FreedomPop became a full-service mobile operator today, selling its first smartphone coupled with voice and data service. The difference between FreedomPop and your typical carrier is that its services are entirely IP based.
In Summly we trust, Flipping the magazines, Math Madness, Say no to contracts & iPhone comes to T-Mobile, plus cable cuts slow down the Internet and links to web-world greatness. A look back at the week in tech
Now that Verizon is quickly moving customers to its LTE network, what can it do with the older 3G airwaves? Use them for two new prepaid plans and make a little new money on old resources.
Chicago, Reno, and the LA burbs join Atlanta, Minneapolis and Seattle as the newest areas of the country where an iPhone will work on T-Mobile’s 3G network. T-Mo is now about one-third of the way from completing its nationwide HSPA+ overhaul.
Google’s new Chromebook debuted in a Wi-Fi only model, leaving many to wonder if there would eventually be a 3G model. Turns out, there already is. Verizon’s 3G network is supported on the $329.99 device and includes 100 MB of monthly data at no extra charge.
At WWDC Apple unleashed FaceTime on the 3G network. While you would think a high-quality video chat service would be poison to consumers’ restricted data plans, there’s another way to look at it: Compared to what mobile operators charge for voice, FaceTime is really a bargain.
China Telecom is getting very near to launching Apple’s iPhone 4S on its network, according to a new report. China Telecom subsidiary Beijing Telecom said it will likely offer a CDMA version of the iPhone 4S by the end of February or the beginning of March.
Verizon plans milk as much revenue off of its 3G and LTE networks as possible, becoming the “premium” mobile data operator, but its plan could backfire. Despite the increase in 4G sales, Verizon is still primarily a 3G operator, and 3G doesn’t justify its steep prices.
Verizon Wireless has quietly begun throttling data speeds for high-end users, Cellular-News.com reported late yesterday. In a remarkably evasive statement on its Web site, VZW said it has “implemented new network optimization practices” that will slow speeds for the top five percent of mobile data users when the 3G network is congested. (Verizon also denies that the practice meets the definition of “throttling,” but I don’t understand why not.) The move has received very little attention so far, but it’s just the latest example of how carriers are struggling to deal with increased data usage on their networks.
The Justice Department’s effort to block AT&T’s acquisition of T-Mobile USA has sparked a flurry of stories claiming the smaller carrier will be living on borrowed time if the deal isn’t approved. CNNMoney claims that T-Mobile without AT&T “is a wireless white elephant,” StreetInsider.com says failure to close the acquisition “might mean auf weidersehen” for Deutsche Telekom’s U.S. business, and longtime analyst Roger Entner predicts that T-Mobile “will be left to a slow death” unless the deal goes through. Those autopsies are premature, however. T-Mobile USA is still a viable operator with a chance to compete with the big boys on its own. That’s why it’s crucial that the carrier move forward even as its fate is being decided in the Beltway.
T-Mobile’s most obvious vulnerability, of course, is its lack of a true 4G network. But a RootMetrics study of mobile data speeds earlier this year found that T-Mobile’s HSPA+ far outperformed AT&T’s 3G network and matched Sprint’s WiMAX service. And the major 4G network operators have yet to build out their portfolios of supporting devices, giving T-Mobile a year or two before its network becomes a real liability. If federal regulators manage to block the acquisition, T-Mobile will receive $3 billion in cash plus billions more in spectrum, thanks to the breakup fee AT&T will have to pay. Those assets could help T-Mobile begin work on the LTE network it will need in the next few years.
Critics also say T-Mobile exists in a kind of no-man’s-land in the mobile market. It can’t compete on price with no-frills service providers, and its nationwide network isn’t as solid as Verizon’s or even AT&T’s. That theory was supported earlier this year when T-Mobile was bleeding subscribers, but those losses slowed substantially during the most recent quarter, the carrier said last month. A closer look reveals even more encouraging figures: Monthly data ARPU (average revenue per user) increased from $11.60 to $13.60 over the year-ago period, and the company added more than 250,000 machine-to-machine connections. Those trends look to continue as data consumption ramps up and the Internet of Things gets legs. T-Mobile is still a profitable operator, posting a net income of $207 million in the latest quarter.
So how can Deutsche Telekom help shore up its U.S. business if AT&T’s acquisition is blocked? Most importantly, it should do everything in its power to expand its relationship with Apple to bring the iPhone to T-Mobile USA. That move seems highly plausible in light of recent reports that Sprint will soon carry the iPhone. It must invest heavily in its network to fill in the network holes that lead to dropped calls and delayed text messages. It must follow AT&T’s lead and use HSPA+ as an evolutionary step toward LTE, and it must develop and disclose a build-out plan and time frame to ease the concerns of investors and customers. And it must improve its marketing strategy, positioning itself as an affordable operator of a high-speed mobile network. (Also, it would help if it did away with its policy of throttling network speeds for high-end data users, which gives Sprint an opportunity to differentiate itself as a truly “unlimited” service provider.)
I still think AT&T and T-Mobile will offer enough concessions to ultimately gain approval. But if the deal were to fail, potential suitors such as Google, Sprint or a consortium of cable companies could swoop in and pick up T-Mobile. As the CNNMoney piece pointed out, though, T-Mobile “has largely sat on its hands” since the AT&T deal was announced rather than aggressively upgrading its network and building out its device portfolio. Mobile is a fast-moving space where handsets and networks are constantly evolving. T-Mobile could still become a major player if the deal fails, but if Deutsche Telekom doesn’t get more aggressive immediately — and if the AT&T acquisition is nixed — it will suddenly find itself left behind.