Contracts

Prepaid service growth outpaces contracts

Phil Goldstein — Wed, 15 Oct 2008 11:43:39 -0400

Prepaid cell phone growth has outstripped contract-based service two to one in 2007 and into 2008, a new study has found.

The research, by Informa Telecoms & Media found that at the end of 2007 there were 2.33 billion prepaid subscribers worldwide, and that prepaid service produced $241.9 billion in revenue in 2007 for mobile operators, with the Asia Pacific market being the largest prepaid market.

The report also found that at the end of the year about 28.9 percent of reported subscriptions worldwide will be from people who have second or third SIM cards.

For more:
- see this article

Related Articles:
J.D. Power: Flat-rate prepaid pricing plans a hit
Report: Virgin Mobile best prepaid customer service

Supreme Court rejects T-Mobile request

Sue Marek — Tue, 27 May 2008 11:41:36 -0400

T-Mobile USA received a big blow today as the Supreme Court rejected the company's appeal in three cases involving the legal remedies available in millions of cell phone contracts. At issue is whether state laws that limit the ability of companies to prohibit consumers from banding together to pursue class action lawsuits are preempted by federal law. T-Mobile argued that federal law, which generally requires that arbitration clauses be enforced, overrules the state laws that limit the ability of companies to ban class actions. AP story

Is China finally moving to 3G?

Sue Marek — Tue, 27 May 2008 11:30:49 -0400

China reportedly is ready to issue 3G licenses after six years of promises and delays. While announcing it plans to restructure China's telecom service providers, China's regulators also announced that three 3G licenses will be granted once the restructuring is complete.

The Chinese government has been delaying the 3G process in a bid to get its home-grown standard, TD-SCDMA, up to par with WCDMA and CDMA 1xEV-DO. To date, the country's carriers have spent a significant amount of money on TD-SCDMA trials and may possibly offer services during the 2008 Olympic Games this summer.

The impending 3G awards should be good news for the world's vendors, which have been banking on China opening up the market to 3G and bolstering their business. There should be some aggressive fighting for contracts, especially when Huawei and ZTE have been fighting for market share outside of China.

For more about China's 3G plans:
- read this Unstrung article

Related stories:
- Analyst: China's 3G still years away. See this China 3G story
- China to begin home-grown 3G technology trial. See this TD-SCDMA story
- China continues to hedge on 3G. See this 3G in China story

FCC may cap early termination fees

Sue Marek — Wed, 21 May 2008 11:49:51 -0400

According to the Associated Press, the FCC is quietly negotiating with wireless carriers to reduce termination fees that carriers charge customers when they cancel their contracts. Many carriers still charge customers $175 for quitting their service contract early. The FCC is supposedly proposing that wireless carriers give customers up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill to cancel their service without penalty.

The plan would not put an end to all early termination fees, however but would reduce the fees based upon how long the customer sticks with the contract. In exchange for agreeing with the plan, wireless carriers would not be held accountable in state courts when they are sued by angry customers over the termination fees.

Many operators already pro-rate their early termination fees, a practice first championed by Verizon Wireless back in 2006. T-Mobile, Sprint, AT&T and Verizon Wireless have all said that they will pro-rate their fees.

For more details:
- see this AP story

Related stories:
T-Mobile USA to pro-rate ETFs, too. See this T-Mobile story.
AT&T changes ETF policy. Read this AT&T story.
Verizon makes good on ETF promise. See this Verizon article.

No deal: Earthlink pulls plug on Philly WiFi

Brian Dolan — Wed, 14 May 2008 11:06:28 -0400

Following up on our report earlier this week, Earthlink has pulled the plug on its $17 million municipal WiFi network in Philadelphia after failing to reach an agreement with the city to take over the network. Originally, reports claimed that Earthlink would give the city until the end of this week to come up with a deal, but now the company says no deal could be reached. City officials told the Wall Street Journal that the network would cost taxpayers millions of dollars each year.

"It's been an unfortunate situation," said Earthlink CEO Rolla Huff. "It was a great idea a few years ago... but it's an idea that simply didn't make it."

Earlier this year Earthlink announced that it was no longer interested in the municipal WiFi business. The Philadelphia network had reached about 80 percent of its build-out. Earthlink has already stepped away from contracts with San Francisco, Houston, New Orleans and others. The only big contract outstanding is now Anaheim, CA, according to Earthlink.

For more on Earthlink pulling the plug:
- read this WSJ report (sub. req.)

Earthlink to Philly: We will pull the plug

Brian Dolan — Mon, 12 May 2008 12:00:51 -0400

Earlier this year Earthlink announced that it was no longer interested in the municipal WiFi business, but after investing $20 million in a metro-wide WiFi network project in Philadelphia back in 2006, the company is still trying to disentangle itself. According to a report in Metro Philadelphia, Earthlink has given the city until the end of the week before it pulls the plug on the WiFi network, which has reach 80 percent of its build-out. Earthlink wants Philadelphia to devise a plan to take over the network or sell it to a third party by week's end. The company already stepped away from contracts with San Francisco, Houston, New Orleans and others. The only big contracts outstanding are Philly and Anaheim, CA, according to Earthlink.

For more on the deal:
- read this article from CNET

Report: Huawei to sell mobile devices unit

Thu, 08 May 2008 06:59:57 -0400

Huawei is mulling a sale of a multi-billion dollar stake in its mobile devices unit to a foreign investor that could connect it with U.S. carriers. The renewed interest in such a deal comes after a failed $2.2 billion bid by Bain Capital and Huawei for 3Com. Since 3Com had contracts with the U.S. government for some security services, the deal did not pass the regulatory process.

Huawei has risen as a competitive force on the networking side of the wireless industry, but the company has had some difficulty breaking into the competitive handset market in the U.S. and Europe. In 2006 Huawei inked a deal with Vodafone to supply 3G handsets to the various carriers through Europe. For handsets in the U.S. however, Huawei only has one announced carrier partner: MetroPCS.

For more on the report:
- read this WSJ article (sub. req.)

Vodafone inks 10-market iPhone deal

Tue, 06 May 2008 06:59:55 -0400

Apple announced an iPhone carriage deal with Vodafone Group for ten countries, including one market where Apple already has a carrier deal in place. Vodafone will sell the iPhone in Australia, the Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa and Turkey sometime this year. The iPhone is currently sold in just a handful of markets, including the U.S., U.K., Germany, France and Spain.

While Vodafone has been passed over for iPhone deals in the past, including markets like the U.K. and Germany, winning a distribution deal in Italy is sure to stir the pot in that market: Telecom Italia already has a deal with Apple to distribute the iPhone. Neither carrier has provided details on the arrangement, however. According to a report in the Wall Street Journal, 91 percent of Italian mobile users do not have contracts. They use prepaid services. It might take two carriers to convince the masses to ink two-year contracts.

For more on the iPhone deals:
- read this report from the WSJ (sub. req.)

APC buys bankrupt MVNO Movida

Mon, 21 Apr 2008 06:59:57 -0400

Latino-focused and recently bankrupt MVNO Movida has been acquired by Cozac, a subsidiary of APC Wireless, which acquired Liberty Wireless earlier this year. APC plans to keep Movida's pricing plans and subscriber contracts the same for Movida users, but aims to improve the user experience. APC's stated specialty is facilitating the relationship between wireless producers and merchants.

For more on the acquisition:
- read this APC buys Movida release

SPOTLIGHT: GSA awards $93 million in contracts

Thu, 17 Jan 2008 06:59:52 -0500

Booze Allen Hamilton, iSys and Avalon Technologies have been awarded contracts to help the government agencies manage and track their wireless devices. The firms will help agencies review their wireless device inventories and calling plans and figure out ways to pool their minutes and reduce their costs. Article

Alltel wins first round of Verizon ad suit

Tue, 08 Jan 2008 06:59:57 -0500

According to a statement from Alltel, late last week a U.S. District Judge in Richmond, Va. denied Verizon Wireless' motion for a temporary restraining order that would have required Alltel to stop airing its Anytime Plan Changes television advertisements (watch one of the ads right here).

The ads claim that Verizon Wireless and other carriers' customers have to extend their contracts when they change calling plans. While it's true that Verizon Wireless customers had to extend their contracts whenever they changed calling plans in the past, the carrier changed its policy and did away with the requirement effective October 7, 2007.

"We are very pleased with Friday's ruling and that the court recognized Verizon did not have grounds for the injunction it requested," said Laura Cook, senior vice president of marketing communications for Alltel Wireless.

For more on Alltel's advertising:
- check out the original article from last week

Verizon Wireless sues Alltel for allegedly false ads

Fri, 04 Jan 2008 06:59:58 -0500

Verizon Wireless has filed a lawsuit against Alltel for allegedly false advertising. Alltel has run a series of ads that claim that Verizon customers have to extend their contracts when they change calling plans.

"Whatever merit this comparison may have to other carriers, in the case of Verizon Wireless, the supposed 'advantage' is pure fiction," Verizon Wireless stated in its complaint.

While it's true that Verizon Wireless customers had to extend their contracts whenever they changed calling plans in the past, the carrier changed its policy and did away with the requirement effective October 7, 2007. The carrier's change of heart came a few days after the state of Minnesota sued Sprint for a similar practice of extending customers' contracts.

For more on Verizon Wireless' lawsuit:
- read this article from RCR
- see this video of the Alltel commercial

AT&T: Mobiles killed the pay phone

Mon, 03 Dec 2007 06:59:58 -0500

It should come as no surprise that AT&T has announced its intention to exit the pay phone business by the end of next year because most consumers don't use them anymore: they use their mobile phones. The announcement affects pay phones in AT&T's traditional 13-state service area, which includes California in Texas. BellSouth, which AT&T acquired late last year, exited the pay phone business before the acquisition took place. AT&T said existing contracts will still be honored as it phases out the business. Existing independent pay phone providers are expected to take over once AT&T pulls out. AT&T said that pay phones have declined from about 2.6 million phones in the US in 1998 to about 1 million pay phones today.

For more on AT&T pay phone exit:
- read this press release

ALSO NOTED: Number portability for India; Virgin Canada goes postpaid; and much more...

Tue, 13 Nov 2007 06:59:50 -0500

> Number portability to hit India soon. Article

> Vodafone swings to a profit. Article (WSJ sub. req.)

> Virgin Mobile Canada offers postpaid contracts: an about-face from its former marketing campaign, which called longterm wireless contracts a disease called "the Catch." Article

And Finally... China Mobile uses yaks to transport base stations up Mount Everest. Article

Sprint makes switching contracts easier

Thu, 08 Nov 2007 06:59:57 -0500

In an effort to improve its customer service, Sprint Nextel has rolled out a number of programs that include pro-rated early-termination fees and the ability to switch rate plans without having to renew contracts. Verizon Wireless led the charge with pro-rated ETFs last year and now most of its competitors have followed suit. Sprint only announced that a pro-rated ETF would be implemented some time next year, however, the carrier did not spell out any details.

Sprint is also instituting a welcome call from a customer care representative, who will thank the customer for his or her business and answer any immediate questions. (Sounds expensive.) The carrier will also provide courtesy calls for new customers who incur significant overage charges during their first six months of service. The carrier also plans to reward long-term subscribers with handset upgrades and other loyalty rewards, while new customers can try Sprint's service "risk-free" for 30 days.

For more on Sprint's customer care moves:
- read this company press release

T-Mobile USA to pro-rate ETFs, too

Thu, 08 Nov 2007 06:59:55 -0500

First Verizon Wireless pro-rated their early termination fees, then AT&T did. Today both Sprint Nextel and T-Mobile USA have committed to declining their ETFs over the course of a customer's contract starting sometime next year. Neither carrier would discuss the specifics of the plan, but T-Mobile USA said the new policy would only affect new customers and existing customers who change their contracts with the carrier.

For more on T-Mobile USA's plan:
- read this article from RCRNews

Related Articles:
FCC: ETF regulation coming this year Article
Websites alleviating ETF woes Article
Should states oversee ETFs? Article

AT&T changes ETF policy

Tue, 16 Oct 2007 06:59:58 -0400

AT&T seems to be following Verizon Wireless' lead: Beginning in November, the carrier said it will reduce the early termination fees for customers who exit their phone contracts before those contracts run out. Just like Verizon Wireless subscribers, AT&T subs will pay an ETF that is based upon the amount of time that has passed since the contract went into effect. Also, existing subscribers who change their plans will not have to extend their agreement or sign up for a new one.

AT&T is also offering a new rate for mobile phone calls to Mexico landlines: 5 cents a minute for customers who sign up for AT&T World Connect Mexico between October 15 and January 15, 2008. Wireless to wireless calls to Mexico will cost 21 cents per minute.

For more on AT&T's new calling plan:
- read this release about calling Mexico

VZW subscribers can switch plans more easily

Tue, 02 Oct 2007 06:59:56 -0400

Verizon Wireless subscribers can now change their calling plans within the carrier without having to extend their contracts--all part of Verizon Wireless' "Worry Free Guarantee." Existing Verizon Wireless customers will have the option to change their voice and data calling plans starting October 7. The Worry Free Guarantee program also includes the carrier's 30-day trial period for new subscribers looking to "test drive" the carrier's network as well as a declining early termination fee as a contract runs out.

For more on Verizon's new policy:
- read this release

Judge: AT&T's wireless contract is "unconscionable"

Tue, 21 Aug 2007 06:59:58 -0400

A U.S. Court of Appeals for the Ninth District ruled that AT&T's arbitration clause, which claims any AT&T wireless subscriber cannot file class action suits against the company, is "unconscionable." Judge Stephen Reinhardt wrote: "We hold that the waiver is unconscionable, and, thus, unenforceable, and that the invalidation of the contract provision is not preempted by the Federal Arbitration Act." The ruling allows an AT&T customer, Kenneth Shroyer to bring a class-action suit against the carrier for alleged breach of contract and untrue advertising following AT&T's acquisition of Cingular Wireless, according to the suit.

These arbitration clauses are somewhat common and their legality has so far been decided on a state-by-state basis, but the Ninth Court's decision may lead to a Supreme Court case that could decide the matter nationwide. AT&T's clause forced the customer to waive his or her right to a trial by jury or have a judge hear the arguments. Instead, customers are instructed to settle the matter in a less costly arbitration process.

For more on the clause:
- read this article CNET