online per week, said Pedro Correa, vice president of Verizon Enhanced Communities …

“Some people think they have to live in a single family home to get the very best broadband and video entertainment services, but that’s not true,” he said in a release.

To assist young professionals in finding MDUs with FiOS, Verizon has created a region-specific microsite at http://www.musthavefios.com that shows the MDUs where FiOS is available in metro New York, Philadelphia, Dallas/Fort Worth, Los Angeles and Washington, D.C. …

Verizon FiOS are available to more than 2 million multifamily units, and growing in parts of 12 states, and the District of Columbia. About half of all Verizon’s FiOS lines opened for sale this year will be in apartments and condos …

Edit by KJM

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Limiting “unlimited” cell phone plans … it’s called “throttling”

March 14, 2012

Late last year, AT&T started slowing down data service for the top 5 percent of its smartphone subscribers with “unlimited” plans — often to speeds slower than AT&T provides to subscribers on limited or “tiered” plans.

When slowed down, the phone can still be used for calls and text messaging, but Web browsing is painfully slow, and video streaming doesn’t work at all.

AT&T’s throttling of “unlimited” data comes as it tries to deal with limited capacity on its wireless network.

When the iPhone was new, AT&T had ample capacity on its network, and wanted to lure customers with the peace of mind offered by unlimited plans.

One ‘throttled’ subscriber took AT&T to court … and won !

Judge Awards IPhone User $850 In Throttling Case

When AT&T started slowing down the data service for his iPhone, Matt Spaccarelli took the country’s largest telecommunications company to small claims court. And won.

His award: $850.

The judge said it wasn’t fair for the company to purposely slow down his iPhone, when it had sold him an “unlimited data” plan.

Verizon Wireless and T-Mobile USA also throttle users, but their policies are gentler.

Verizon only throttles if the specific cell tower a “heavy user” subscriber’s phone is communicating with is congested at that moment.

Thanks to TH for feeding the lead.

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Texting isn’t cool anymore …

June 13, 2011

According to the WSJ:

U.S. cellphone users sent and received more than 1 trillion texts in the second half of 2010 … but, the rate of growth has subsided.

Text traffic will come under more pressure in the months ahead.

Why?

More folks are messaging thru Facebook and IPad owners can use WiFi connections to bypass carriers and send messages over the Internet.

”It’s not cool anymore to SMS.”

Dutch telecommunications company Royal KPN … reported its youth-oriented brand, Hi, saw an 8% decline in outgoing SMS or text messages per customer in the first three months of this year compared with the first quarter of 2010.

So what?

For carriers such as Verizon, the texting business has low costs and high margins.

A dollar of texting revenue produces at least 80 cents of profit compared with about 35 cents of profit from $1 in wireless data or voice services

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Remember when Nokia was the dominant mobile phone manufacturer ?

September 27, 2010

TakeAway: Once upon a time Nokia was the dominant mobile phone manufacturer.  However, it lost sight of one of the critical components of a successful marketing strategy: people.

Rather than objectively applying an understanding of customer needs into its products and marketing programs, Nokia was content to assume that what customers wanted in the past would remain the same.

So while others like Apple and RIMM developed smart phones with innovations that excited customers, Nokia did nothing and has paid dearly for it. 

It’s trying to get back on track, but it might be too late.

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Excerpted from Bloomberg Businessweek, “How Nokia Fell From Grace,” by Matthew Linn, August 15, 2010

What was the most successful European company of the 1990s? Easy: Nokia. The Finnish mobile-phone manufacturer captured the emerging market for mobile phones and built the industry’s most powerful brand. Its handsets virtually defined the industry from the time it launched its first GSM phone … in 1992. From 1996 to 2001 its revenues increased almost fivefold, and by 1998 it was the world’s biggest mobile manufacturer. In 2005 it sold its billionth handset …

Now, what’s the most disappointing company of the 2000s? Easy again: Nokia. The company has been in steep decline—a point underscored by its Sept. 10 announcement that it was hiring its first non-Finn as chief executive officer. …

Since Apple introduced its iPhone in January 2007, Nokia shares have fallen 49 percent. In a ranking of global brands by Millward Brown Optimor this year, Nokia was No. 43, having dropped 30 places in 12 months. …

Recognizing the scale of its challenges, Nokia hired Stephen Elop, the Canadian head of Microsoft’s business unit, to turn the company around. Everyone will wish him well. … if the guy knows so much about phones, he’s kept it a secret. Microsoft has never made any progress in that industry.

The cruel truth is that for all its residual market share, Nokia looks like a has-been. The company misread the way the mobile-phone industry was merging with computing and social networking. And it’s probably too late to turn that around.

There are uncomfortable lessons here. First, success is not a sinecure. Nokia got to the top of its industry quickly. Once there, it became complacent. … Nokia worried about hanging onto market share rather than creating innovative products that excite customers. Second, Nokia was unwilling to challenge itself. The company clung to the idea that handsets were mainly about calling people. It failed to notice that they were just as much about checking your e-mail, finding a good restaurant, and updating your Twitter page. …

Edit by DMG

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Full Article
http://www.businessweek.com/magazine/content/10_39/b4196007421255.htm

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Subscribers tell cellphone companies: Take your 2-year contracts and shove ‘em

May 18, 2010

Bottom line: Folks aren’t giving up their cell phones in a tough economy, but they are looking harder at hidden fees and charges for unused minutes.  More are opting for “by the drink” plans – so that they only pay for what they use.

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Excerpted from AP:  Wireless users opt for service without commitment, May 14, 2010

Together, the seven largest U.S. wireless carriers added just 230,000 contract subscribers in the first quarter. That’s negligible compared to their entire customer base of 280 million.

Prepaid service, meanwhile, attracted about 3.1 million new subscribers to the seven largest carriers in the quarter.

This marks a sharp reversal of trends. In the same quarter just two years ago, the comparable carriers added 3 million subscribers under contract, and 2.3 million to prepaid plans.

The carriers that rank third and fourth in the U.S. by subscriber numbers, Sprint Nextel and T-Mobile USA, are losing contract customers. No. 1 Verizon Wireless and No. 2 AT&T are still adding contract customers, but at the lowest numbers in more than five years.

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Wireless subscribers have been making a big shift away from two-year contracts toward “prepaid” cell phone service, which often costs less and does not require contracts … even though contracts are needed to get popular phones such as the iPhone and the Droid.

One out of every five Americans with a cellphone had a prepaid plan at the end of 2009. In some markets, up to 30% of subscribers are on prepaid plans.

Unlike contract plans that bill subscribers each month for the services they used the previous month, prepaid services traditionally let subscribers buy minutes in advance for around 10 cents to 20 cents each. When the minutes are used up, people “refill” their accounts as needed.

For years, such plans were marketed primarily to people who did not have the credit to qualify for plans with contracts. But as the recession forced more people to cut costs, prepaid service appealed to a broader slice of the market, and prepaid services responded by offering better deals.

Now it’s possible to make unlimited calls and text messages on a prepaid plan for $45 a month – half of what it costs a customer with a contract on Verizon Wireless.

  • The prepaid market heated up in January 2009, when Sprint began offering a prepaid plan with unlimited minutes for $50 a month under its Boost Mobile brand.
  • Tracfone, a unit of Mexico’s America Movil SA, countered with Straight Talk, which provides unlimited calling for $45 per month on Verizon Wireless’ network, sold exclusively by Wal-Mart Stores Inc.
  • MetroPCS and Leap, which sells service under the Cricket brand, have responded by eliminating add-on fees for taxes and roaming, effectively cutting prices. The price war looks like it will continue.
  • Sprint and Wal-Mart Stores Inc. announced a trial of another prepaid plan: Common Cents, which is designed for people who don’t use their phones much. Calls will cost 7 cents per minute.

The popularity of text messaging is also making some people move away from contract plans that provide a big bucket of monthly minutes that may not get used.

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Full article:
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/14/AR2010051401345_pf.html

What’s an iPhone without AT&T? … a hot-selling iPod Touch.

January 4, 2010

Punch line: While Apple’s iPhone grabs headlines, the cheaper iPod touch keeps gaining devoted fans … thanks to strong functionality and, well, no dependency on AT&T.

Trend to watch: As my students know, I’m very critical of cell phone service — dead spots, crackling reception, dropped calls, slow upload / download speeds.  Wonder if iPod Touch (and Apple’s tablet to follow) will give a super-boost to WiFi coverage and obsolete cell phone technology.  Hmmm.

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Business Week: iPod Touch’s Holiday Sales Spike Likely Beat the iPhone’s, December 30, 2009

Ever since Apple introduced the iPhone in the summer of 2007, it has been hailed as one of the most revolutionary products in tech history. By comparison, the iPod touch, which has all the iPhone’s features without the cell phone, has been downright publicity-starved.

But this holiday season, it seems the thinner, cheaper iPod touch may be Apple’s breakout hit …  iPod touch sales soared more than 100%, to 7.2 million, in the final quarter of 2009, while iPhone sales rose 53%, to 11.3 million.

Post-Christmas, the number of apps downloaded onto … iPod touches surpassed the iPhone. “It wasn’t just that the iPod touch barely squeaked by … It blew the doors off the iPhone—and overnight.”

The iPod touch can do pretty much anything an iPhone can do, and for a lot less money. It features the same slick multi-touch interface and can run almost all the 100,000-plus programs in Apple’s App store. The device has taken the portable gaming market by storm

The main difference is that the iPod touch does not work over cellular networks, so owners must be within striking distance of a Wi-Fi hotspot to go online or download apps. But Wi-Fi is available in most homes, offices, airports, and coffee joints, either for free or for a few bucks—but it costs nowhere near the monthly $100 of an AT&T contract.

This year, iPod touch sales may be getting an extra boost from the travails of AT&T, the exclusive carrier of the iPhone in the U.S.

Because of Ma Bell’s network problems, including frequent dropped calls and spotty Net access in cities such as New York and San Francisco, many consumers are opting to carry a new iPod touch along with their old cell phone rather than rely on an iPhone. Many users carry a BlackBerry  for email and making calls, and an  iPod touch for running apps and going online.

Some folks may soon be tempted by Apple’s much-rumored tablet device. Sources expect the tablet device to be roughly three times the size of an iPhone, making it well-suited for playing games, running apps, and reading e-books or online newspapers. The device may also rely on Wi-Fi, allowing Apple to further distance itself from AT&T’s service woes.

Full article:
http://www.businessweek.com/magazine/content/10_02/b4162022078079.htm

UG2BK … No, I’m not !

August 13, 2009

As text-messaging shorthand becomes increasingly widespread in emails, text messages and Tweets,  a working knowledge of text-speak is becoming de rigueur.

NetLingo.com says there are more than 2,000 shorthand texting terms and counting

Here’s a sampling of some of the most common ones: .

  • UG2BK . . .You got to be kidding
  • GBTW. . . .Get back to work
  • NMP . . . . Not my problem
  • PIR . . . . . Parent in room
  • GFTD. . . . Gone for the day
  • FYEO. . . . For your eyes only
  • BI5 . . . . . Back in five minutes
  • DEG . . . . Don’t even go there
  • BIL . . . . . Boss is listening
  • PAW. . . . Parents are watching
  • 99 . . . . .  Parents are no longer watching
  • PCM . . . . Please call me
  • IMS. . . . . I am sorry
  • TOY. . . . . Thinking of you
  • KUTGW. . . Keep up the good work
  • CID . . . . . Consider it done
  • FWIW. . . . For what it’s worth
  • HAND . . . Have a nice day
  • IAT . . . . . I am tired
  • NRN . . . . No response necessary
  • 4COL. . . . For crying out loud
  • WRUD. . . What are you doing
  • LMIRL. . . Let’s meet in real life
  • ^5 . . . . . High five

Excerpted from WSJ,Quick! Tell Us What KUTGW Means, Aug 6, 2009 
http://online.wsj.com/article/SB10001424052970203674704574328920789548170.html

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Dear friends networking on cheap phones … works for me.

June 5, 2009

Excerpted from WSJ, “Networking Sites Extend Reach:  Handset Makers Ramp Up Ways to Tap Broader Cellphone Market” by Amol Sharma and Jessica E. Vascellaro, May 28, 2009

Social-networking sites like Facebook and MySpace are popular services on high-end cellphones like the iPhone and the BlackBerry. But extending their reach to the broader wireless market has been challenging, because most basic phones tend to have clunky Web browsers and can’t support fancy software. Now, handset makers and wireless carriers are ramping up efforts to tap the mass market.

Manufacturers such as INQ Mobile Ltd. and Samsung Electronics Co. are rolling out midrange cellphones tailored to social-networking software, with some features of smart phones but lower prices.  Carriers including AT&T Inc. and Sprint Nextel Corp. are trying to improve access to the services by upgrading browsers on regular cellphones and integrating Web-based applications …they are trying to improve access to the services via the Web, which allows users to perform tasks they can’t perform with text messaging, such as viewing a friend’s profile. Sprint, for example, will soon begin selling the Samsung Exclaim, which will include one-click access to simplified, preloaded software applications for Facebook, MySpace and Twitter. It will sell in the U.S. for less than $100 after a rebate, the company said. AT&T is undertaking a project to overhaul its mobile home page, better integrate search and use an advanced browser…

Social networks, including MySpace and Facebook, are helping wireless carriers tailor their services to mass-market phones…

 

Edit by TJS

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Full Article:
http://online.wsj.com/article/SB124345957503159855.html

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Skype Steps Into Business Seeking New Sources of Revenue

April 3, 2009

Excerpted from WSJ, “Skype Targets Businesses to Ring Up New Revenue” By Geoffrey Fowler, Mar 23, 2009 

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EBay’s Skype Internet phone unit, on the hunt for new sources of revenue, is making a push into the corporate market.

Skype plans to announce a version of its Internet calling software that connects to corporate phone systems. The new software is expected to allow employees to make domestic and international calls using regular office telephones, instead of a headset plugged into a personal computer. Initially, the company will charge about 2.1 cents per minute for calls to cellphones and fixed lines, but calls from computers to phone systems using the Skype software will be free, similar to what it now charges for its consumer service.

The company is known for allowing users to make free voice and video calls between computers, using a technology called VOIP, for voice over Internet protocol. Though the majority of users are consumers, the company says about 35% of its customers already use the service for business purposes.

Now the company is hoping to appeal more directly to small and medium-sized businesses, which may be particularly receptive to lowering their phone bills during the recession … Its new product is called Skype for SIP. The acronym stands for Session Initiation Protocol, a technology used by many business phone networks …

Skype’s announcement comes as parent company eBay — which bought Skype for $2.6 billion in cash and stock in 2005 — faces pressure from investors to make more money from Skype or sell it. The company brought in $550 million in revenue last year, mostly from services such as paid calls to regular phone lines and voicemail.

Its new effort faces plenty of competition in what some analysts estimate is a $200 billion business communications market … Skype argues that its 405 million users give it a leg up in the business market. It points to customers like Steve Mandel, founder of a management training and consulting company, who says his 65 employees use Skype to keep in touch with each other and with clients. “If Skype didn’t exist, our phone bills would be I’m guessing 50% to 100% higher than they are now,” he said.

Skype has been controversial with some technology managers. Though the service seems to be free … mitigating potential security risks posed by the software, since it involves the Internet and often requires software updates, “involves operational and support costs.” Skype insists that its software is secure, and has developed tools to make sure all the computers at a company are using the same version of its program.

As part of the move to attract business users, the company is trying to change its image — including its logo, which used to feature a guitar and rainbow. “Customers told us, ‘How can we take you seriously when you look like an Abba album from 1976?'” said Mr. Oberg. “A lot of the features that we have sold to consumers in a certain way need to be sold to business in another way.”

Edit by SAC

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Full Article:
http://online.wsj.com/article_email/SB123776338990608661-lMyQjAxMDI5MzI3MzcyNjMzWj.html

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Telecom: Banking on Mobile Banking to be a Killer App …

March 10, 2009

Excerpted from Marketing Daily, “Mobile Banking May Be Telecom’s Killer App” by Aaron Baar, Jan 23, 2009

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With increasing consumer familiarity and growing ease of use, mobile applications for financial services companies–particularly banks–could become the new “killer app” for telecommunications.

The number of people banking through a mobile device could hit half a billion worldwide by 2013 … “Mobile financial services have the potential to be bigger than mobile TV and premium mobile content in terms of numbers of subscribers” …

The drive for more and better mobile financial services applications is being fed by consumers who are becoming more accustomed to banking online. “The lowest-hanging fruit are the online customers … That’s one of the only barriers to mobile banking; if you don’t trust online, you won’t trust mobile.”

But just as customers are using online banking for uses beyond simply checking their accounts, they will begin to use their mobile devices for those purposes as well. “The growing parts will be more sophisticated applications like bill payment” … But banks will have to work on making the mobile experiences as simple and user-friendly as the online services.

Increasing numbers of customers–particularly younger ones–are learning to trust the online space for their banking, and mobile will quickly follow. “Generation Y expects mobile to be part of what they’re doing, and banking is no different,” …

In the U.S., the mobile banking leader is Bank of America … The bank launched its mobile service in May 2007, and by the end of 2008 it had 1.5 million subscribers. “It’s a growing segment, and it’s being led by Bank of America” …

Edit by SAC

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Full Article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=98908

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Listen Up … Better Yet – Watch Those Cell Phone Bills

February 25, 2009

Excerpted from Marketing Daily, “Group Cautions on Cell Phone Contracts,” by Aaron Barr, Jan 30, 2009

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As family budgets tighten and the recession deepens, watchdog group Consumer Action is encouraging consumers to watch out for hidden fees and penalties when it comes to cell phone contracts.

“As more and more Americans shift their phone use to cell phones, the costs and pitfalls associated with contract-based cell phones become clearer and clearer … In this new year, consumers … need to be more careful than ever about avoiding paying more than is necessary for cell phone service.”

According to the group, consumers should watch out for five issues in particular over the course of 2009. At the top of the list are early termination fees that occur when someone tries to break a pre-determined contract … 

A second issue comes from mandatory contract extensions that come when one tries to replace a lost or broken phone, which can be an increasingly significant issue as teen and tween cell phone use continues to rise. “Many consumers learn the hard way that there’s a catch when you try to replace a lost or broken cell phone–your contract may start all over again from scratch on the phone–even if you’ve been paying faithfully each month for replacement insurance” …

The group also advised consumers to watch out for overage fees when exceeding monthly limits on contracts and texting fees associated with their cell phone accounts. And the group warned immigrants to pay close attention to the rules on international calling cards. Many of the fees are not disclosed or are only disclosed in very small print on the back of the card.

“Even though limited progress has been made on some contract-based cell phone billing and disclosure issues, there are still many problems that will continue to confuse and mislead consumers in 2009 … Our goal here is to help shine a spotlight on some of the least understood problem areas” … 

Edit by SAC

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Full Article:
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=99369

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Sprint offers unlimited calls, no contracts … for half the price

February 16, 2009

Excerpted from the Wall Street Journal, “Sprint Prepay Plan Pressures Cell Rivals”, by Roger Cheng, January 16, 2009

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Sprint Nextel’s Boost Mobile plans to offer an unlimited nationwide calling plan for $50 a month, a bid by the youth-oriented wireless service to severely undercut rivals.

With the cheaper plan, which is half the cost of the $99 unlimited plans offered by the major carriers and $10 cheaper than similar unlimited plans offered by local competitors, Boost is hoping to go after budget-conscious consumers.  It represents an aggressive move by Sprint to attract customers even as its own core wireless service continues to lose subscribers.

In addition to unlimited calling, customers will get unlimited text messages, mobile Web surfing, and a walkie-talkie feature. Customers aren’t locked into a contract, and can leave at any time.

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Industry watchers speculate whether the move could spark a price war in the cut-throat wireless industry.

The major carriers offer unlimited calling for $99, but those plans typically require a one or two year contract.

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People looking to join Boost Mobile will have to switch to the Nextel network which means buying a new phone not compatible with other. Phones run between $20 and $100, and there are a limited number of choices, all from Motorola. Because there are no contracts, there are no subsidies for the handsets.

Edit by DAF

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Note: It is not mentioned in this article, but Sprint’s Boost network is an older network, significantly slower than Sprint’s current network, and does not allow for any of the new 3G features like GPS navigation.  For a customer concerned only with making/receiving calls and even texting, though, though, this could be an interesting proposition.

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Full article:
http://online.wsj.com/article/SB123199251112984943.html

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Make cell calls from anywhere in the house? … now, that’s progress!

January 27, 2009

Ken’s Take: One of my many hot buttons is awful cell phone coverage.  I get spotty reception in some parts of my home; no reception in others.  What other product has to be taken outside to work right?  Finally, mobile companies are fixing the basics.  Now, if they can only get the price down to $29.99.

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Excerpted from Forbes.com, “Verizon offers $250 in-home cell phone booster”, AP, 01.26.09

Verizon Wireless has started selling a book-sized device that boosts cell phone signals within a home for $250, making it easier for people to drop a home phone line and rely solely on wireless.

The Verizon Wireless Network Extender needs to be connected to a broadband Internet line. Then it acts a miniature cellular tower, listening for signals from a subscriber’s cell phone. It covers up to 5,000 square feet, the company said Monday.

Full article:
http://www.forbes.com/feeds/ap/2009/01/26/ap5963881.html?partner=alerts 

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Now, it's the phone, not the carrier calling the shots …

January 5, 2009

Excerpted from Business Week, “How Apple’s iPhone Reshaped the Industry”, December 11, 2008

Today, apps are where the action is, and consumers are reaping the benefits

A few years ago, if someone asked what sort of cell phone you had, your response would probably be to name a network, like Sprint or Cingular. Wireless carriers so completely controlled the business, especially in the U.S., that many manufacturers weren’t even allowed to put their brand names on handsets. Now this relationship is changing in ways that will reduce the power of carriers and, with luck, increase consumers’ choices.

The relationship started to shift when people began using phones for more than voice calls and text messages. As browsers and e-mail systems became important, it mattered more whether you had a Palm Treo or a BlackBerry than whether your phone ran on the Verizon Wireless or AT&T network. Then along came Apple’s iPhone to rewrite the rules completely.

The conventional wisdom holds that AT&T scored a coup when it signed on as the exclusive U.S. iPhone carrier. The company reported that it activated 2.4 million of the new 3G iPhones in the third quarter, that 40% of those customers came to AT&T from rival operators, and that their average monthly bill was 1.6 times that of other subscribers.

But the impact on AT&T’s bottom line is another story. Mostly because of the fat subsidy it pays Apple for each iPhone, AT&T’s third-quarter earnings of $3.2 billion were $900 million less than they would otherwise have been.

More importantly, the carrier has probably lost forever its ownership of the customer, through a process economists call “disintermediation.”

Before the iPhone, relatively few owners of any phones—smart or dumb—downloaded applications. The carriers had a nice business selling ringtones and the odd game. But with iTunes and the App Store, Apple became the exclusive supplier of applications as well as music and videos. The content suppliers got about two-thirds of the revenue, Apple kept about a third, and the carriers were frozen out.

A key test of the new relationship between handset makers and smartphone software publishers, carriers, and customers will arrive when turn-by-turn driving instructions come to the iPhone. Apple seems to have created the phone with navigation in mind. Rumors are flying that Apple plans a navigation offering that leaves carriers in the cold.

This shift in power is a bad thing for wireless carriers, whose nightmares of being turned into commodity sellers of bandwidth are coming true. But it may be a win for everyone else.

Full article:
http://www.businessweek.com/print/magazine/content/08_51/b4113078121012.htm 

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Now, it’s the phone, not the carrier calling the shots …

January 5, 2009

Excerpted from Business Week, “How Apple’s iPhone Reshaped the Industry”, December 11, 2008

Today, apps are where the action is, and consumers are reaping the benefits

A few years ago, if someone asked what sort of cell phone you had, your response would probably be to name a network, like Sprint or Cingular. Wireless carriers so completely controlled the business, especially in the U.S., that many manufacturers weren’t even allowed to put their brand names on handsets. Now this relationship is changing in ways that will reduce the power of carriers and, with luck, increase consumers’ choices.

The relationship started to shift when people began using phones for more than voice calls and text messages. As browsers and e-mail systems became important, it mattered more whether you had a Palm Treo or a BlackBerry than whether your phone ran on the Verizon Wireless or AT&T network. Then along came Apple’s iPhone to rewrite the rules completely.

The conventional wisdom holds that AT&T scored a coup when it signed on as the exclusive U.S. iPhone carrier. The company reported that it activated 2.4 million of the new 3G iPhones in the third quarter, that 40% of those customers came to AT&T from rival operators, and that their average monthly bill was 1.6 times that of other subscribers.

But the impact on AT&T’s bottom line is another story. Mostly because of the fat subsidy it pays Apple for each iPhone, AT&T’s third-quarter earnings of $3.2 billion were $900 million less than they would otherwise have been.

More importantly, the carrier has probably lost forever its ownership of the customer, through a process economists call “disintermediation.”

Before the iPhone, relatively few owners of any phones—smart or dumb—downloaded applications. The carriers had a nice business selling ringtones and the odd game. But with iTunes and the App Store, Apple became the exclusive supplier of applications as well as music and videos. The content suppliers got about two-thirds of the revenue, Apple kept about a third, and the carriers were frozen out.

A key test of the new relationship between handset makers and smartphone software publishers, carriers, and customers will arrive when turn-by-turn driving instructions come to the iPhone. Apple seems to have created the phone with navigation in mind. Rumors are flying that Apple plans a navigation offering that leaves carriers in the cold.

This shift in power is a bad thing for wireless carriers, whose nightmares of being turned into commodity sellers of bandwidth are coming true. But it may be a win for everyone else.

Full article:
http://www.businessweek.com/print/magazine/content/08_51/b4113078121012.htm 

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AMS: Cutting Cell Phone Churn

December 3, 2008

Excerpted from the McKinsey Quarterly, “New ideas for customer segmentation”

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Customer life-cycle management, though a likely and proven strategy, presents a vexing challenge to prepaid mobile operators. They often resort to blanket promotions that risk destroying value by needlessly cutting prices or offering free services.

One alternate way is for marketers to look more closely at their billing systems, which contain a wealth of information; to create segments, often as small as 100,000 subscribers; and to plan tailored promotions for each group.

The exhibit below illustrates one prepaid mobile operator’s strategy to reduce churn rates by segmenting subscribers through their usage patterns. Tracking the number of days before a customer is “lost” helped the company to introduce promotions most likely to increase usage and retention while minimizing revenue lost to scattershot offers and unnecessary discounts.

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Edit by DAF

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Full article:
https://www.mckinseyquarterly.com/newsletters/chartfocus/2008_11.htm

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