Landlines

Metric: 3 in 10 households have cut the landline

Brian Dolan — Wed, 14 May 2008 11:42:46 -0400

According to the National Health Interview Survey, conducted by the U.S. Center for Disease Control, about three in 10 households either only use mobile phones or rarely take calls on their landlines. During the second half of last year, 16 percent of households only had mobiles, while 13 percent had mobiles and landlines but took nearly all calls on their mobiles. Wireless-only houses grew 2 percent between the first and second half of 2007. In early 2004, only 5 percent of households only had mobile phones. The survey also found that low-income people were more likely to not have landlines and those in mobile phone-only units tended to live with unrelated roommates in rented apartments. The survey involved 13,083 people who were interviewed between July and December last year.

For more on the report:
- read this article from the AP

On the Hot Seat with Bluepulse's Christopher Nguyen

Mike Dolan — Wed, 14 May 2008 10:49:29 -0400

It's not often that a senior executive at Google steps down from his post to head a new startup but that's exactly what Christopher Nguyen, former engineering director of Google, did when he joined social messaging firm Bluepulse as its CTO and vice president of engineering. FierceWireless editor-in-chief Sue Marek recently talked with Nguyen about this 2008 Fierce 15 award winning venture and why it's different from all the other mobile messaging companies.

FierceWireless: Why did you leave Google to join Bluepulse? What was the appeal?

Nguyen: From my personal perspective if you look at my profile, my background has been about building things. I started my career by building a university [Nguyen was a professor at Hong Kong University of Science & Technology] and I've built and sold three companies so far. That has a certain rush of adrenaline every time you do it and I look forward to doing it over and over again. The only thing I haven't done is build a company that is worth more than $1 billion from scratch. I see Bluepulse as having that potential.

If you look at the mobile industry and its convergence with the Web, I think the potential is enormous.

FierceWireless: What specifically about this company was so appealing?

Nguyen: Mobile as an industry is about to explode. There is a shift of users from the Web to the mobile device. Mobile is a logical place, the device is always with you. The only thing limiting you is the capabilities. I grew up in the Bay area but after I finished my Ph.D., I went to Asia and lived there for 10 years. The people there live and breathe mobile technology. It weaves into people's lives. For five years, we didn't have a landline phone. We always had mobiles. Everyone in the company communicated with each other using SMS. I think over the next six to 12 months it will take off. The only question is whether it will be Bluepulse or another player.

FierceWireless: What is the value proposition for Bluepulse? There are other similar companies, what makes Bluepulse special?

Nguyen: The passion of CEO Ben Keighran matches mine. When they were pursuing me for this job, I asked them what is your end-game? If you are planning to sell this company for $50 to $60 million, I'm not interested. If you want to build a global platform, something worth $1 billion, sign me up.

Also Bluepulse is very focused in one area. Mobile is a very loose way to group this. There are a lot of different players in mobile, especially in the transition from Web to mobile. But no one is focused on mobile messaging as a hill to be conquered. There are instant messaging technologies, voicemail technologies, SMS and VOIP calls. Each player has its own area it's trying to build out. We are the only ones that I see focused on mobile messaging as the killer app. If you ask 100 people what is one activity that you would want to do--if I gave you an application that would allow you to update your status and let friends know what you are doing, about 10 people may want to do that. But if you ask 100 people if they want to communicate and send messages to families and friends, I think the answer will be 98 saying yes. We are very focused on an unexciting but mass market vertical application with Bluepulse.

FierceWireless: So you are focusing on unified communications? Is that the right term for this?

Nguyen: I have a philosophy that when you change something, you only change one variable at a time. You don't force the user to change too many variables at one time. In the desktop platform, everybody emails. As you change the technology platform to mobile they will want to do some type of messaging. Bluepulse is focused on that. Other people are doing excellent things on the mobile platform that are different from what we are doing.

FierceWireless: You say you deliver more than 150 million messages per month to users in more than 190 countries around the globe. How did you get that reach so quickly?

Nguyen: Bluepulse started as a client application but the key differentiating factor was that it worked on all phones in the world. It delivered a lot of widgets, which could do anything from IM chat to horoscope. Ben [Keighran, CEO of Bluepulse] noticed that what attracted the traffic and what retained users was the communication application more than other applications. In June of last year, the team decided to focus on delivering that. They changed from a client-based application to a Web-based application so it is more accessible to people.

FierceWireless: How do you make money?

Nguyen: Today, we don't. We are strategically focused on getting reach. I have a lot of theories on building companies. You always have to make difficult choices about where to invest your limited resources. No matter how large you are, your resources are limited. Bluepulse is facing the decision today about whether you focus on growing the user base or do you try to monetize this? You have to choose one. The observation I have made is that if you grow the user base, it is much more defensible in a competitive position. If you launch a revenue model, within seven days everyone can copy it. So as long as we believe there are ways to make money with a mobile platform, the right thing to do at the moment is grow the user base.

This isn't a theory. I've done this before.

FierceWireless: Will there be a role for the wireless carrier in your business?

Nguyen: This sounds like a politically correct answer but I believe it. There is a huge value in terms of the data connectivity that carriers can provide. AT&T is realizing this with the iPhone. I think the carriers have a huge role to play in that. But as the industry matures, the platform becomes open and you have more innovation. It will draw more data usage for the infrastructure and infrastructure players should be very happy.

AT&T cutbacks lead to mobility gains

Mon, 21 Apr 2008 06:59:58 -0400

The layoffs that AT&T announced last week, which look to put 1.5 percent of its employees out of work, will be recouped over the course of the year by hiring employees for its mobility division, the carrier said. Most of the expected 4,600 cuts will come from the company's landline division. Since the cuts will mostly be from the management level and the new employees on the mobility side of things won't be from the management level, analysts expect cost savings from the layoffs to approach half a billion dollars.

AT&T also announced today that it had completed the acquisition of a regional wireless service provider Edge Wireless, which served subscribers in Oregon, northern California, Idaho and Wyoming. The FCC just announced its approval for the acquisition. The newly acquired Edge subscribers now have access to AT&T's full portfolio of services. Edge and AT&T have long had a roaming agreement.

For more on AT&T's recent news:
- read this AT&T cutbacks article from the WSJ (sub. req.)
- check out this AT&T completes Edge acquisition article

Skype expands unlimited calling plans

Mon, 21 Apr 2008 06:59:55 -0400

According to a report in the Wall Street Journal, Skype launched its first unlimited calling plans to phones overseas. For $9.95 a month, Skype users can now make unlimited calls to landline phones in 34 countries that include most of Europe, Canada, Australia, New Zealand, Chile, China, Singapore, Taiwan, Japan, Korea and more. The plan also includes domestic calls to both landlines and mobile phones. Users can call mobile phones in Canada, China, Hong Kong and Singapore, but not to mobiles in other countries.

For more:
- read this article on Skype's unlimited plans

AT&T to layoff 1.5 percent of employees

Fri, 18 Apr 2008 06:59:57 -0400

AT&T, feeling the pinch of a shrinking landlines business even as it suffers growing pains in its wireless and TV units, is laying off some 5,000 workers as it reconfigures its workforce. The 1.5 percent trimming will cost it $374 million in first quarter pretax charges.

The company said its overall numbers of employees won't actually change. "This is part of our ongoing evaluations to streamline the business," said spokesman Walt Sharp. "It's about having the right people in the right job."

- Click here to go to our dedicated AT&T page. More news and company profile. -

Most of the job cuts are at the managerial level. AT&T had a workforce of 309,000 at the end of last year. When it announced the acquisition of BellSouth in 2006, it projected 10,000 job cuts over the next three years. Instead, it's grown some 7,000 as its wireless and TV divisions expanded.

"We're always hiring for the growth areas," Sharp said, noting that the company was seeking talents in areas such as wireless and U-Verse, its Internet TV service. "We're shifting headcount to areas where the customers are."

For more:
- read the CNNMoney AT&T lays off 1.5 percent article

Related articles:
AT&T sees trouble refilling outsourced jobs AT&T jobs report
Is AT&T bitter about the C block AT&T auction report

Metric: 35% would buy mobile phones from telco

Fri, 11 Apr 2008 06:59:54 -0400

While talk of a killer "quadruple play" has persisted for a number of years now, a recent survey conducted by Compete suggests that consumers are willing to consider their landline phone provider as the provider of their mobile phone service, too. According to the survey: 35 percent of mobile users said they would be either likely or very likely to purchase a cell phone service from their telco provider. About 55 percent of respondents said a key factor in the decision would be the ability to have unlimited calls between their mobile phone and home phones. Here are the other key factors:

For more on the survey:
- read this Compete blog entry

SPOTLIGHT: Alltel's text-to-landline service launches

Wed, 09 Apr 2008 06:59:52 -0400

Messaging services provider Messaging International announced that its TeleMessage subsidiary inked a deal with Alltel Wireless to launch its Text-to-Landline application across the operator's network. Text-to-Landline enables Alltel subscribers to send text messages from their wireless handset to any landline phone--each SMS is converted to voice for landline recipients, and their voice response is converted back to text for wireless users. Article

Households spend more on mobile than landlines

Tue, 18 Dec 2007 06:59:55 -0500

While the dominance of residential landline telephony services has been on the decline for some time, U.S. households have never spent more on their mobile phone services than on landline ones until this year, according to industry and government officials. Back in 2001, U.S. households spent three times as much on landline phone services than they did on mobile phone services, but last year the popularity of mobile services bridged that gap significantly. Households spent $524 on mobile phone services in 2006, while they spent about $542 during the course of the year on landline phone services. While the metrics for 2007 have yet to be compiled, analysts and government officials are confident that spending on mobile services has outstripped spending on landline telephony this past year.

"Frankly, I'd be shocked if (households) don't spend more on cell phones at this point," said Andrew Arthur, vice president of market solutions at Mediamark Research & Intelligence.

For more on the trend:
- read this article from AP

AT&T settles Missouri suit over utility taxes

Tue, 11 Dec 2007 06:59:57 -0500

AT&T Mobility agreed to pay up to $76 million in back taxes and legal fees to put an end to a six-year-old cell phone tax lawsuit in Missouri. Verizon Wireless settled an identical suit against it in September, while Sprint has settled with some of the Missouri municipalities involved but is still in negotiations with others. The basis of the municipalities' lawsuit is whether they can levy a tax normally applied to utilities and landline phones to cell phone services, too. The suit originally sought $500 million in back taxes and fees, but the total looks like it will be far less. Verizon Wireless settled for $31.5 million.

ALSO: AT&T announced it will buy back about 7 percent of its stock--400 million shares--at a price of almost $15.2 billion (according to Monday's closing price of $37.90). The buy-back will be completed by the end of 2009. The company is also raising its dividend by about 12.7 percent, or 5 cents, to 40 cents per share. That dividend will be payable, and you've got until Jan. 10 to jump on the bandwagon if you want your piece. -Dan

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

Content to go

Wed, 03 Oct 2007 09:22:26 -0400

Telephone companies are becoming TV providers to maintain their businesses in the face of landline loss to cell phone use. But the migration never ends. Cell phone providers are intent on transmitting video to handheld devices, as evidenced by the number of mobile content sessions coming up at CTIA's Wireless I.T. & Entertainment Summit in San Francisco Oct 23-25.

The mobile content movement doesn't necessarily portend a massive audience shift to 2-inch screens, however. Most television executives consider it additive, but the jury is still out.

There's nothing particularly new about mobile video. MobiTV announced its initiative years ago. ESPN jumped into mobile content provision early on with mixed results, and came back for a second round. Verizon launched mobile video in the form of VCast Video over its regular data network, then as VCast TV over the much more efficient and effective network offered by Qualcomm's MediaFLO.

For content providers of all flavors--broadcast or cable networks, IP video purveyors, even syndicators--mobile devices represent merely another platform. So it is that broadcast networks, which still have the highest ratings and therefore the most to lose from platform migration, nonetheless have plunged head-long into mobile content deals. Some of the deals involve shows specifically produced for the small screen, while others offer repurposed regular telecasts. It should be noted, however, that only one repurposed telecast--"60 Minutes"--is among the 20 highest rated shows, a list populated mostly by dramas and NFL games.

The networks have their collective toes in the mobile content market because they see, like everyone else, the potential to either gain eyeballs or herd them somehow back to the TV set. What has yet to be demonstrated is the demand for mobile video content. VCast Video initially launched as a $10 add-on. People shrugged, or took it for a month or two, and then shrugged. MediaFLO-enabled VCast TV is $13 to $25 a month, and it's not the only game in town.

iPhone users have YouTube content, which may lend itself more favorably to a small screen if one is inclined to pony up $400 for a cell phone. If so, it would make just as much sense to get a WiFi-enabled handset and watch YouTube videos the wireless broadband way.

Then again, wireless broadband could have further implications for telcos just now launching IPTV offerings, but substantial erosion is unlikely. As nascent as the mobile TV market remains, one thing holds true--people like to watch TV on a TV set. Just as YouTube video is painful to watch on a 52-inch HD plasma, so too is minimally converted, high-motion landscape footage wastefully watched on a cell phone. Cell phone TV is unlikely to take a huge chunk out of the traditional TV business, but telcos just getting into the space might want to consider an MVNO, just to be on the safe side. --Deborah

P.S. FierceMarkets will bring you all the news and scoops from the CTIA I.T. Show. We are the official online show daily for CTIA. We will deliver all the news in our regular issue and at a custom micro-site entitled "CTIA Live!" Click here to check out the website.

AT&T's new international calling plan

Fri, 07 Sep 2007 06:59:56 -0400

AT&T has updated its Unity calling plans to include a new international calling plan. AT&T's Unity Worldwide Calling allows users with both wireline and wireless voice subscriptions to call more than 220 countries for an additional $4.99-a-month. This is not the first time AT&T updated its Unity calling plans, which launched earlier this year. Unity subscribers can make unlimited calls to any mobile or landline user within AT&T's network.

The most recent Unity update added Rollover minutes, a staple offering from the former Cingular Wireless, and dropped the requirement that Unity subscribers must have a long distance calling plan.

For more on the new international calling plan:
- read this press release

Missouri case may change cell phone taxes in U.S.

Wed, 22 Aug 2007 06:59:54 -0400

After six years, Missouri state court may finally decide whether municipal telephone license taxes, which apply to landline phone services, apply to mobile phone services, too. As subscribers move away from fixed-line services in favor of wireless, the courts are considering whether cell phones can be taxed the same as regular landline phones, which pay special utility taxes. Many states already charge sale and excise taxes for mobile services to guarantee universal coverage and e911, and carriers are unsurprisingly balking at the notion of more taxes for their subscribers. A Sprint spokesman, John Taylor estimated that 17 percent of the carrier's bills are made up of taxes. Depending on the state, however, taxes for a cell phone service range from 4.1 percent to 21.1 percent of the total bill.

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

T-Mobile may extend VoIP with Hotspot@Home

Mon, 13 Aug 2007 06:59:56 -0400

T-Mobile USA has submitted a wireless router for testing by the FCC, several reports indicate. The extrapolation is that T-Mobile intends to extend its wireless hub and HotSpot VoIP capabilities into a full-fledged VoIP landline service. The router appears to support two landline phones and two cellular phones per unit, according to reports.

Hotspot@Home, launched in June, allows T-Mobile customers to connect via the firm's cellular network and its 8,500 WiFi hotspot locations across the country. T-Mobile offers two HotSpot-compatible handsets--the Samsung t409 and the Nokia 6086. The handsets themselves sense whether or not WiFi is available.

For more:
- CNet provides and excellent overview of T-Mobile's build-up here
- TG Daily provides a perspective on T-Mobile's VoIP strategy here

Related Articles
T-Mobile CEO says wVoIP won't catch on Report

Verizon's ONE-BILL now available at VZW stores

Mon, 13 Aug 2007 06:59:54 -0400

Verizon is now allowing subscribers to sign up for its ONE-BILL bundled billing option for voice, broadband, wireless and video at Verizon Wireless stores. ONE-BILL subscribers can also pay their bills at payment kiosks in some of the 66 stores nationwide. The service combines the bills of these services into one monthly bill. Customers with landline voice and wireless service can save around $9.99 a month by combining their bills, according to the carrier's press release.

For more on the service:
- read this press release from Verizon

Sprint bails on SpectrumCo

Thu, 02 Aug 2007 06:59:58 -0400

Sprint has decided to withdraw from the SpectrumCo joint venture it formed with cable heavyweights Comcast, Cox, Time Warner and others. The JV purchased $2.37 billion worth of spectrum in the AWS spectrum auction last year, and Sprint contributed more than $100 million to the collective. While the official amount is undisclosed, Sprint has a 5 percent stake in the JV and its partners need to reimburse it for the holding.

Sprint spokeswoman Leigh Horner said the carrier has decided to focus on other strategic initiatives with the industry. "The action has been long-planned and does not reflect a change in strategy or focus for Sprint Nextel or its cable partners," Horner affirmed.

The carrier still has a joint venture with its cable partners: Pivot. The recently branded JV aims to equip customers with a quadruple play of television, landline, data and wireless service, while taking advantage of the interplay of the four services.

For more on Sprint's decision:
- read this article from The Kansas City Star

Alltel buyout on track; record-setting postpaid adds

Wed, 01 Aug 2007 06:59:56 -0400

In what will likely be the last earnings call for Alltel, company executives told analysts that the company's anticipated $24.7 billion sale to TPG Capital and GS Capital Partners, a subsidiary of Goldman Sachs, is making progress. Alltel shareholders are expected to approve the transaction at a shareholder meeting Aug. 29 and CEO Scott Ford says that he expects a favorable FCC vote on the deal to happen this year.

The wireless carrier did suffer a 54 percent decrease in second-quarter profits compared to the previous year. The drop was a result of the firm selling its landline phone business.

On the wireless front, however Alltel is prospering. The firm added 181,000 postpaid subscribers bringing its total customer base to more than 12.2 million.

Churn was 1.67 percent, down from 1.9 percent a year ago.Ã‚Â Average revenue per user was $54.10, an increase of 3 percent year over year. Data revenue was $5.63, an increase of 73 percent year over year. Data revenue now accounts for 12 percent of the firm's retail revenue. Ã‚Â

For more on Alltel's 2Q results:
- see this press release
- also read this WSJ article (sub. req.)Ã‚Â

Related articles:
Private equity firms snag Alltel for $27.5B
Record low churn for Alltel

Cable cooperative considering wireless

Tue, 31 Jul 2007 06:59:54 -0400

It sounds as if more cable companies may be contemplating a wireless offering from Sprint. The National Cable Television Cooperative said it held "exploratory discussions" with the Sprint Nextel and is trying to find a way to help small and midsized cable operators offer mobile-phone service to their customers.

According to Scott Abbott, executive vice president of the programming at NCTC, if a resale deal were to be reached with Sprint, the two sides would likely focus on markets where members had better footholds with households for their services than Sprint currently does. But Abbott cautioned that a deal "is not imminently forthcoming."

Sprint, of course, already has a relationship with four big cable providers. In 2005 Sprint partnered with Comcast, Time Warner, Cox and Advance/Newhouse to offer wireless services along with the cable firm's cable TV, high-speed data service and landline telephony services.

For more on the potential deal:
- see this BroadcastNewsRoom article

SPOTLIGHT: Embarq's Q1 strong because of wireless

Thu, 26 Apr 2007 20:01:32 -0400

The top story today shows that Alltel's profit is slipping after selling off its traditional landline business, but Sprint landline spinoff, Embarq, is posting strong results thanks to its MVNO agreement with Sprint. That's right, wireless is still keeping the quadruple play service providers afloat. Article

SPOTLIGHT: AT&T to offer cell phone + Internet bundle

Mon, 01 Jan 2007 19:01:32 -0500

AT&T, post-BellSouth, is planning to offer a cell phone service plus Internet service bundle--a new take on the landline plus Internet service package. The company is also trialling wVoIP handsets that run over WiFi in the home, as opposed to traditional landline service. CEO Ed Whitacre also stressed the importance of advertising for the company's bottomline, including mobile advertising through its AT&T Wireless and Cingular services. Article (WSJ sub. req.)

SPOTLIGHT: Mexico's mobile dialing headache

Mon, 16 Oct 2006 20:01:32 -0400

Just for fun, Mexico decided to create new rules that will make calling from a mobile phone in or to the country a nightmare: There will be at least 13 different dialing combinations depending on where you're calling from and what phone you use. Long distance from a mobile to a landline for instance has its own specific code, as does local-mobile-to-landline and so on. The rules go into effect November 4. The lucky few who don't have Telmex service, Mexico's near-monopolistic carrier, simply have to dial 01 before long distance calls. Article