Tier 1

RCA wants to stop exclusive handset deals

Sue Marek — Wed, 21 May 2008 10:49:03 -0400

The Rural Cellular Association is asking the FCC to investigate and adopt rules, if necessary, to stop operators from negotiating exclusive handset deals with manufacturers. The RCA says that this arrangement is unfair, decreases competition and violates the Communications Act. The association says that these types of deals make it impossible for many consumers, particularly those in rural areas, to get some of the best-selling handsets such as AT&T's iPhone and Verizon's LG Voyager.

Small, rural operators have long struggled to get state-of-the-art handset portfolios equal to their Tier 1 counterparts. But the number of exclusive handset deals appears to be growing. The RCA listed more than 50 handsets that are exclusive to the top 5 U.S. operators.

For more:
- see this press release.

Related stories:
AT&T customers will get BlackBerry Bold first. See this story on the BlackBerry Bold.
Small operator death knell. See this editor's note about carrier consolidation.

NextWave to sell spectrum holdings in the U.S.

Thu, 24 Apr 2008 06:59:58 -0400

NextWave has enlisted the help of Deutsche Bank and UBS to assist in the sale of its U.S. spectrum holdings, which include licenses and lease rights for a total of 4.7 billion MHz/pops of spectrum comprised of 154 AWS licenses in the 1.7/2.1 GHz band, 30 WCS licenses in the 2.3 GHz band, and 39 EBS and BRS licenses and spectrum leases in the 2.5 GHz band.

"Since the completion of the recent 700 MHz auction, we have received multiple offers for our U.S. spectrum assets," said Allen Salmasi, NextWave's president and CEO. So who will it be? Here are some contenders:

Leap Wireless. Leap already owns some AWS spectrum. Plus the company recently complained that only the large Tier 1 operators won spectrum in the 700 MHz auction.Ã‚Â Ã‚Â
T-Mobile USA. This operator owns AWS spectrum. The additional spectrum would help it increase its footprint and upgrade its network beyond UMTS.
Google. This company has deep pockets and failed to win any spectrum during the 700 MHz auction. Now it can buy some spectrum and push ahead with its open network agenda.
Comcast. This cable company has reportedly started a wireless division. Although it already owns some spectrum through its SpectrumCo joint venture, now is the time for it to really make its wireless play.
Verizon WirelessÃ‚Â or AT&T. Although both these Tier 1 operators won spectrum in the 700 MHz auction, they also realize the value of owning spectrum and may purchase more.Ã‚Â

So who's it going to be? Take your pick from our list or leave a write-in vote in the comments below the poll hosted here.

For more:
- read this press release

Related: Click here for all of our 700 MHz coverage.

Flat-rate Revolution

Fri, 22 Feb 2008 06:59:59 -0500

Flat-rate Revolution

When it comes to world of complicated wireless rate plans, simplicity is suddenly all the rage. On Monday three of the Tier 1 wireless operators (Verizon, T-Mobile USA and AT&T) debuted $100 per month unlimited voice rate plans. Overnight, it appears operators became willing to cannibalize their customers that are on higher-priced rate plans of $150 and $200 per month in order to offer the allure of unlimited calling for $100 per month.

The majority of consumers are on wireless rate plans in the $50-$70 per month range so it seems as if the $100 per month plans will likely be most appealing to business users who want predictable monthly cell phone bills. Alltel Chief Marketing Officer Frank O'Mara says that Alltel believes the "sweet spot" for wireless voice is around $50 per month. The company, which offers unlimited calling to certain phone numbers within a subscribers "circle" found that when it launched its MyCircle plan in 2006 offering unlimited calling to 10 numbers for $59, the plan attracted existing customers but not a lot of new customers. However, when the company offered a second MyCircle calling plan for $49 and unlimited calling to five numbers, it saw a lot more traction from new customers.

For now O'Mara says that Alltel is going to stick with its MyCircle rate plans and not jump on the $100 per month unlimited calling bandwagon.

However, the real loose cannon in this mix is Sprint Nextel. The rumor mill has been churning that Sprint may join the unlimited rate plan game but with a less-expensive offering at $60 per month. If that should happen, it will likely trigger a price war among the operators. In addition, I think it will have a huge impact on smaller operators such as MetroPCS and Leap Wireless, which have built their entire business propositions around unlimited calling plans in the $35-$60 per month range. Leap Wireless' spokesman Greg Lund says that unlimited calling plans are the right value proposition for its customer. So far the company isn't worried about competition from the Tier 1 operators with their $100 per month unlimited rate plans. "We haven't seen this as a particular threat because of the price differential," Lund says.

I certainly hope the Tier 1 operators remain cautious about dropping their prices on these unlimited rate plans. The flat-rate pricing game is a low-margin business that has to be carefully managed. Right now networks can probably handle any additional voice traffic that the flat-rate plans attract. However, if the price goes down, traffic will surely go up and quality of service will suffer. -Sue

Verizon goes flat-rate

Tue, 19 Feb 2008 06:59:58 -0500

Counting airtime minutes may soon be a thing of the past. In a potentially game-changing move, Verizon Wireless today announced a series of new nationwide unlimited anytime minute plans that give customers unlimited airtime minutes for a flat fee. The basic plan starts at $99.99 per month. A plan with unlimited messaging and airtime costs $119 per month. And unlimited airtime, unlimited messaging plus V CAST, VZ Navigator and mobile email costs $139.99 per month. Unlimited Family Share plans are also available starting at $199.98 for two lines.

The move by Verizon seems to imply that the operator realizes that voice traffic is quickly becoming a commodity and offering unlimited calling isn't going to be a big impact to the bottom line as long as the minimum price is $100 per month. Although Leap Wireless and MetroPCS also offer unlimited flat-rate packages ranging in price from $30 per month to $50 per month and up, these plans don't include unlimited roaming and these operators don't have the same nationwide coverage that a Tier 1 operator like Verizon Wireless has.

However, Verizon isn't offering unlimited access on the data side. Its new BroadbandAccess Plans, which are available starting March 2, are limiting customers to either 50 Mb for $39.99 per month or 5 GB of data for $59.99 per month. "They are concerned that when people start to use the EV-DO connection for unlimited data plans they have the potential of really putting a strain on the network," says John Byrne, analyst with Technology Business Research. "Quality of service is an issue."Ã‚Â

For additional details:Ã‚Â
- See this Verizon Wireless press release
- See this story from TheStreet.com
- See this chart of their new plans

Alltel's My Circle goes full circle

Fri, 18 Jan 2008 06:59:59 -0500

Ã‚Â

Alltel's My Circle goes full circleÃ‚Â

I applaud No. 5 operator Alltel for its recent expansion of its My Circle calling program. The operator, which launched the first My Circle calling plan nearly two years ago, earlier this week expanded that offering to give customers more choices. In an era when the big Tier 1 operators seem to drive all the rate plan innovations, Alltel is a refreshing change of pace. The operator knows its customer base and caters to them.

Alltel's My Circle plan allows subscribers on rate plans of $49.99 or higher to select a certain number of phone numbers (wireless or wireline and from any telecom provider) and call them as much as they want for free. Initially, Alltel limited My Circle to 10 numbers. However, earlier this week the operator expanded it to include different options such as My Circle 5, which lets customers select five numbers, My Circle 10, which lets them select 10 numbers or My Circle 20, which provides unlimited calling to 20 numbers.

In a research note, analyst firm Current Analysis praises Alltel's decision to expand its My Circle calling plan saying that these plans are particularly compelling to small business owners, which have typically been ignored by large operators. "SMBs are an increasingly important customer segment for all carriers and favorable voice plans may be a compelling reason for them to choose Alltel over large carriers."

Of course, Alltel isn't the only operator to offer a calling circle. The most visible competitive offering is T-Mobile, which provides MyFaves. MyFaves allows customers to have unlimited calling to five numbers. Alltel's My Circle is more flexible because it lets customers change their My Circle numbers at any time from the Alltel website. T-Mobile only allows members to change each of their MyFaves once per month but lets customers make that change by using the user interface on the handset, which is a nice option.

With U.S. wireless penetration rates nearing 100 percent, operators need to come up with creative ways to keep customers from churning to other operators. My Circle is a good example of the type of innovation that works. -SueÃ‚Â

P.S.Ã‚Â In honor of Martin Luther King Day, FierceWireless will take a publishing holiday on Monday, Jan. 21.Ã‚Â Ã‚Â

Small operator extinction

Fri, 21 Dec 2007 06:59:54 -0500

Over the past year we saw many operators snatch up smaller players in an effort to increase their footprint and continue their strong subscriber growth. It's clearly more economical for large operators to deploy new technologies in rural markets than for small operators with tiny footprints and less buying power.

Some purchases were quite small such as Leap buying Hargray Wireless for $30 million, Verizon Wireless snapping up Ramcell for an undisclosed amount and AT&T purchasing its remaining stake in Edge Wireless, a long-time affiliate in the Pacific Northwest. Others were more substantial such as AT&T acquiring Dobson Communications for $2.8 billion, Verizon buying Rural Cellular Corp. for $2.67 billion and T-Mobile USA snapping up SunCom Wireless for $2.4 billion.

For vendors the shrinking base of Tier 2 and Tier 3 carriers means fewer customers to buy their equipment. Obviously if you're a vendor with a Tier 1 customer base, this isn't a problem. But for smaller vendors, the Tier 3 carriers often offered them a chance to get a foothold in the market. -Sue

Small operator death knell

Fri, 14 Dec 2007 06:59:59 -0500

Ã‚Â

Small operator death knellÃ‚Â
Over the past few months we've seen a flurry of operator acquisitions. Some were quite small such as Leap buying Hargray Wireless for $30 million and Verizon Wireless snapping up Ramcell for an undisclosed amount. Others were more substantial such as AT&T acquiring Dobson Communications for $2.8 billion, Verizon buying Rural Cellular Corp. for $2.67 billion and T-Mobile USA snapping up SunCom Wireless for $2.4 billion.Ã‚Â

Just last week AT&T purchased the remaining stake in Edge Wireless, a long-time AT&T affiliate with about 172,000 subscribers in several markets in the Pacific Northwest. The amount of the acquisition wasn't disclosed yet. The deal is expected to close in 2008.

It's clear that building a bigger footprint is the basis for this buying spree among the large operators. As penetration rates climb, operators have to expand their footprint into rural and suburban markets to maintain their growth.

These acquisitions also eliminate roaming fees and reduce operating costs. It's more economical for a large operator to deploy new technologies in rural markets than for small operators with tiny footprints and less buying power. It's also tough for small operators to get the latest handsets from the manufacturers. Small operators don't have the buying power or the volume to cut exclusive deals with handset makers so they are often left with last-year's handset models.

Nevertheless I'm saddened by this trend. Many small operators are more entrepreneurial and innovative than their larger counterparts. For example, Kentucky-based Bluegrass Cellular offered push-to-talk and multimedia messaging before many of its larger counterparts. Midwest Wireless (before it was acquired by Alltel) experimented with a fixed wireless offering that competed with DSL and cable-modem service providers. Others, such as Cellular South differentiate themselves from their Tier 1 competitors by offering stellar customer service and strong ties to the community.

For vendors this trend means fewer customers to buy their equipment. Obviously if you're a vendor with a Tier 1 customer base, this isn't a problem. But for smaller vendors the Tier 3 carriers offer them a chance to get a foothold in the market.

I hope some small operators are able to survive this acquisition trend. Without them, I think this market is much less dynamic. -Sue

Is IMS Dead?

Fri, 21 Sep 2007 06:59:59 -0400

Ã‚Â

Is IMS Dead?Ã‚Â

IP multimedia subsystem, or IMS, the technology that every vendor was touting two years ago, has fallen off the industry priority list. At this week's FierceMarkets IMS Executive Summit in Washington, D.C., all the Tier 1 wireline and wireless operators present (Verizon, Sprint, AT&T and US Cellular) talked about how important IMS was to their network but they also pinpointed several serious gaps in the technology that must be resolved before they can move forward.

While the technology is certainly not dead, you could say it is in critical condition. During a roundtable discussion with industry analysts yesterday at the IMS Summit, Akshay Sharma, research director, carrier network infrastructure, converged infrastructure at Gartner Dataquest summed up his view of IMS by saying that the technology is currently in the "trough of dissolution."Ã‚Â He said that operators and vendors have realized that it's much more difficult to deploy IMS than originally anticipated and many are getting frustrated with its slow pace. However, he added that he expects the technology will soon move to the "plateau of productivity" where applications will start being commercially deployed and operators will make slow and steady progress toward having a simpler backend network architecture based on routers and IP soft switches

One big issue is in the billing systems and OSS. Most IMS applications that are being tested or launched by operators remain in separate silos and haven't developed to be the fully converged solutions that most envisioned when IMS was first conceptualized. The OSS and billing system integration is necessary to make this happen but many operators have multiple billing systems making this a complex and costly proposition.

Another common complaint is about IMS standards, or lack of them. I heard this week repeatedly that some standards exist while others are still in development and without a resolution most operators are hesitant to move forward. This issue is particularly a problem for smaller Tier 2 operators that can't afford to deploy proprietary IMS elements in their network.

When asked where they thought the industry would stand with regard to IMS at this time next year, all analysts agreed that progress would be minimal and most believed that we would be having many of the same discussions that we are having today. In the fast-moving world of technology, this is a bleak prognosis for a technology that was supposed to revolutionize the telecom network and reduce telco infrastructure costs. -Sue

FEATURE: IMS: The Slow Road to Reality

Thu, 20 Sep 2007 06:59:53 -0400

IMS: The Slow Road to Reality
by Sue Marek

At the FierceMarkets IMS Executive Summit yesterday in Washington, D.C., Verizon Vice President, Network Architecture Stuart Elby, assured the audience that tier 1 operators such as Verizon are committed to IMS, but that it's taking longer to deploy than anticipated.

During his keynote address, Elby pinpointed problems with IMS standards and noted that by having no specifications or framework for the different elements of IMS, carriers have been left with lots of flexibility. However, he warned that they are at the risk of developing a platform that isn't interoperable. "The relationship between IMS and the service delivery platforms must tie to the core. But that has been left to the user to figure out," Elby said.

Inter-carrier peering is still a challenge, according to Elby, as is the lack of OSS support for IMS. "We are working it out but we need the tools to tie it to our legacy network," Elby noted.

He also said that before an operator can deploy IMS it has to resolve certain business issues... Continued

Five Questions for Narothum Saxena, Senior Director of Advanced Technology and Systems Planning, US Cellular

Thu, 13 Sep 2007 12:23:41 -0400

For most Tier 1 operators, deploying IMS is not a question of if, but when. Operators understand that the IMS framework is a necessity for next-generation networks. But for smaller operators, IMS is not a sure thing. Tier 2 operators have to carefully evaluate whether IMS is going to provide the return on investment necessary to justify the deployment costs. FierceWireless editor-in-chief Sue Marek talked with U.S. Cellular's Narothum Saxena earlier this week. Saxena will be a keynote speaker at FierceMarkets' IMS 2007 conference in Washington, DC Sept. 19-20 (click here to register). He will be discussing the IMS framework and what it means for converged applications.

FierceWireless: What does IMS mean to the Tier 2 operator?

Saxena: IMS is only important to us if it allows us to provide services that appeal to our customers. IMS has to provide them with a better customer experience. And finally, the customer has to be willing to pay for it.

FierceWireless: Are there services that will benefit customers that IMS will enable?

Saxena: We are looking at that right now. We are looking at the applications that make sense for Tier 2 operators. What is the demand? What are the needs of our customers? The most talked about applications are the converged applications such as integrating messaging with voice, location and presence and push-to-x.

FierceWireless: A few years ago we thought all these next-generation apps would require IMS. But now IÃ¢â‚¬â„¢m hearing that there are lots of ways to deploy converged apps and not all necessarily require the IMS framework. Is that correct?

Saxena: Most apps that Tier 2 operators and Tier 1 operators have launched today are without IMS. Can we launch applications today without IMS? Absolutely. But IMS does give us the benefit of additional management of network resources and for converged apps thatÃ¢â‚¬â„¢s important. However, for Tier 2 carriers, I believe, the business justification for IMS is a tough one. It is very important to Tier 2 operators to adopt a more standards-based approach to get the economies of scale rather than a pre-IMS or proprietary approach.

FierceWireless: Is there progress being made in the standards bodies?
Saxena: I also feel that the standards bodies are working on some of the pieces of the puzzle for IMS. Policy management is up for standardization. SMS or IMS is to be standardized. There is a lot of activity in the standards bodies. But I would say that IMS is a good two or three years away from today for Tier 2 operators.

FierceWireless: Have you made a decision yet about IMS?

Saxena: We are investigating IMS but we havenÃ¢â‚¬â„¢t made a decision yet. ItÃ¢â‚¬â„¢s important for Tier 2 operators to keep in mind that there is a lot of promise in IMS. We hope it comes true. But right now itÃ¢â‚¬â„¢s only pre-IMS solutions that are available and they donÃ¢â‚¬â„¢t serve the entire value chain.

FEATURE: Five Questions for Narothum Saxena of US Cellular

Thu, 13 Sep 2007 06:59:53 -0400

FierceWireless: What does IMS mean to the Tier 2 operator?

Saxena: IMS is only important to us if it allows us to provide services that appeal to our customers. IMS has to provide them with a better customer experience. And finally, the customer has to be willing to pay for it. Continued...