T-Mobile has begun testing a new landline VoIP offer in a couple of US cities, offering unlimited calls for $10 a month (consumers have to buy a $50 Wi-Fi router that’s got some jacks for the landlines, and of course, supply their own broadband connection). A further sign of how mobile operators are racing to the bottom in terms of pricing. While this is just a trial, should T-Mobile roll it out nationwide, it’s easy to see them bundling it in to their recently announced $100/month unlimited mobile plan.
It’s sort of hard to get too excited about developments in the landline space, but this is pretty amusing. What really makes me smile is that operators like Verizon and AT&T — whose parent companies are legacy landline telcos — have touted their ability to offer consumers bundles of services, combining landline and mobile service as a key advantage. T-Mobile has no legacy landline infrastructure, but that’s a benefit rather than a curse, since they can instead offer VoIP service more cheaply than the incumbent’s landlines. It’s also interesting from an FMC standpoint: once T-Mobile gets its router into customers’ houses, getting them to start using its Hotspot @Home service for Wi-Fi calls becomes a rather simpler upsell.
Still, the landline’s days are numbered. That said, I’ve still got one from the cable company, mainly so I can send and receive faxes — another technology that, despite its shortcomings, remains annoyingly in use today. But if T-Mobile made this service available nationwide, I’d probably take the plunge, and I imagine many of its other customers — or at least those who are hanging on to their landlines — would as well.
So, the market seems to be dictating a price of $100 per month for unlimited mobile service, and $10 per month for unlimited landine service. But watch this space, as those are going to fall quickly in the coming months.
If you’re in the UK and looking for mobile development work, there are some openings with a couple of good companies. Trutap is looking for Perl developers, QA techs, Product Managers and sys admins; our pals over at Future Platforms are looking for people with solid Java skills to grow their engineering team.
I’ve written a few times about Nassim Nicholas Taleb’s book The Black Swan. It’s one of those seminal books that everyone should read, or certainly be aware of the basic ideas that Taleb writes about. It manages to be both scholarly and readable and its implications are far wider than just “business”.
A few weeks back, I wrote about getAbstract, who specialise in summarising leading business books into just 5 pages and how they do this remarkably well. When they asked me to choose an abstract to make available to MobHappy readers for free, The Black Swan sprang immediately to mind. I hope you enjoy it - the link will only work for a month, so click here now to download the PDF.
Now when I whitter on about Black Swans, you’ll know what I really mean. Many thanks to getAbstract for making this available to MobHappy readers.
“Stratellites” — giant blimps that could supposedly deliver wireless broadband to land masses the size of Texas — were, for a long time, my favorite BS broadband idea. The obvious pun, that the company behind them was full of hot air, was irresistable. A close second was the concept of putting reusable balloons in the air, where they’d stay for about a day, then fall to earth, where people would retrieve them for a $100 bounty. Like the stratellites, it’s been talked about for a long damn time, but has never really gotten off the ground. The company behind the balloons says it launches 10 of them a day to provide telecom services to truckers and oil companies in the southern US, but in terms of widespread public services, nothing. The challenges of the business and its technology are pretty clear, but the idea just won’t die, and it pops back up every year or so in one for or another.
Now, WSJ claims to have found “people familiar with the matter” that say Google is interested in the idea, and is even thinking of buying the company. The sourcing on this story is, uh, tenuous at best, but of course the CEO of the balloon company doesn’t do anything to downplay the “rumors”. Om Malik hits the nail on the head with his skepticism and his warning that if this actually does prove to be true, it would appear that Google’s got more money than sense these days.
I guess the bottom line is that if you’ve got some wireless broadband tech — and the wackier the better — start making noise that Google’s interested in it, ’cause people will apparently believe anything in the space these days.
Also, if you need to exercise your skepticism muscles (or to test your bullshit meter), check out the comments on Om’s post, featuring gems like this one:
I think that micro satellites will be a better bet. These are about the size of a Coke can, and can be put into GS orbit for about 1/16th the cost of typical data birds. There are several companies that have already flown prototypes, and the industry as a whole is waiting for the private launch revolution to catch up with the business case.
Following yesterday’s post about three US operators announcing flat-rate voice plans, today brings news of the fallout in the market. Many Wall Street analysts speculate that Sprint will undercut the other operators and could offer unlimited voice calls for as low as $60 per month in a bid to stem its subscriber losses. Such a move would virtually guarantee a mobile price war, and further hasten the overall move among the US population away from landlines as well.
The bigger overall effect would be just to hasten the total commoditization of voice service — and increase the immediate need to boost data and content spending.
We’re in for an interesting year, I think.
Last week, Starbucks announced that it was dropping T-Mobile, in favor of AT&T, as the Wi-Fi provider for more than 7,000 of its US locations. Along with the change of vendors comes some pricing changes — AT&T DSL and fiber customers will get free access at Starbucks, while anybody that uses a Starbucks stored-value card and spends at least $5 a month will get 2 hours of free service per day. That’s quite a change from T-Mobile’s $6 per hour/$10 per day/$30 per month.
I’ve long argued that Starbucks should free up its Wi-Fi, and stick to the business of selling coffee and all the other stuff they’ve got, and this move is certainly a big step towards that. But it’s also a nod to the realization that the paid Wi-Fi model is, for the most part, doomed by the rise of cheap 3G data service. The small number of people who pay for Wi-Fi will see little reason to keep paying for it when they can get real mobile data service for roughly the same cost, or less. (Sure, some paid hotspots in premium locations will continue to exist and even thrive, like overpriced airport food.)
I’ll be optimistic and say that this thinking played at least some role in AT&T and Starbucks’ strategy, though at $60/month, AT&T’s own 3G data plan for laptops probably remains a little pricey to be hurting too many paid Wi-Fi services just yet. But the point is that the day of cheap, ubiquitous mobile connections for laptops for anybody who wants them is coming, and is coming fairly quickly.
We talk about flat-rate data plans all the time, but on Tuesday, three US operators announced flat-rate voice plans. For about $100 a month, subs on Verizon, AT&T and T-Mobile can now get unlimited national calls, and T-Mobile will throw in unlimited SMS and MMS to boot. Sprint had announced trials of a flat-rate plan earlier this month, while MVNO Helio has offered its “all-in” plan (which includes unlimited data) for a while.
The price, at two times or so ARPU, will keep this a niche offering for the time being, but it’s hard not to see the price falling and flat-rate voice calling becoming the norm in the US, especially given the proliferation of cheap all-inclusive fixed-line VoIP plans as well as unlimited local plans from operators like Cricket and Metro PCS.
The way the announcement of these plans went down — with three of the country’s biggest operators putting them out on the same day — says a lot about the commodity status of voice service in the US, as well as the level of competition in the market. When voice service carries a fixed, flat cost that’s essentially the same across the market, how will operators differentiate? Network quality remains one area, but that will eventually move to parity as well. Access to data and content services looks like a more likely space as operators look to draw in users with new apps and services and reduce churn of their existing ones. Operators’ existing models for delivering content and services move slowly and, in general, do little to create customer loyalty or draw in new users. If operators are happy to become so-called dumb pipes for voice, will data be any different?
M:Metrics‘ latest coverage reports mixed news for mobile game companies. The bottom line is that while there are more mobile gamers than ever, the number of people who have actually downloaded a game to their phone is fairly static.
Drilling down a little, the percentage of people who had played a mobile game ranged from 14% in France to 28.7% in the UK, with other the markets of US, Spain, Italy and Germany somewhere in between. Whereas only 4% and 10.6% had played downloaded games in France and the UK.
There could be a number of reasons for this and M:Metrics mention one big bugbear in their press release - the already huge availability of pirated and free downloads already available. Mobile game playing tends to be about casual gaming and a version of Solitaire knocked up by some student in China is likely to be just as good as a fully produced one in some gaming studio - production values aren’t that important.
But it’s not just piracy that’s at work here, surely? One reason will be the (still) relatively high cost of data in many markets. Meaning that you pay once for the game and then the operator charges a fortune to deliver it.
Another reason is certainly marketing. I know from AdMob that users will download applications and games in their tens of thousands, if they’re very clear on what they’re getting. So vague descriptions and confused propositions lead to a very obvious lack of response.
But the good news for the mobile gaming industry is that there’s plenty of potential here. They just need to spell out to the phone owner why they should purchase and then make the download experience easy and cheap.
There’s quite a big “just” in the previous sentence. But it can be done.
Mobile World Congress was a bit of a washout for MobHappy. Carlo already wrote about the shrimp wot did for him. In my case, I had about 10 meetings a day, plus the parties to handle. If that wasn’t enough to prevent blogging, no access to wifi in my apartment hammered the nail into the posting coffin.
But it was great to catch up with everyone and meet so many new faces - lots of people seemed to read MobHappy too, which is always an added bonus. I won’t mention any names here, as I’ll be bound to leave a few out.
One theme that Carlo noticed, and I’d endorse, was the low profile of the mobile operators and to an extent, the lack of dominance of the handset manufacturers this year. It was much more about services, content and applications than I can remember, as well as loads of companies trying to jump on the mobile advertising bandwagon. Some of them may well succeed, although I really didn’t see any that I’d bet the farm on at this late stage.
In particular, there were many companies starting, or refocusing, to provide advertising “solutions” for mobile operators, mainly multi-channel adserving platforms. I’m not sure of the wisdom of this approach for a number of reasons.
Firstly, there’s already giants (like Acision - the ex-Logica company) and relatively successful startups (like Amobee) in the space. So what another giant or nimble startup has to offer is debatable.
Then we have the question about whether launching a company reliant on the lengthy and opaque buying cycles of mobile operators makes a lot of sense. On top of that, it’s clearly going to be a commoditized market pretty quickly, which personally, I don’t find attractive.
But the final concern is that I believe that the days of a channel being dominated by operators are really over and that’s what the show overall reflected. That isn’t to suggest that mobile operators won’t find a valid role in the mobile advertising value chain. It’s just that, unlike a few years ago, they aren’t the only route to market nowadays and I’m surprised that more companies aren’t trying to take advantage of that.
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