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iPhone Defections Good for AT&T, Better for Wireless Broadband
Of those people that purchased the new Apple 3G iPhone this summer, some 30 percent of them defected to AT&T from other networks, according to a report out today from analysis firm The NPD Group. With about 23 percent of people switching carriers between June and August, that’s a lot of churn, but since two-thirds of the AT&T iPhone newcomers came from Verizon (47 percent) or Sprint (19 percent), both of whom have good 3G networks, my guess is defectors were seduced by getting comparable speeds on a hot phone now available at a reasonable price.
When the iPhone launched on the pokey EDGE network last year, the Apple faithful flocked to the device, but the slow network triggered a flood of complaints. The newer version launched in June (and went on sale in July) with a lower price tag and faster speeds. I imagine a mix of the two is what tempted those on the fence, and made the iPhone 3G the top-selling smartphone during the summer months, according to NPD. It was followed by the BlackBerry Curve, BlackBerry Pearl and the Palm Centro.
That is mostly good news for consumers, who are making clear to carriers that network quality and ability to get online are important to them. Now that carriers recognize how much consumers value the 3G experience, expect to see more phones optimized for web surfing — and more network upgrades. However, the price sensitivity means that carriers aren’t likely to abandon the subsidized handset model anytime soon, which gives rise to evils like two-year contracts and high termination fees. This might feel bitterly ironic to those consumers who held off on the iPhone for a year because they were waiting for a better network. So far, many find the actual AT&T network and iPhone experience disappointing.
Mobile TV Is Dicey in Europe, Too
Figuring out how to get wireless subscribers to watch and pay for over-the-air television on their mobiles is a problem in the U.S., and apparently it isn’t doing well in Europe either. But instead of asking if people actually want to watch broadcast TV on their mobiles (or would rather just stream it from the web), Europeans are questioning whether they chose the correct technical standard.
Today Italian wireless provider 3 Italia has said it is expanding its three-year-old mobile television offering with more equipment from Alcatel-Lucent that uses the DVB-H technical standard for mobile broadcast. This only caught my eye because an EETimes article earlier this week pointed out that failed DVB-H launches in Germany could throw the entire DVB-H standard into doubt on the continent:
“France will be the final litmus test for DVB-H,” predicted Alon Ironi, CEO & president at Siano Mobile. “If it doesn’t make it big time there, I am not sure of DVB-H’s future.” Siano (Netanya, Israel) is a supplier of multimode mobile TVchips that include DVB-H, DVB-T and China’s CMMB.
I suppose 3 Italia’s 8 million mostly youthful entertainment driven subscribers aren’t enough to prove DVB-H works. Here in the U.S. the de facto standard is Qualcomm’s MediaFLO technology, which AT&T and Verizon are using. When AT&T chose MediaFLO in early 2007, that was the nail in the coffin for DVB-H in the U.S. and prompted the U.S. DVB-H provider to shut down. But given that mobile TV still isn’t bringing in a large audience in Europe or the U.S., questioning the technical standard might not solve the problem. Perhaps carriers should ask themselves if people want mobile TV at all.
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Verizon, Your Hypocrisy is Showing
I happened across a post on Verizon’s Policy Blog this afternoon and had to chuckle. The entire post is an effort to refute statistics used by organizations that claim the U.S. is falling behind in speed or has really pricey broadband compared with other nations. We all know that statistics can lie, but this particular diatribe is hilarious coming from a company that has stood in the way of collecting meaningful broadband data for years, most recently by suggesting the government pay a nonprofit to collect it. From the Verizon post:
The statistics cited regarding broadband speed, penetration and pricing are confusing, often compare apples and oranges, and in most cases don’t measure really important factors such as who is deploying next generation technologies most rapidly. Mark Twain had a very earthy saying about statistics - “There are lies, damn lies, and statistics”. He meant this as a humorous observation about how easy it is to assume numbers are always right. But it is not the numbers per se but rather how they are used and how comparisons are made that is key.
So while the post knocks the numbers and reports available, Verizon, AT&T and other carriers know the penetration, costs and speeds of most of the broadband users in the nation — and continue to fight giving out those numbers. So, to Mark Twain’s “earthy” aphorism I would add, yes, there are lies, damned lies and spin.
8 Things to Know About the 700MHz Auction
The 700MHz auction kicks off today, and like kids waiting for Santa Claus, the technology and business publications are tense with anticipation. But FCC chairman Kevin Martin is keeping a lid on this auction, rather than post periodic updates as was done in the AWS auction in 2006.
While you wait to learn who gets the goods who gets a lump of coal, here’s a quick list of everything you need to know about the upcoming auction and why it matters. Check out all the links, because the bidding doesn’t conclude until March 24 and down payments aren’t due until April 11. You’ve got time.
- Setting the rules for this auction took a lot of time — and lobbying.
- There are a lot of bidders: Out of the 214 of them, the big ones to watch are AT&T, Verizon and Google. Interesting no shows are Sprint Nextel and Time Warner.
- It costs a lot to bid: Reserves are set high at $10 billion, but several people think that the current economic crisis might make it hard for those reserves to be met. Heck even Google has seen $16.15 billion lopped of its market cap so far this week.
- Already some have failed. Both Frontline Wireless and Cyren Call, both of which were going after the “D” block of spectrum and its heavy load of public safety requirements, have already bailed.
- Google is bidding, but may not be playing to win against the carriers.
- The winners have to create an open network. The dream of having a network that would allow any device onto it is still alive.
- Or maybe not. Om would like to see the spectrum become unlicensed and treated much like Wi-Fi is today for it to be truly open.
And like childhood obesity, short attention spans and the general decline of Western Civilization, you can blame all of this controversy on television — the shift from analog to digital TV signals, to be exact.
Yahoo’s Baby Steps to Phone 2.0
Champions of a more open Internet could take a small bit of cheer from Yahoo’s plans, unveiled today, to open up its mobile platform to third-party developers. But the lack of a service-provider partner to endorse the idea is one clear sign that chief Yahoo Jerry Yang and all the other exclamation-pointers have a long way to go before they can expect to have a major impact on the growing market of the mobile web.
To be sure, plans like Yahoo’s Go or Google’s Android, which aim to bring the power of the open Internet to your handheld device, seem a preferable future than locked-in services like Verizon’s VCast. But without a service-provider partner to watch its back, Yahoo (YHOO) seems unable to answer a big looming question for open-Internet apps accessed via a cellular phone: How fast will the app perform, and how much will it cost to download the data?
Here at CES this year, there’s evidence of a trend toward more single-purpose devices or agreements (like Sony’s Skype/PSP deal, which has BT as the phone power behind it) that are complete with the service necessary to deliver the goods.
On the video side, LG has an interesting plan to give existing broadcasters a mobile outlet, just another one of the competing methods arising to bring TV to places you never thought possible. But like Yahoo’s ideas, such plans don’t mean a whole lot unless the service providers play along.
Since we weren’t able to view the Yang speech live here at CES (long bus lines and the absence of transporter technology kept us from getting from the Sands to the LVCC in time), we weren’t able to question Yahoo folks afterwards about service-provider buy-in for Go 3.0. But there’s plenty of time ahead for answers.
Paul Kapustka, former managing editor for GigaOM, now has his own blog at Sidecut Reports.
AT&T Changes its ‘Terms of Service’
[Update: AT&T Statement Text] Remember the brouhaha about AT&T (T) and Verizon (VZ) and the awkward language in their user agreements that prevented people from among other things criticize them. (As Bill Maher says, I kid the phone companies.) AT&T, seems to have taken the feedback from blogs and is changing the language of its terms of service. An AT&T spokesperson emailed us with the following statement.
We are revising the terms of service to clarify our intent. The language in question will be revised to reflect AT&T’s respect for our customers’ right to express opinions and concerns over any matter they wish. And we will make clear that we do not terminate service because a customer expresses their opinion about AT&T. STATEMENT ON UPDATE TO AT&T INTERNET TERMS OF SERVICE “AT&T will clarify the language in its Internet Terms of Service agreements to reiterate the company’s commitment to freedom of speech and open dialogue…whether that be via the Internet or elsewhere on the AT&T network. AT&T’s Terms of Service follow the company’s longstanding respect for our customers’ freedom of speech, and clarifies that we will not terminate or suspend a customers’ Internet access service based upon their political views or criticism of AT&T. Our Terms of Service and Acceptable Use Policy are designed to protect our customers, the public, and our network and the facilities used to provide service. As a responsible corporate citizen, we will review any complaints surrounding material that’s in violation of the law, compromises our network, or is abusive or otherwise threatening to the safety of any individual or group. Specifically, the adjusted language will read: 5.1 Suspension/Termination. AT&T respects freedom of expression and believes it is a foundation of our free society to express differing points of view. AT&T will not terminate, disconnect or suspend service because of the views you or we express on public policy matters, political issues or political campaigns. However, AT&T may immediately terminate or suspend all or a portion of your Service, any Member ID, electronic mail address, IP address, Universal Resource Locator or domain name used by you, without notice, for conduct that AT&T believes (a) violates the Acceptable Use Policy; or (b) constitutes a violation of any law, regulation or tariff (including, without limitation, copyright and intellectual property laws) or a violation of these TOS, or any applicable policies or guidelines. Your Service may be suspended or terminated if your payment is past due and such condition continues un-remedied for thirty (30) days. Termination or suspension by AT&T of Service also constitutes termination or suspension (as applicable) of your license to use any Software. AT&T may also terminate or suspend your Service if you provide false or inaccurate information that is required for the provision of Service or is necessary to allow AT&T to bill you for Service. We feel that the clarifying language better reflects our actual long-held policy, which respects AT&T’s customers’ rights to freely voice their opinions and concerns. In addition, we are in the process of reviewing our entire Terms of Service to ensure it reflects AT&T’s ongoing and unblemished commitment to freedom of expression as outlined in the language above. Our customers are our highest priority and we regret any confusion this may have caused.”
