Archive for T-Mobile

>The Future of Phone Plans, Ideally

>Gotta give it up to Apple, they know how to dominate news cycles. One of the smaller announcements they made at WWDC this week was iMessage, their iOS-only instant messaging program that is tied in with the existing messaging app. At first, attention was drawn to how it would compete with Blackberry’s existing BlackBerry Messenger app, something that has kept many a CrackBerry addict from leaving the platform. At this point, iMessage does make a lot more sense for people compared to BBM, simply because the iPhone is a crazy popular phone, the iPod Touch is an immensely popular mp3 player, and the iPad is still the tablet to beat (and no one has come close yet). BBM is on the BlackBerry PlayBook, but quite frankly, no one really bought it. BBM is one of the last things to hook current users in, it was a space where RIM really had no competition, but that now has been challenged.

Now, the launch of iMessage has brought up a very different question: Do we really need SMS at all? Its a well known fact that text messaging has been the longest, most widespread, and far most egregious instance of wireless providers overcharging for a service. Each text message sent is really only a few bites of information being sent around, and yet people pay 20 cents per without a plan. Even at $20 for unlimited, you’d have to send millions for the price to be justified. But before the dawn and success of the smartphone, it was the best way to fire off a small tidbit of conversation. Now that simply isn’t true. RIM, Apple, soon Windows Phone, and even some rumors of Android, all have or will have alternative quick messaging options built into their phones.

I am most certainly not the first person to notice how this may shake up the industry. Nilay Patel (formerly of Engadget) wrote up a great editorial on This Is My Next calling for the death of the phone number. He points out that Apple, Google, and Microsoft are all getting into the position of eliminating the carriers’ plans. None have gotten to that point yet, but its definitely a possibility in the near future. I don’t think the phone number should die. Its incredibly useful and really isn’t that different from a username, and we still need them for business if nothing else. But I do propose a drastic change.

For years, the carriers have refused to admit that they are just dumb pipes, managing networks that allow the transfer of data in many different forms to various devices. The separation of voice from texting to internet data usage is ludicrous at this point because the internet can do all of these things very easily, ultimately using their existing network. All one carrier has to do is accept that role, realize that all that consumers want is for them to fulfill that role, and come up with the following plan:

Throw away your preconceived notions of plans. There will be no more set allotment of minutes and texts and internet usage. All you do is pay for a bucket of usage (metaphorically speaking, of course). The carrier merely sets a rate for how big your bucket is. What you do with that bucket is entirely up to you. Voice calls and video conferencing would be done just like existing VoIP services like Skype, and texts wouldn’t really be texts, but data sent through apps on your device. The phone number can hang around still for these purposes, although most people could easily get by using Facebook Chat these days. In areas where 3G is scarce or nonexistent, traditional calls and texts could be done, but there’s no reason to charge more for doing so. Your web browsing, app downloading, and content streaming would all come through the same usage allowance as your calls. I know many people pay for way more minutes than they actually use simply because there’s no cheaper option available. The buckets would eliminate this problem.

Beyond monthly costs, there’s one other big advantage to this system: device freedom. Right now, carriers want you to have a separate plan for a 3G connected tablet, or get a tethering plan, which costs a lot extra for using your existing data connection that you already pay for. But with the bucket system, you just pop your SIM card into a tablet or another phone, even a computer, and just keep on going. ASUS is attacking this problem head on with two different devices. The Padfone turns your phone into a tablet and there’s really no reason for the carrier to know about it. The Eee Pad MeMo 3D is a 3G-enabled Android tablet that comes with the MeMic Bluetooth handset that is the perfect size to hold up to your face to talk, or use as a remote control. A carrier using the bucket system wouldn’t care at all what device you were using since its now all the same stuff to everyone involved.

The only sacrifice that would be made for consumers would be the loss of unlimited data plans. But let’s face it, they are on their way out anyway. AT&T ditched them a while ago, and Verizon is maybe only weeks away from following suit. T-Mobile’s plans now have roofs that don’t cost extra to pass, but you’ll have your service throttled significantly down in speed. Sprint aims to be the final carrier to offer the truly unlimited data plan. But the bucket system wouldn’t need unlimited most likely anyway, under one condition: What you do when connected to Wifi does not touch your limit. This only makes sense because the wireless provider isn’t the pipe, the ISP is. AT&T’s limited data plans do this now, but talking on the phone should follow this same rule. T-Mobile is the only carrier that chooses to allow WiFi calling, but all WiFi enabled phones on all carriers are capable of it. Since the bucket system does away with minutes, they’d have no reason to continue this practice. The transition might be hard to explain to the average consumer at first, but there could easily be simple tools to convert minutes used and texts sent from their previous plans into gigabyte form.

The problem is getting the carriers on board. As far as I’m concerned, only one carrier would actually go for it at this point: Sprint. AT&T and Verizon would certainly not jump in on this until someone else did first. T-Mobile was a progressive company, but due to the potential AT&T buyout, they’d never make such a drastic change. That leaves Sprint, and they now hold the title for most progressive, as proven by their crazy move to integrate their services with Google Voice. They have a network capable of handling it and the need to attract more customers. And I know I’m not the only person attracted to this idea. Carriers could still offer contracts for those who want cheaper devices, something that would keep them very happy. This would also push a lot of people into a smartphone, meaning more sales revenue for manufacturers. I think that, if done properly, everyone involved would benefit greatly from this kind of arrangement. Now to see if it ever actually happens.

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>Google Announces Google Wallet, Google Offers

>Today, Google announced possibly one of it’s biggest initiatives to date, Google Wallet. Wallet will attempt to almost completely replace your wallet, money clip, or pocket book with just your smartphone. Using Near Field Communication, or NFC, chips, phones will be able to interact with existing MasterCard PayPass equipment at the register of stores, and of course new equipment will be coming out for it on both the consumer and business side.

When you first load the Google Wallet app up, you can enter in existing MasterCard (for now, more to follow) credit or debit cards, as well as a prepaid Google Card for you Visa and AmEx users. You will select a PIN, just like its plastic counterpart. When you get to checkout, you tap your phone to the PayPass reader, enter the PIN, and you’re done. But that’s not it. Vendors will also allow you to tie your loyalty and membership cards to your phone as well.

Even if you’re not interested in ditching the leather and plastic, Google will be launching Google Deals as well. It’s only in beta and available in Portland, New York City, and San Francisco for now, but more will be coming soon. While it may just look like a Groupon clone, sending you a single local offer a day, it does tie in with Wallet and also includes check-in deals (like 4Square) and you’ll start seeing NFC equipped ads. The email will have links to print the coupon or have it sent to your Wallet. And Wallet will take care of the whole thing in one fell swoop. So when you go to buy your jeans, it will take off the coupon amount, add in loyalty bonuses, and pay, all in one tap.

Overall, it’s pretty cool stuff, but there are some security concerns. Google promises that all of your sensitive information will be contained in the NFC  chip only, and that there are multiple layers of security under the PIN code, but no electronic system is perfect. NFC payments have been huge in Japan for many years, so it is a doable system, it just remains to be seen if many companies other than the ones mentioned will get behind it. That said, Google is off to a strong start, partnering up with MasterCard and big companies like American Eagle, Subway, RadioShack, Walgreens, CVS, and many gas stations.

The other big problem is that right now only one phone is equipped with the NFC chip: the Samsung Nexus S, and that phone is only on the two smallest carriers in the US, Sprint and T-Mobile. And so far, only Sprint is on board. Google did say that Motorola and HTC are also committed to making more NFC equipped devices soon, but until a few really big ones hit on every carrier (and a bump from Apple couldn’t help either), then it remains to be seen if Wallet will take off, or if it will end up like their last W project: Wave. The trials start immediately in NYC and San Fran, with nationwide launch scheduled for later this summer. We’ll keep you posted here!

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Bombshell: AT&T to Buy T-Mobile *UPDATED*

While talks of someone buying T-Mobile is nothing new, there’s been a lot of rumors that it might be Sprint doing it the last few weeks. Deutsche Telekom, T-Mobile’s parent company, has been losing money on T-Mobile for years and has been looking to get rid of it to focus on their European branches.

AT&T just announced that they have agreed to buy T-Mobile to the tune of $39 billion, $25 billion of that cash, the rest stock options. AT&T says it will be using T-Mobile’s existing network to bolster the famously precarious (in certain locations) AT&T network, and will use T-Mobile assets to push it’s 4G initiative to an additional 46.5 million Americans over the next few years.

Assuming they get the green-light from the government, the acquisition will take around a year. After that time, AT&T will become the only GSM carrier on a national level (some rural carriers still use it), giving them around 130 million subscribers nationwide. This will make them the largest US carrier, passing Verizon’s 102 million (as per the final quarter of 2010).

A $39 billion acquisition that will bring the major wireless competition down to just 3 carriers will have a very hard time going through the Department of Justice and FCC, most likely though. We’re in for a very long road ahead on this one. AT&T will be hosting a conference call on this tomorrow, so keep checking back here to find out more information.

If the buy out goes through, what will this mean? T-Mobile subscribers will eventually become AT&T customers in most areas throughout the country. Often times, 3rd parties gain some small areas, like how AT&T gained some Alltel customers when they were purchased by Verizon a few years ago. WHen the dust settles, there will be a lot less competition. Even though they were a small company who wasn’t making money, T-Mobile helped keep the monthly price of wireless plans down. With Sprint being the only company that doesn’t have the mass that Big Red and Ma Bell have, you can expect costs to go up. Someone’s got to pay that $39 billion bill, right? You can check out the full press release yourself right here.

UPDATE: Got my hands on the T-Mobile press release. Looks like T-Mobile will be working to keep as much T-MObile staff as possible, which is good news, and confirms the estimated 1 year timeline for the transition. T-Mobile claims that this will reduce Deutshce Telekom’s debt by about 31%.

A lot of people are asking what this will mean for T-Mobile customers. While there haven’t been any specifics on the transfer of contracts or anything of that nature, here’s what you can expect to happen (based on previous buyouts):

– Your contract will not be cancelled. When one carrier buys another, they also buy these contracts and are required to honor them. This means you’ll keep your phone, number, and plan as is. Should they decide to not honor T-Mobile’s plans, it will a breach of contract on their part, meaning you can leave without penalty. However, when you become eligible for an upgrade, they are not required (and therefor most likely won’t) honor your old plan. This means that for as long as you don’t upgrade and get a subsidized price for the phone, you can keep your plan for as long as they let you. But if you want to buy an iPhone (the common T-Mobile question), you will most likely have to move to an AT&T plan.

– If this buyout is like the Verizon/Alltel one, then some markets will find themselves absorbed by other carriers to prevent monopoly (though it could be argued that this buyout would cause one anyway). In this case, T-Mobile subscribers in those areas will be given to Verizon, Sprint, or smaller local carriers. If this is the case (though it’s doubtful since T-Mobile is mainly just in urban areas), then the same scenario I spelled out above will most likely hold true.

Developing…

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