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Showing posts from July, 2009

JD Power Study Suggest Potential for Huge Prepaid Wireless Shift

About 16 percent of prepaid wireless users have switched carriers in the past 12 months. Some 51 percent of those switchers previously had contract service, a new survey by JD Power and Associates says.

About 12 percent of those surveyed said they would switch carriers sometime in the next year, compared to 13 percent in 2008.

Among those intending to switch, 24 percent intend to switch to contract service. That suggests 75 percent of switchers would consider prepaid plans.

And there are clear differences between "pay as you go" users and prepaid customers, suggesting two clear niches. The study also finds the average pay-as-you-go user is older, more likely to be retired and has fewer wireless phones in their household.

The monthly prepaid plan user more closely resembles the contract plan user, desiring a large network, mid-range feature phones and messaging, but without the commitment or penalties of a contract.

That is likely the most significant finding, as it suggests t…

FCC Investigates Google Voice Blocking

The Federal Communications Commission has opened an investigation into the blocking of Google Voice from the iPhone App Store.

James D. Schlichting, acting chief of the FCC's Wireless Telecommunications Bureau, has asked for answers to several questions. The FCC wants to know what role AT&T played in the decision. Keep in mind that the FCC already is looking at wireless open access and handset exclusivity, both of which seem for those reasons to bear on the status of Google Voice on the iPhone.

The FCC further wants to know what role AT&T might play in restricting other iPhone apps. The agency also wants to know what roles Apple and AT&T can play, by contract, in the development of iPhone apps.

The FCC wants to know whether Apple consulted with AT&T in the process of deciding to reject the Google Voice application. Documents relating to any such discussions must be produced.

The FCC also wants an explanatiion of how Google Voice might differ from any other VoIP appl…

For All of You Who Find Mobile Usage EVERYWHERE Annoying

Really, there are times when our mobiles do not HAVE to be powered up.

Price War Breaking Out in Prepaid Wireless

MetroPCS Communications is making another potentially disruptive move in the prepaid wireless market, introducing a prepaid $40 a month unlimted plan including voice, texting and Internet access.

The $45 plan now include sunlimited email, navigation and social networking applications. MetroPCS’ $30 and $35 local unlimited plans will now include caller ID and call waiting.

The $50 plan continues to offer smartphone customers complete HTML Web browsing and enterprise wireless email.

For anybody who doubted potentially huge changes in the prepaid market, this is yet another example.

MetroPCS was the first North American wireless carrier to offer unlimited international long distance calling for an additional $5 per month, to over 100 countries and over 1,000 destinations. This unlimited international long distance feature is available on both the $45 and $50 service plans.

MetroPCS is also offering consumers a family plan. With MetroPCS’ family plan, families with two to five lines will be…

Apple, AT&T Ban Google Voice, Put Restrictions On Google Latitude

In the never-ending debate about whether usrs benefit more from "open" amd "closed" application environments in the mobile space, Apple has tended to be the best example of innovation and consumer benefit provided by the "closed" model, even though many would likely argue the evidence tends to suggest "open" leads to more rapid innovation, as a rule.

"Closed" can lead to benefits if the provider can optimize performance of all applications and devices, while at the same time delivering better user experiences. Apple has excelled, on that score.

But Apple's recent decision to ban Google Voice from the iPhone App Store is a salient reminder that the ability to optimize user experience can come at a cost.

To be sure, nobody is quite sure who was the driving the ban. AT&T obviously has incentive to protect its existing voice business. If Apple drove the decision, the reasons are more difficult to discern.

Google Voice allows free d…

Skype in Patent Dispute

eBay says in a regulatory filing that it is set to go to trial on June 10, 2010 on what appears to be a key VoIP patent dispute with Joltid Limited, which licenses peer-to-peer technology to Skype..
Skype has begun to develop alternative software to that licensed through Joltid.
EBay wrote in the quarterly filing that it recognized that pending litigation over the technology behind Skype could ultimately have an "adverse result," so it had begun to develop alternative software to the technology it licenses from Joltid Ltd for Skype.

In its regulatory filing, which contains the typical disclaimers about the potential damage if eBay's position is not upheld, eBay made the statement in typical legalese that if the company is not successful, it might have to shut Skype down.

That could, in a worst-case scenario, lead to Skype being shut down, but that typically is not what happens. The parties come to some sort of settlement. Remember the wave of patent infringement lawsuits ba…

Watch for Fireworks in Prepaid Wireless Later This Year

Watch for shake-ups in the U.S. prepaid wireless market later this year. The obvious example is what Sprint Nextel might do with its 10 million customer strong Boost-plus-Virgin Mobile business.

Now that unlimited prepaid plans have been successfully launched by MetroPCS and Leap Wireless, for example, other contestants are likely to have to rethink packaging and pricing. Products, after all, are positioned in relationship to other products, not in the abstract. In fact, when a produce cannot be valued and priced in relationship to other known products, consumers are likely to resist buying.

In context, the prepaid market will look different to typical buyers when the range is "unlimited for this price" compared to "buckets at other prices." The value equation is changed, even if, as a practical matter, for most uers the difference between "truly unlimited" and "a big bucket" is indistinguishable.

Were Sprint Nextel to announce an unlimited pre…

Verizon Offers Free Nationwide Wi-Fi to its Wired Broadband Customers

The public Wi-Fi hotspot model seems to be morphing again.

Verizon now is offering most of its broadband customers free access to more than 13,000 Wi-Fi connections across the United States, partnering with Boingo Wireless.

Other providers offer similar Wi-Fi services, including Cablevision Systems, which offers such free access for its cable modem customers, and AT&T, which does the same for its high-speed access customers at 20,000 locations, in partnership with Wayport.

To get the free Wi-Fi access, new Verizon FiOS Internet customers must order a 25 Mbps downstream / 15 Mbps upstream or faster connection and DSL customers must order 3 Mbps/768 Kbps or faster connection.

Barnes & Noble bookstores now offers free Wi-Fi access at tis retail locations, as do hotels and other public locations, at least in part, as a customer amenity, not a revenue driver.

The Wi-Fi business model has been through several iterations over the past several years, with most local providers discoverin…

Brands are Media, These Days

Because of the Internet, blogs and social networking, marketing really is changing. It has been clear for some time that where brands once relied on media companies to get their messages across, using public relations and advertising, new forms have arisen.

Many firms, perhaps most, now divert spending from advertising to bolstering their own Web sites. Many, because of real simple syndication, recommendation engines and other sharing tools, can become "media" in their own right. That is not to say the new tools completely replace the older channels. It would be more accurate to say the new tools more often supplement the older channels.

Most firms likely still would see more value in a story in the Wall Street Journal than on their own blogs and content sites. But most firms can use "earned media" (non-paid attention as compared to for-fee advertising, for example) to a growing extent.

Whether the goal is "branding" or "direct response," earned m…

Verizon Wireless Unveils Cross-Network, Cross-Device, Cross-OS App Store

Up to this point, "application stores" have been device specific. But Verizon Wireless is launching the first cross-device, cross-network application development effort and store. Specifically, developers can create apps running across four different mobile providers and operating systems ranging from Research in Motion, Android, Windows Mobile, Palm and Symbian operating systems.

The “Joint Innovation Lab” is a consortium consisting including Verizon, China Mobile, Vodafone and Softbank. That platform, which will push common standards for developers, will allow those developers to reach a billion customers on all four networks.

The consortium will offer its own software developer kit and open up handset and service application programming interfaces to developers.

This is important: until now, developers have had to design apps to work with the dozens of handsets supported by each carrier. Now, however, Verizon says it will offer tools so developers can write one app that w…

Sprint Buys Virgin Mobile

Sprint Nextel Corporation is acquiring Virgin Mobile USA for $483 million, Sprint already owns 13.1 percent of Virgin Mobile, which has been a mobile virtual network operator customer.

The move illustrates the growth of prepaid as a segment within the mobility business, as well as the maturation of the mobile business overall. Organic growth is harder to come by, making growth through acquisition a more reasonable tactic. But the biggest take away is the growth of the prepaid segment, which traditionally has been a segment major operators have shyed away from.


Broadband Stimulus: Let the Bellyaching Begin!

Not a dime of broadband stimulus money has been awarded but the carping will begin in earnest once the first round of awards are made. That is almost inevitable, given the vastly greater number of potential "losers" compared to the actual award winners, the range of contestants already locked in fierce competition with each other and the predictable complaints that incumbents got too much of the money.

The Rural Utilities Service portion of the program arguably faces more challenges. The National Telecommunications & Information Administration likely will have an easier time since that is where many training, public computing center and other projects can legitimately be funded.

Almost by definition, rural broadband communications is capital intensive enough that if one is not already a service provider, becoming one would be prohibitively difficult. Beyond that, running a service provider business does require some organizational skills and capabilities even experienced …

Satellite Gains 3.5%, Cable Flat, says Centris

Satellite TV providers have gained 3.5 percent more subscribers, while cable TV operators were essentially flat for the period, say researchers at Centris. And while some have noted sluggishness in ownership of Blu-Ray video players, adoption grew 71 percent over the last year.

There were 7.2 million Blu-Ray households in the first quarter of 2008 and 12.3 million Blu-Ray households in the first quarter of 2009.

Some 32 million households now subscribe to satellite-delivered multi-channel TV service, up from 30.9 million a year ago.

Nearly 63 million households have cable TV, but pay-per-view is quite flat. In April 2009 Centris reported that 12.6 million households ordered PPV in a typical month, unchanged from 2008.

In the first quarter of 2009, about 64 percent of all US households access the Internet each month, up nine percent over 2008, and representing growth of about nine percent.

About 80 percent of all homes accessing the Internet did so using broadband, a 17 percent increase …

Where Did AT&T Prepaid Accounts Go?

AT&T's prepaid results were weaker om the second quarter. "Obviously we had a net loss of customers of about 400,000," AT&T CFO Richard Lindner says.

So what happened? Did those users stop using their mobiles? Other evidence suggests not. Few users in recent surveys claim to have terminated their mobile services entirely.

So the most-logical explanation is that other prepaid mobile providers picked up those 400,000 customers. And Lindner doesn't dispute that view. "Certainly we’re seeing impacts from other competitive offers in the market," he says.

Prepaid represents about four percent of AT&T wireless service revenues and less than that amount as a percentage of total earnings. So AT&T is not likely to push too hard in the prepaid direction for fear of cannibalizing its more-lucrative postpaid business.

But that will mean growing opportunties for providers of prepaid wireless.

"Obviously we recognize there’s certainly some opportunitie…

AT&T, Verizon: Business Segment Suffers Worse than Consumer

Verizon Communications and AT&T arguably took bigger hits to their enterprise than consumer segments as a result of the recession, second quarter financial results suggest.

Revenue from Verizon’s global enterprise business dropped 6.7 percent while the wireless customer segment revenue grew 27.7 percent. Even consumer wired services revenue grew 13.7 percent in the second quarter.

AT&T also reported that the deepest economic impacts in the second quarter came in the business services segment.

AT&T CFO Richard Lindner likewise says total business revenues, including enterprise, wholesale, small and mid-sized customers, were down 5.6 percent year over year. Excluding equipment sales, business revenues were down 4.3 percent, Lindner says.

Wireless revenue was up 10.1 percent, on the other hand, while total wireline consumer customer revenues were $5.4 billion in the second quarter, compared with $5.7 billion in the year-earlier quarter and essentially flat, down only $11 milli…

50% to 60% of New Prepaid Wireless Users Will Never Go Back to Post-Paid

Prepaid wireless clearly is growing. In the first quarter, for example, about 61 percent of the new net customers T-Mobile added were prepaid accounts. In the fourth quarter of 2008, T-Mobile added 57 percent prepaid accounts. In the first quarter of 2008 T-Mobile added 25 percent prepaid customers.

So the big question is what those customers might do once the recession is over and there is less need to watch spending on mobile and other communications and entertainment services.

Wireless analyst Chetan Sharma thinks it is possible that "it is quite likely that 50 percent to 60 percent of such consumers don’t go back to postpaid."

For major wireless providers, this will mean a decline in average revenue per user. For prepaid providers, the trend will mean continued opportunities to take market share from postpaid providers.

The other trend is that although prepaid traditionaly has been viewed as a niche segment for lower-income customers, that could be changing. Lots of custo…

Mobile Streaming Video Grows 58% Last Quarter

Worldwide mobile data bandwidth usage has grown 30 percent during the second quarter of 2009, says Allot Communications. Asia leads the growth with 36 percent; Europe posted 28 percent growth and the Americas 25 percent.

Heavy data users do not distinguish between their fixed and their mobile networks and seem to expect the same service from the Internet, irrespective of their access method, the report says.

That is going to be a problem, for the same reason a small percentage of heavy users create performance issues for all other users, one might reasonably conclude. The other issue is that the fastest-growing traffic type is streaming video, which grew 58 percent during the quarter. Since streaming video requires 100 times the bandwidth of a voice call, you can imagine what the problem is.

The other issue is that mobile traffic is not evenly distributed: some locations get dramatically more demand than others. Peer-to-peer traffic, for example, accounts for 42 percent of bandwidth u…

Internet Rivals TV as Top Leisure Pursuit

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The Internet now rivals TV as a favorite leisure activity, say researchers at Frank Magid Associates (click image for larger view). And computer or game consoles are not far behind.


Broadband Adoption is Not Just about Availability

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Some observers think broadband adoption is primarily a matter of availability. It is important, but it is not the only important factor.

Even if every home and business in every OECD country were wired with a broadband connection, the United States "per capita" rank would actually fall to 20th, because of differences in the size of households in each of the countries.

In other words, "America would be 100 percent broadband saturated and yet our standing would plummet because the OECD ranks on a per capita basis rather than per household," says Federal Communications Commission Commissioner Robert McDowell.

In Spain, for example, 28 percent of people flatly say they "do not want" broadband. About 15 percent of homes do not own a computer.

About 13 percent of surveyed consumers say they do not find the Internet "useful."

S0me 12 percent say they do not have time to use the Internet and 10 percent say they do not know what the Internet is. Only four…

Questions about Zer01, Buzzirk

Nancy Gohring , a reporter fror IDG News Service, has raised some uncomfortable and so far unanswered questions about Zer01, the new prepaid mobile service launched by United Technologies Group and sold by channel partners including Buzzirk. The service promises unlimited voice and data for $70 a month, with no contract.

But Gohring says "what little information is available about the services is vague, technically inconsistent, and doesn't match up with public records."

And that's the least of the issues. Anybody thinking about becoming a distributor probably should read this as part of their due diligence. It's a heck of a piece of reporting and research.

http://www.networkworld.com/news/2009/072009-zer01s-mobile-offer-may-be.html?page=1

Ad Market Recovery in 2010?

Perhaps we all are anticipating too much "normalcy" from the current recession and recovery. But PricewaterhouseCoopers (PwC) expects a 2010 recovery.

PwC says worldwide advertising spending will reach $421 billion 2009.

The bad news is that figure is down 12.1% from 2008, which saw $479 billion in spending.

Fortunately, PwC expects the online and mobile (which it treats as one category) and video game ad spaces to rebound in 2010 with five-year compound annual growth rates of 7.7% and 13.8%, respectively.

PwC expects all global media markets to see a rise in spending by 2012. Recovery will not be evenly spread around the world, however. Total ad spending in North America compounded annually will decrease by 1.6% from 2009 to 2013.

Online, mobile and video game advertising will see 6.4% and 13% compound annual growth rates, respectively, over the five-year period.

Online and mobile advertising spending, down in 2009, will rebound in 2010. North America will see ove…

No Inflection Point for Interactive Media, Yet

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Nothing is going to replace search advertising as the top interactive category, just as nothing appears able to dislodge display advertising, between now and 2014 or so.

And though interactive advertising is growing, it will not displace offline alternatives, either.

By 2014, all interactive channels together will account for about 21 percent of total ad spend.

That is not to say greater changes are unlikely. One of the enduring lessons of "disruptive" change is that there is a sometimes long gestation period before an inflection point is hit. Then the change goes non-linear and vast changes can occur very quickly.

Nobody knows yet if that is what lies ahead for advertising. But it bears watching, as 2009 seems to have marked something of a watershed for print media, for example.

U.S. Internet Growth 3% to 2013

The total number of people online will grow by over 45 percent to 2.2 billion users — with much of that growth occurring in Asia — over the next five years, according to Forrester Research.

Asia remains the biggest global Internet growth engine: 43 percent of the world's online population will reside in Asia by 2013, with 17 percent of the global online population in China.
Growth rates in the US, Western Europe, and the major industrialized nations in Asia Pacific such as Australia, Japan, and South Korea will slow to between one percent and three percent.

That is a significant finding, as it suggests most people who want to use the Internet already do so.

Online penetration in the United States will rise from 73 percent to 82 percent over the next five years, representing about a three percent annual growth rate.

By 2013, U.S. online penetration will be on par with the most highly penetrated markets of Europe and Asia, such as the Netherlands, the UK, Japan, and South Korea.

By ab…

Mobile Marketing Second Only to Web Among Top Ad Agency Execs

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Though mobile marketing spending lags far behind combined Web advertising, mobile marketing has become quite interesting to many advertising excutives recently.

Where a third of executives say Web channels are most popular, mobile campaigns are second, at 15 percent.

That is interesting as mobile campaign spending is perhaps one percent the size of search advertising, for example.

Traditional methods, including TV, print and direct mail, are in single digits.

To the extent that spending ultimately follows interest, mobile campaigns should skyrocket, despite the currently limited amount of spending in the category.

Search Still Will Lead 2014 Interactive Marketing Channels

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Search will remain the single largest interactive marketing channel in 2014, and online display will keep its second-place status among marketers.

But social media marketing will show the highest growth rate, passing email marketing.

Mobile marketing also will grow by an order of magnitude.

What Are New Satellite Phone Operators Up To?

New satellite communications operators TerreStar Networks and SkyTerra Communications plan to offer dual-mode (satellite and cellular) services in North America to dual-mode smart phones aimed at a niche market of public safety, law enforcement and government users.

Based on past experience, one might wonder whether that market opportunity is big enough to support much of a business for both providers.

ABI Research, for example, suggests three million satellite-capable LTE smartphones will be shipped in North America in 2012. But there might be something more going on here.

The Federal Communications Commission allows satellite operators to offer simultaneous satellite and cellular services over their licensed satellite spectrum. That suggests a possible play as a fourth-generation access play in rural markets where it is very expensive to supply such capability.

“We believe that the greenfield satellite companies’ plan is to forge short-term roaming partnerships with AT&T and oth…

Danger for Service Providers If Confidence Doesn't Climb

Led by a dramatic decline in the expectations of U.S. consumers for the near future of the U.S. economy, the most recent results of the Royal Bank of Canada Consumer Attitudes and Spending by Household Index show a marked downward shift for July 2009, continuing the slide begun last month.

"Consumer confidence is resetting to the levels seen earlier this year and is likely to remain there until there is concrete evidence of a turnaround, "says RBC Capital Markets Managing Director Larry Miller.

Should those trends continue, service providers will have to worry anew that relative stability in communications and entertainment servcies markets will take a hit more pronounced than what they have seen to date.

So far, there seems to be minor damage to broadband access revenues and a growing trend to substitute prepaid for postpaid mobility. Some surveys suggest only a few percent of broadband subscribers say they actually have cut off service. A recent Strategy Analytics survey s…

Apple iPhone, BlackBerry are Most-Profitable Mobile Devices

Just two mobile devices account for the overwhelming share of global handset profits, says Deutsche Bank analyst Brian Modoff. Between them, the two devices account for 35 percent of global mobile operating profits despite representing just three percent of global market share.

In 2009, the two devices will move up to five percent market share but claim 58 percent of
total operating profits.

Smart phones hold only about 13 percent of total cellphone sales globally, but are growing, despite a drop in the broader cellphone market in the first quarter.

The iPhone, which is exclusive to AT&T, draws the fattest subsidy at about $400 a phone, Modoff said. BlackBerries draw subsidies averaging $200 from U.S. operators. Basic cell phones get a $100 subsidy. Manufacturers of basic phones make next to nothing, unless they have enormous scale.

Nokia, the industry leader, manufactured 46 percent of the units sold last year but earned 55 percent of the profits, Modoff estimates.

5% of U.S. Universities, Colleges Have Deployed Unified Communications Campus-Wide

About five percent of U.S. university and college campuses already have deployed unified communications campus-wide, according to a recent survey by the Association for information Communications Technology Professionals in Higher Education. Another four percent of respondents say they have extensive deployments, but to a limited number of people.

About 44 percent report having limited deployments or trials underway. About 26 percent are in planning stages. About 20 percent have no UC projects or planning underway.

The survey featured responses from 103 institutions.

24% of U.S. Mobile Users Possibly Are No Longer Voice Centric

About 13 percent of U.S. mobile phone owners say they "never" make calls on their devices. Altogether, about 24 percent make calls once a week or less, according to Lightspeed Research. That's a shocking statistic for devices known as "mobile phones."

One might draw several conclusions from the results. It is possible that, for many users, the mobile is helpful, but not something that adds value on a daily basis. The other likely conclusion to be drawn is that text communications are, for many users, a preferred or reasonable substitute for voice, as email has displaced a huge amount of voice communications.

If so, the findings indicate the clear emergence of usage patterns centered around texting or mobile Internet activities rather than voice, and the importance for mobile service providers of migrating revenue models to primary reliance on data-related services and applications.

In many cases, it would seem to make sense to lead with data plans and features, a…

Will Skype and Google Voice Dominate Mobile VoIP?

Skype, the global leader in PC-based VoIP, has been preparing for mobile-based VoIP as well, but Google Voice might wind up being the market leader in mobile VoIP, says Jeffrey Lindsay, Sanford A. Bernstein analyst.

"It's probably the biggest current threat to Skype," says Lindsay. Ultimately, Google might grab as much as 60 percent market share in the mobile VoIP space, he predicts.

40% U.S. Mobile Broadband Adoption

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To the extent that U.S. consumers are not using mobile broadband, availability is not the problem.

Well over 90 percent of locations now are 3G enabled.

ComScore says the United States caught up with Western Europe in the adoption of 3G in June 2008, with 28.4 percent of American mobile subscribers having 3G devices versus 28.3 percent in the largest countries in Europe.

U.S. 3G penetration went past 40 percent in the first quarter of 2009, says wireless data analyst Chetan Sharma.


Enterprise C Suites Now are "Digital"

A generational shift is occurring in U.S. enterprise "C" title ranks, but one trend already is clear: the Internet has become the top information resource. Some 81 percent of respondents 50 or younger are on the Internet daily while 62 percent of executives older than that did so.

Also, most C-title executives at firms making more than $1 billion in annual revenue have shifted their information-gthering strategies away from traditional media and to Internet-based media.

When consuming "traditional media" at work, 70 percent of respondents say they get that information online. When consuming "traditional broadcast media" at work, 69 percent use the Internet.

C-suite executives do their own searches. That is a sharp break from the way most such executives probably worked decades ago, when "middle managers" gathered information and passed it up to the C suites. These days, the C suite knows it can get information directly, and does so.

Also, video and…

U.S. Will Leap Over Europe in Mobile Advertising Within 2 Years

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Alex Moukas, CEO of Velti, the top European mobile ad company, said he fully expects the U.S. to leap ahead of Europe in mobile advertising within two years. That would be a switch, as U.S. practitioners have lagged their European counterparts up to this point.

So far this year, mobile advertising is the second most-popular marketing channel, following the Web.
Campaigns sending traffic to site increased 10.46 percent in June, says Millenial Media. The study also found that the average number of monthly page views per user was 99 page views.

Verizon Wireless to Voluntarily Limit Exclusive Handset Deals

In a wise and fairly clear attempt to head off more regulations, Verizon Wireless now says it will allow small wireless carriers to use its popular and "exclusive" handset models after six months. Smaller wireless providers have been complaining that exclusive handset deals represent unfair competition.

"Any new exclusively arrangement we enter with handset makers will last no longer than six months, for all manufacturers and all devices," Verizon Wireless CEO Lowell McAdam has told key Congressional lawmakers.

Some consumer advocates also object to handset bundling, for similar reasons. But some economists have pointed out that bundling promotes competition and innvoation, as it provides incentive to introduce new features and models. "Exclusivity arrangements promote competition and innovation in device development and design," McAdam says. "This new approach is fair to all sides."

It isn't immediately clear whether the new policy also app…

Online is the Only Growing Ad Business

ZenithOptimedia has raised its forecast for Internet advertising to10.1 percent global growth globally in 2009, up from the 8.6 percent it predicted in April 2009. By 2011 ZenithOptimedia expects online to account for 15.1 percent of all ad expenditure, up from 10.5 percent in 2008.

Most of this growth will come from paid search,. In the United States search advertising to grow 20 percent in 2009, while traditional display grows three percent and classified grows 1.8 percent.

The Internet is the only medium ZenithOptimedia expects to grow in 2009.

Does National Broadband Policy Make a Difference?

How important are national broadband policies in explaining broadband adoption rates?

Apparently not so important, according to economists at the Phoenix Center for Advanced Legal & Economic Public Policy Studies.

In fact, "91 percent of the differences in fixed broadband adoption rates in the 30 OECD member countries can be explained by reference solely to differences in income, education, population age, and other demographic factors that bear little relationship to broadband or telecommunications policy," the Phoenix Center says in a new study.

That isn't to say government regulations and policies are unimportant. It's just to say that such policies explain about nine percent of adoption rate results.

Big Brand Marketing: What's Up, What's Down?

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At a time when big brand marketing budgets have been cut about 20 percent on average,some channels, at many companies, are getting more funding: social media, Web site development, online advertising, and email marketing.

Traditional media is taking a hit, though. About 67 percent of big brand marketers say they have decreased spending on TV, print, radio and magazines (click on image for larger view).

About 52 percent say they have decreased spending on direct mail.

But 47 percent of respondents say they are spending 47 percent more on social media. About seven percent say they are spending less.

About 44 percent are spending more on Web sites, while 22 percent say they are spending less. Online advertising is being hiked at 40 percent of firms, while declining at 27 percent of companies. Email marketing is up at 38 percent of firms and down at 11 percent of big brand companies.

Perhaps significantly, the top two reasons why spending is being cut, the logic is a combination of tight bu…

60% of Marketers Shifting Spending to Social, Mobile, Online

Six in ten marketers surveyed by Forrester Research say they will increase their interactive marketing budgets by shifting funds from traditional media. Among the channels, it looks like direct mail will be among the biggest losers.

About 40 percent of respondents say they will be cutting it in favor of social, mobile or online. But 35 percent of marketers also say newspaper advertising budgets will be pared. Some 28 percent say they will shift budgets away from magazines while 12 percent say they will shift funds from TV campaigns.

But you might not see most of the movement until the current recession ends, as ad budgets overall are so tight that marketers cannot experiment much.

Among the interactive channels, Forrester sees social media and mobile marketing spending expanding significantly between 2009 and 2014, with social media jumping by 34 percent on a compounded annual basis and mobile marketing increasing by 27 percent.

But these are young channels, at least as compared with r…

Social Networking Ad Spend up 13 Percent in 2010

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After about a three percent dip in 2009, U.S. ad spending on social networks is expected to climb 13 percent in 2010, with another eight percent rise in 2011, researchers at eMarketer say.

Nokia, AT&T to Unveil Phone for Social Networking

AT&T plans to sell the Nokia Surge, a handset optimized for social networking and messaging, starting July 19, 2009. AT&T will sell the Surge for $79.99 with a two-year service agreement and after a mail-in rebate. Without the contract, the phone will sell for $130.

The phone will use an advanced Web browser with Flash support to view sites in full HTML or watch YouTube videos. Additionally, AT&T will supply the phone with their popular network features, including AT&T Navigator for GPS navigation, AT&T Music for Napster music support, and AT&T Video Share for one-way video conference-like calling.

Nokia is not positioning this phone against their high-end Nseries or Eseries smart phone devices, but more as a mid-range smart phone, which many of us would argue is the sweet spot for users who are big on social networking but unable or unwilling to spend much more for a smart phone.

The Symbian S60-based smart phone features a full QWERTY keyboard, a browser with…

France Telecom Gets Aggressive About Content

Many observers think telcos, which have no legacy core competencies in content, will not be much of a factor in the video market to the same extent that cable operators have become. France Telecom suggests those views might be wrong.
Last year, France Telecom launched five channels featuring films and TV shows from several major U.S. studios. France Telecom subscribers could get Warner Brothers "Harry Potter" movies or "The Sopranos" on their TVs.
France Telecom also has exclusive rights to popular soccer matches by France's Ligue 1 to create a mini-ESPN that French consumers can get only by signing on with Orange.
And the move seems to be paying off. In the last year, sports and TV offerings have helped boost Orange's TV customer base by 69 percent.
There are a couple of ways this could play out in the U.S. market. DirecTV, which does own exclusive National Football League programming, might wind up wholely owned by a U.S. telco. Beyond that, firms such as V…

Will Google Voice, Google Wave be Business UC Contender?

Some people might not think Google Voice and Google Wave are contenders in the business unified communications business. But executives at Cisco Systems are not among them.

Officials at Cisco Systems Inc. say they are closely watching Google Inc.'s aggressive foray onto their unified communications turf and plan to respond quickly by boosting the capabilities of Cisco's offerings.

Cisco's announcement in late June that it plans to offer at least some pieces of its IP voice technology as a hosted service could be viewed as a direct response to Google's recent move to start limited release of its Web-based Google Voice and Google Wave communications tools.

Though Google Voice and Google Wave might be seen primarily as consumer offerings, they could provide value for smaller businesses. And as often is the case in communications, tools that start out in the consumer space frequently wind up adding more features over time, ultimately becoming useful for more business users, a…

Wireless: Fixing What Isn't Broken?

The Federal Communictions Commission says it wants to examine exclusive wireless carrier deals with handset makers because it may be "anti-competitive. But Bernstein analyst Craig Moffett says "it’s laughable" assertion.

Moffett argues that the Federal Communications Commission and the Department of Justice are wasting their time reviewing the wireless market. Wireless providers don't have market power, handset manufacturers increasingly do.

Apple has taken any power that AT&T has had, Bernstein argues.

Wireless prices are falling as carriers compete, handset makers are gaining more power in the ecosystem and the wireless game is about apps, a game carriers cannot control.

"The argument that handset exclusivity is anticompetitive also comes at a curious time," says Moffat.

"Indeed, a case can be made that handset makers – well, Apple, actually – have played one carrier off against the other in virtuoso fashion, and are on the brink of stealing the wi…

O2 Offers 600 Free Tweets

The UK's second-largest largest mobile phone network, O2, will allow customers to use Twitter for free, up to 600 total messages, starting in August.
The move says something about the cost of sending and receiving text messages in the U.K. market, the new role social networking is playing in driving mobile data usage and suggesting the growth of a new niche within the mobility space.
As Blackberry devices catered to email centric users, and iPhones catered to mobile Web users, we should now see the emergence of service plans, and perhaps devices, optimzied for social networking or texting.
"We believe that mobile will soon become the most popular way of accessing social networking sites, giving real-time access to tweets and status updates wherever you are," says Antony Douglas, the head of content at O2.
O2's move follows Vodafone's earlier move to allow free Twitter status updates, though Vodafone's offer is billed as a "limited time" offer.
The m…

U.S. Online Advertising Grows One Percent a Year

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The Internet’s share of total media ad spending is rising by at least one percentage point every year, partly because marketers are spending more on Internet ads, and less on ads in traditional media.

As often is the case for businesses with a key technology component, productivity improvements are not captured accurately by retail prices or spending.

Online advertising works better than offline media, so campaigns sometimes, perhaps most of the time, can be run for less money than has been the case in the past. As the shift to online media continues, overall advertising spending by brands can decline even as effectiveness increases.

In the United States, eMarketer projects that the online share of ad dollars will grow from nearly 10 percent this year to slightly more than 15 percemt in 2013.

16,000 More Cell Sites Needed for Ubiquitous Mobile Broadband

About 23.2 million U.S. residents live in areas where 3G wireless broadband service has not yet been deployed and that about 43 percent of roads lack such coverage, says CTIA.
It will require an additional investment of about $22 billion to reach those areas with a dual-mode network.
The study says about 16,000 new cell sites, including towers, will need to be constructed and 55,000 existing sites will need to be upgraded to create a ubiquitousnational mobile broadband network.

Mobile Broadband: New Business Models Needed?

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The good news is that mobile broadband--using PC dongles or cards or mobile handsets--is growing fast. The bad news is that all that new data traffic is straining mobile networks.

Irish regulator ComReg, for example, notes that there were 1.27 million broadband subscribers at the end of March, up 28 percent from a year earlier and up six percent from the previous quarter.

But this has been driven mainly by mobile broadband subscriptions, which have almost doubled over a year with 90.6 percent growth.

And Ericsson predicts that mobile broadband connections will surpass fixed broadband connections as soon as 2010 (click image for a larger view).

Originally "dimensioned" to cope with small-screen devices used occasionally, 3G networks are having to cope with laptop-sized video downloads, hours-long social networking sessions and rich Web 2.0 sites which download content "in the background".

In some cases, says researchers at Telco 2.0, the revenues from mobile broadband …

Sprint Drops Bombshell

Sprint has decided to outsource all of its network operations to Ericsson as part of a seven-year deal that indicates Sprint no longer considers network operations a core function, or something that allows it to create customer-facing value.

Network operators have been outsourcing some operations and functions for years. But no tier-one carrier has gone this far. Sprint will continue to own its network and make investment and equipment purchase decisions.

Sprint personnel will maintain first-line, customer-facing operations. But Sprint no longer considers the day-to-day management of its network a core source of market differentiation.

The move does not indicate any change in the perceived value of network ownership. But the devaluation of routine network management is shocking for an industry where most employees once worked in network operations.

Apple iPhone Proves Disruptive

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Apple and Nokia are on radically different trajectories, at least where it comes to smart phone market share, say analysts at Generator Research. The firm believes Nokia will tumble from about 40 percent share today to just 20 percent in 2013.

Apple's share, meanwhile, should accelerate and hit 33 percent of the market at the same point.

Apple would match Nokia's share sometime in 2011 and ship as many as 77 million phones that year.

Observers rightly point out that the mobile handset is a complicated business with lots of subtle angles. It also appears to be a business where new attackers can dislodge global incumbents.