Sprint Leads in data ARPU, Verizon passes Cingular in Subscribers,according to IDC Report

On Wed, 11 Apr 2007 07:20:49 -0700, SMS <[email protected]>
wrote in <[email protected]>:

>Don Udel (ETC) wrote:
>
>> And they expense it and therefore may not be quite as price sensitive.
>
>In order to utilize the 3G/4G infrastructure that the carriers have
>spent billions of dollars (collectively) deploying, they are going to
>have to expand the user base beyond business.

Based on what? While carriers do need to increase ARPU in order to
appease Wall Street, business data demand far outstrips consumer
opportunities, the majority of which is messaging.

>The challenge is finding a way to offer lower-priced plans without
>having business users take advantage of those plans. They could do data
>plans with unlimited off-peak/limited peak, they could do data plans
>that didn't include roaming, they could do lower-speed plans, etc.

That challenge has already been addressed in current data packages.

The real challenge is finding something compelling enough for consumers
to be willing to pay for it.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

---

› See More: Sprint Leads in data ARPU, Verizon passes Cingular in Subscribers,according to IDC Report

At 11 Apr 2007 14:08:04 +0000 John Navas wrote:

> I think they see tech support as the killer -- low price packages are
> only viable with _zero_ support, and cellular data isn't (yet at least)
> foolproof enough to make that work.

Good point- I was actually going to address that issue but left it out
for brevity!

It seems to me that you could avoid (or at least recoup) support costs
"upfront" with a good overpriced install CD/data cable kit (like Cingular
always did with their DataConnect kits- when you get $30-40 for a $2-
wholesale cable and a connection setup wizard on a self-pressed CD you
can afford a few support phone calls!)

You could even make the kit "required" (i.e. support would only provide
instructions for connecting with the enclosed software, not with setting
up a manual DUN connection on your Linux box with an eBay-purchased data
cable), or at least make the kit more attractive- perhaps include a few
"free one-day pass" coupons so the kit essentially also becomes a
"prepaid starter kit."

Plus, I assume (perhaps wrongly) than someone using such a service would
be likely to use it again as needed (and already be configured,
mitigating support) plus might get "addicted" enough to use it as a
gateway to a monthly access plan.

Despite the lucrative business arket, I can't help but feel the wireless
carriers are leaving revenue on the table by missing some untapped
markets between the $5-15 data-on-phone and $60-80 data card customer.

Following the "hot-spot" model might make sense. T-Mobile offers their
(fairly pathetic) Wi-Fi Hot-Spot service to both their customers (at a
discount) as well as to the public at large for anything from an hour to
daily, or monthly. Who has a bigger potential "hot-spot" network than
Cingular, Sprint or Verizon?

Just food for thought, as they say...

Todd Allcock wrote:
> True- my point is that your local telco can't match the speed, so they're
> probably undercutting cable's price. Here in Denver, Qwest can't match
> Comcast's 6-8Mbs speed, so they sell 1.5Mbs for $25- half of Comcast's $50.

Two points here....McCaw's Clearwire and DSL's new limitations.

As previously mentioned, WiMax may not be targeting the existing hardwired
network such as cable and DSL...but McCaw's Clearwire seems to be doing
just that. http://www.clearwire.com

Personally I think that's a failed model as Clearwire is offering only 1.5
Mbps comparable speeds for $50 where telcos offer that speed for half that
price. Then to make is harder for Clearwire, telcos also offer 5 Mbps for
around $50.

----

Then you have the new limitations on how far DSL will reach. Straight from
AT&T's sales department here are the latest deployment distances:

6 Mbps up to 6,500 ft.
3 Mbps up to 9,500 ft.
1.5 Mbps up to 14,000 ft.

If their outside plant cable maps show you over 14,000...you don't get DSL.
Period. A telco installer was telling me of a customer that had working DSL
out to about 18,000 ft, but had her service disconnected for non-payment.
When she tried to reestablish (set up a whole new account), she couldn't
get DSL.

For these customers, wireless broadband might be an alternative. But with
the telcos aggressively deploying DSLAMs in pedestals along the roadsides
instead of only at the central office as in the past, we're seeing DSL
being offered out in the country side.

On Wed, 11 Apr 2007 15:46:53 GMT, DTC <no_spam@move_along_folks.foob>
wrote in <[email protected]>:

>Then you have the new limitations on how far DSL will reach. Straight from
>AT&T's sales department here are the latest deployment distances:
>
> 6 Mbps up to 6,500 ft.
> 3 Mbps up to 9,500 ft.
> 1.5 Mbps up to 14,000 ft.

Those limits aren't really new.

>For these customers, wireless broadband might be an alternative. But with
>the telcos aggressively deploying DSLAMs in pedestals along the roadsides
>instead of only at the central office as in the past, we're seeing DSL
>being offered out in the country side.

RE-ADSL2 and ADSL2+/RE-ADSL2+ are capable of much longer distances than
standard ADSL, a range increase of roughly 50%. ("RE" is short for
"Reach Extended.) ADSL2 and ADSL2+ are also capable of much higher
speeds, up to 12 mbps and up to 24 mbps respectively. The questions are
if and when AT&T will deploy them.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

At 11 Apr 2007 15:46:53 +0000 DTC wrote:

> As previously mentioned, WiMax may not be targeting the existing
> hardwired network such as cable and DSL...but McCaw's Clearwire seems
> to be doing just that. http://www.clearwire.com
>
> Personally I think that's a failed model as Clearwire is offering
> only 1.5 Mbps comparable speeds for $50 where telcos offer that speed
> for half that price. Then to make is harder for Clearwire, telcos
> also offer 5 Mbps for around $50.

Spoken like a city slicker! ;-)

The appeal of $50 1.5Mbps service will be in the "sticks" where the only
viable broadband options are currently satellite ($300-600 for equipment,
and $50-80/month for 512k-1.5m.)

> For these customers, wireless broadband might be an alternative. But
> with the telcos aggressively deploying DSLAMs in pedestals along the
> roadsides instead of only at the central office as in the past, we're
> seeing DSL being offered out in the country side.

There's country and then there's country! Rural DSL deployment isn't
happening fast enough that Clearwire won't have a solid opportunity for a
few years if they can deploy their service before that happens. (Look at
the third world countries that have leapfrogged past wireline telephony
right in to wireless, because the per customer cost of deploying wireless
is much cheaper.) Many rural areas in the US will likely be better
served by wireless or satellite internet for quite some time.

On Wed, 11 Apr 2007 09:45:29 -0600, Todd Allcock
<[email protected]> wrote in <[email protected]>:

>At 11 Apr 2007 14:08:04 +0000 John Navas wrote:
>
>> I think they see tech support as the killer -- low price packages are
>> only viable with _zero_ support, and cellular data isn't (yet at least)
>> foolproof enough to make that work.
>
>Good point- I was actually going to address that issue but left it out
>for brevity!
>
>It seems to me that you could avoid (or at least recoup) support costs
>"upfront" with a good overpriced install CD/data cable kit (like Cingular
>always did with their DataConnect kits- when you get $30-40 for a $2-
>wholesale cable and a connection setup wizard on a self-pressed CD you
>can afford a few support phone calls!)

The problems I see are complexity and cost. My experience is that:
* It has to be dead simple (like Wi-Fi hotspot login by account or
credit card)
+ Even swapping a SIM card is an issue
+ The multitude of cables and drivers would make SKUs a nightmare.
What's needed is a universal mini-USB cable standard and universal
USB modem driver.
* $20 is pretty much the limit for one-shot impulse buys.

>You could even make the kit "required" (i.e. support would only provide
>instructions for connecting with the enclosed software, not with setting
>up a manual DUN connection on your Linux box with an eBay-purchased data
>cable), or at least make the kit more attractive- perhaps include a few
>"free one-day pass" coupons so the kit essentially also becomes a
>"prepaid starter kit."

Require a (say) $40 "starter kit" and I think the potential market
shrinks dramatically.

>Plus, I assume (perhaps wrongly) than someone using such a service would
>be likely to use it again as needed (and already be configured,
>mitigating support) plus might get "addicted" enough to use it as a
>gateway to a monthly access plan.

There's also the issue of billing data by clock time instead of by
amount of data (or connect time), which isn't currently available in
carrier infrastructure.

>Despite the lucrative business arket, I can't help but feel the wireless
>carriers are leaving revenue on the table by missing some untapped
>markets between the $5-15 data-on-phone and $60-80 data card customer.

What I think might have some hope of success would be a USB cellular
data modem (that might emulate a USB Bluetooth dongle to piggyback on
native OS driver support) if cost could be kept down to say $20-30 (with
a modest amount of bundled data).

>Following the "hot-spot" model might make sense. T-Mobile offers their
>(fairly pathetic) Wi-Fi Hot-Spot service to both their customers (at a
>discount) as well as to the public at large for anything from an hour to
>daily, or monthly. Who has a bigger potential "hot-spot" network than
>Cingular, Sprint or Verizon?

Racks in local retailers? Again, the problem I see is support: "Hey!
I bought this from you, and it doesn't work!"

>Just food for thought, as they say...

If you really think it's that good an opportunity, form an MVNO and go
for it yourself!

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

Todd Allcock wrote:

> Agreed, and I hope they don't. I'd love to see this happen as planned.
> Sprint's track record, however, is against them. IMHO, Sprint already
> offers the best wireless data option today in terms of coverage, speed
> and value, yet their marketing department can't sem to wrestle that
> business away from Verizon.

Verizon seems to have the high-end business market locked up, not
because of data, but because of the combination of voice coverage that
Sprint can't duplicate, data coverage that is almost as good as Sprint's
but far superior to Cingular's, and value-added services that Cingular
can't offer because their network doesn't support them.

I don't see any way for Sprint to overcome the issue of coverage.

> Similarly, if Sprint comes out of the gate at $50/month, Verizon or
> Cingular can just go to $30. They won't like it any more than Qwest
> likes their $25 price point, but the reality of the situation will force
> their hand.

Verizon hasn't participated in a lot of the price wars, or come up with
stuff like Sprint's short-lived "Fair and Flexible," Cingular's
rollover, or T-Mobile's and Alltel's calling circles.

> Yes and no- just as many folks have ditched their home phones rather than
> pay for both wireless and wireline, some folks will want to ditch wired
> broadband to avoid two bills as well, even if the speed isn't as fast as
> wired.

I would ditch the landline if not for DSL. I wouldn't mind 1.5MB/s
service for home use.

> (Quasi-off-topic, but related, I've often wondered why no wireless
> carrier has ever offered a pay-per-day cellular data option to go after
> the airport/hotel wi-fi hotspot market.

For the same reason that they aren't really interested in pay-per-use
text messaging. If they priced it reasonably, the believe that it would
affect sales of their data plans.

> Consumers care about the benefits, not the underlying technology. In a
> world where it took nearly a decade for the public to learn TiVo was more
> than a tapeless VCR, I suspect Cingular and Verizon will still be selling
> 3G data long after WiMax finally launches.

Hmm, you mean Tivo isn't just a DVR?

On Wed, 11 Apr 2007 10:27:26 -0700, SMS <[email protected]>
wrote in <[email protected]>:

>Todd Allcock wrote:
>
>> Agreed, and I hope they don't. I'd love to see this happen as planned.
>> Sprint's track record, however, is against them. IMHO, Sprint already
>> offers the best wireless data option today in terms of coverage, speed
>> and value, yet their marketing department can't sem to wrestle that
>> business away from Verizon.
>
>Verizon seems to have the high-end business market locked up, not
>because of data, but because of the combination of voice coverage that
>Sprint can't duplicate, data coverage that is almost as good as Sprint's
>but far superior to Cingular's, and value-added services that Cingular
>can't offer because their network doesn't support them.

AT&T/Cingular is actually quite strong in the business market thanks to
the strength of ATTWS in that market and current business offerings from
AT&T/Cingular that are easily as strong as Verizon.

>I don't see any way for Sprint to overcome the issue of coverage.

As the recent devastating loss of government business clearly shows,
Sprint is still struggling to realize the Nextel merger, and faces
further challenges in its big all-or-nothing bet on WiMAX.

>> Yes and no- just as many folks have ditched their home phones rather than
>> pay for both wireless and wireline, some folks will want to ditch wired
>> broadband to avoid two bills as well, even if the speed isn't as fast as
>> wired.
>
>I would ditch the landline if not for DSL. I wouldn't mind 1.5MB/s
>service for home use.

I've long since ditched landline. HSDPA is quite sufficient for my own
needs, and probably those of most of the average users -- the battle
between cable and DSL has shown that cost is more important than speed
to most users.

>> (Quasi-off-topic, but related, I've often wondered why no wireless
>> carrier has ever offered a pay-per-day cellular data option to go after
>> the airport/hotel wi-fi hotspot market.
>
>For the same reason that they aren't really interested in pay-per-use
>text messaging. If they priced it reasonably, the believe that it would
>affect sales of their data plans.

That makes no sense. In fact, just the opposite is probably true, that
pay-per-day customers have the potential to become regular subscribers.
The obvious real problems are complexity and cost.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

"Don Udel (ETC)" wrote:
>
> "John Navas" <[email protected]> wrote in message
>> I think the real majority for tethering are business users that are
>> comfortable at a much higher price point than that.
>
> And they expense it and therefore may not be quite as price sensitive.
>

Then there is little market for it, because very few people are using it,
comparatively speaking. And I *could* expense it. I just happen to value
others' money as I do my own (can't see wasting money on something that will
only be used a few times a year--and that's assuming the times I would have
needed it I would have had coverage).


--
Mike

On Wed, 11 Apr 2007 10:29:41 -0600, Todd Allcock
<[email protected]> wrote in <[email protected]>:

>At 11 Apr 2007 15:46:53 +0000 DTC wrote:
>
>> As previously mentioned, WiMax may not be targeting the existing
>> hardwired network such as cable and DSL...but McCaw's Clearwire seems
>> to be doing just that. http://www.clearwire.com
>>
>> Personally I think that's a failed model as Clearwire is offering
>> only 1.5 Mbps comparable speeds for $50 where telcos offer that speed
>> for half that price. Then to make is harder for Clearwire, telcos
>> also offer 5 Mbps for around $50.
>
>Spoken like a city slicker! ;-)
>
>The appeal of $50 1.5Mbps service will be in the "sticks" where the only
>viable broadband options are currently satellite ($300-600 for equipment,
>and $50-80/month for 512k-1.5m.)

Sure, but the problems there are low density and small size of market,
which make that market unattractive to major players. I think that will
mostly appeal to small niche players, and probably at a higher price
point.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

On Wed, 11 Apr 2007 10:43:32 -0700, "Tinman" <[email protected]> wrote in
<[email protected]>:

>"Don Udel (ETC)" wrote:
>>
>> "John Navas" <[email protected]> wrote in message
>>> I think the real majority for tethering are business users that are
>>> comfortable at a much higher price point than that.
>>
>> And they expense it and therefore may not be quite as price sensitive.
>
>Then there is little market for it, because very few people are using it,
>comparatively speaking. ...

According to what I'm seeing, business is actually the source of the
majority of the growth in data (as distinct from messaging) ARPU, and is
expanding at a healthy pace.

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

At 11 Apr 2007 17:01:33 +0000 John Navas wrote:

> The problems I see are complexity and cost. My experience is that:
> * It has to be dead simple (like Wi-Fi hotspot login by account or
> credit card)

Agreed- a simple to remember login page URL could handle that, with
authentication handled by the customer's existing account credentials .
(A "click-to-buy a day pass billed to your account" link.)

> + Even swapping a SIM card is an issue

Which is why using your existing phone with a data cable would be the
ideal configuration.

> + The multitude of cables and drivers would make SKUs a nightmare.

You'd limit the number of SKUs to ubiquitous models or brands with fairly
standard connectors across models, (i.e. like the RAZR, Nokia pop-port,
etc.) and cheaper CD-only kits for smartphones that come with sync
cables, like Treos, Blackberries and xx25 WinMo phones. Five or six SKUs
Could target a good percentage of the customer base, at least for an
initial trial.

> What's needed is a universal mini-USB cable standard and universal
> USB modem driver.

One CD could have modem drivers and configurations for all supported
models. Auto-detect if possible, or pick your phone from the picture.
Install drivers and the connection interfact wizard, plug in the data
cable, log into, say, www.cingularhotspot.com and click to buy.

> * $20 is pretty much the limit for one-shot impulse buys.

> Require a (say) $40 "starter kit" and I think the potential market
> shrinks dramatically.

Perhaps, but that's around what a data card typically costs with a 2-year
committment. This would be committment-free and could include any number
of free day-passes needed to give it the required perceived value.

When Cingular launched TDMA data east of the Rockies in the late 90s,
that's basically how they sold it- a $30 data cable and CD set ($20 for
just the CD for IR-enabled phones like my Nokia 7160) and $4/month for
CSD access using plan minutes. Good times! If you asked a CSR how to
configure, for example, a DUN connection, they'd robotically walk you
through the steps of installing your DataConnect CD. If you wanted to
use unsupported OSes or DUN, you could, but you were on your own.

> There's also the issue of billing data by clock time instead of by
> amount of data (or connect time), which isn't currently available in
> carrier infrastructure.

That's a minor issue- they do it now, except by the month instead of
by the day. You'd need to add a one-day unlimited plan billing code,
and a systemic way for it to expire without a live CSR having to cancel
it- not that big of a deal.

> What I think might have some hope of success would be a USB cellular
> data modem (that might emulate a USB Bluetooth dongle to piggyback on
> native OS driver support) if cost could be kept down to say $20-30 (with
> a modest amount of bundled data).

That could certainly work if you could keep the hardware costs low
enough. I don't see it happening at $30 without a carrer subsidy
however, which wouldn't make much sense without a committment. My
suggestion uses existing customer equipment and carrier resources, making
it easy to expand to include your concept later, if successful, and
(relatively) cheap to bail out of if not!


> Racks in local retailers? Again, the problem I see is support: "Hey!
> I bought this from you, and it doesn't work!"

Wow! You have an even lower opinion of the average consumer than I do!
;-)

No, I envisioned this as something only the wireless provider's company
stores would offer just for those reasons. Heck, the average big-box
retail customer can't buy the right car-charger for their phone unaided
50% of the time. But if company store employees matched the right data
cable for the customer who then runs the included config CD on his
laptop, it wouldn't be any more complicated than installing a USB Wi-Fi
dongle. Limit the SKUs to a number of high-end data phones (who's owners
hopefully have some tech savvy) and ubiquitous models (i.e. the Razr) for
mass consumption, and you have a fairly workable model, IMHO.

> If you really think it's that good an opportunity, form an MVNO and go
> for it yourself!

I think it's a good opportunity for existing carriers to leverage assets
already in use for incremental revenue.

As an MVNO model, it would need cheap equipment not currently available
(unsubsidized data cards/dongles are nowhere near the sub-$40 mark they'd
have to be,) willing carriers (the big four carriers, particularly
Cingular, generally do not wholesale data to MVNOs in fear that it would
cannibalize their postpaid business, and no MVNO, even the few that
support non "walled-garden" data, like STI or Amp'd, supports prepaid
tethering) and a ton of advertising to get the word out to the potential
custmer base.

My suggestion was targeting a carrier's existing customer base, using
their own existing equipment to keep startup costs low for both customer
and carrier (other than some minor backend billing changes and a few new
"try this out" links on the WAP deck homepage) and the customer
convenience of having almost everything they need to use it already,
including an account with the provider.

As a parallel, how popular would casual text messaging be if you had to
buy a separate device and a separate prepaid account to use it? The
attractiveness of my suggestion is largely in the impulse of reuse: you,
your laptop, and your Treo or Razr find themselves in a hotel without Wi-
Fi (or a resort hotel with $10-20/day Wi-Fi) and you can fire up the
DataConnection software already on the laptop and plug in the sync/charge
cable you're already carrying to charge the phone, and connect for $5.99
or whatever.

"SMS" wrote:
> Todd Allcock wrote:
>> At 11 Apr 2007 14:08:04 +0000 John Navas wrote:
>>
>>> I think they see tech support as the killer -- low price packages are
>>> only viable with _zero_ support, and cellular data isn't (yet at least)
>>> foolproof enough to make that work.
>>
>> Good point- I was actually going to address that issue but left it out
>> for brevity! It seems to me that you could avoid (or at least recoup)
>> support costs
>> "upfront" with a good overpriced install CD/data cable kit
>
> The support issues largely go away when you use a CardBus or ExpressCard
> wireless modem. Sell those for $50, then charge $10 per day for access.

This is exactly what I would like to see! I'd even pay more for the card, if
that $50 is subsidized. And it would be fantastic if an inactivated card
redirected Web browsing to an easy sign up page--like WiFi networks do.


>
> The few places where many people might even want the cellular data often
> have pay as you go WiFi available.

Very true about this. But one benefit of cellular is that you could use it
anywhere there was coverage. When I was stuck in Houston IAH airport last
week, with only a $10-per-day WiFi offering, I didn't go for. But the
primary reason was because I would be leaving the airport soon anyway. Had
that $10-per-day for a day of EV-DO, anywhere there's coverage, I would have
jumped on it.


>
> Personally I'd pay $5 a day for wireless data on a pay per use basis, even
> if I had to buy a modem. Maybe I'd find it indispensable and sign up for a
> monthly plan, but it's unlikely/

At $5 I very likely would have gone for that WiFi offer in Houston. ^_^



--
Mike

On Wed, 11 Apr 2007 19:11:25 GMT, Paul Miner <[email protected]>
wrote in <[email protected]>:

>On Wed, 11 Apr 2007 17:40:32 GMT, John Navas
><[email protected]> wrote:
>
>>I've long since ditched landline. HSDPA is quite sufficient for my own
>>needs, and probably those of most of the average users -- the battle
>>between cable and DSL has shown that cost is more important than speed
>>to most users.
>
>I was under the impression that the battle between cable and DSL had
>come down overwhelmingly in favor of cable, indicating that most
>people are swayed by the higher speed, even though most of those same
>people probably only use/need a fraction of that speed.

Cable grabbed market share early, but DSL has been taking market share
lately, largely with lower pricing. See " DSL Is America's Choice for
Broadband" (June 2006) <http://www.highbeam.com/doc/1G1-147036176.html>

More Than Half of New Broadband Subscribers Now Choose DSL Over
Cable

As Many as One in Seven New Verizon Online DSL Customers Have
Switched From Cable

U.S. Broadband Penetration to Hit 60% in 2007, Led by DSL Growth
<http://www.marketwatch.com/news/story/us-broadband-penetration-hit-60/story.aspx?guid=%7B81E650BB-CF55-4648-B960-BDFDBDC87B95%7D>
January 2007

About 60 percent of all U.S. homes will subscribe to broadband
service by the end of the year, but cable operators will come
precariously close to losing their majority market share, Pike &
Fischer concludes in a new report published by its Broadband Advisory
Services unit.

Cable operators will see their share of the high-speed Internet
market fall to slightly more than 50 percent as adoption of standard
DSL and, to an increasing extent, fiber to the home or node (FTTx),
continues to help the major telephone companies net the largest
number of new broadband customers, Pike & Fischer forecasts in its
"Broadband Business Outlook 2007."

--
Best regards, FAQ FOR CINGULAR WIRELESS:
John Navas <http://en.wikibooks.org/wiki/Cingular_Wireless_FAQ>

At 11 Apr 2007 17:43:40 +0000 John Navas wrote:

> Sure, but the problems there are low density and small size of market,
> which make that market unattractive to major players. I think that will
> mostly appeal to small niche players, and probably at a higher price
> point.

Which describes the current situation, of course, where their only option
is (comparitively) overpriced satellite broadband.