In Defense of Sprint's $20 1 GB/Unlimited Entry Plan

There has been much negative reporting and commentary about Sprint's new rollout of the $20 starter 1 GB/Unlimited plan with 2G speeds after 1GB is used up.  Essentially, they're getting rid of an overage tax.  Rather than a negative take as reported by the Verge, BGR, Droid Life and Android Authority (all tech blogs) on the unattractiveness and that Sprint was "fooling" customers.  To be sure, FierceWireless also picked up on the negative groundswell in their piece.  When I tweeted about the negative plan, the Twittersphere also weighed in.

@billho888 @evankirstel Consumers hate fine print that's perceived as 'gotcha' or trickery.

— Brett Murphy (@PowerMan4Evr) October 30, 2015

@billho888 and why shouldnt they? it is a bit of a joke..

— MJB (@WigglesPalmer) October 30, 2015

@billho888 They should be. 2G is over 20 years old. Maybe they can match the plan to this phone https://t.co/iQXZgkQnyu

— Chris Dalton (@ChiDalton) October 30, 2015

I'm not pro-Sprint or anti-Sprint historically, I try to have an even balance and call it as I see it.  I see it differently and can understand what Sprint is trying to do. Let's look at the wireless landscape today. 100% wireless penetration has been reached. That is, theoretically those who want a wireless phone/device have already got them.

TARGET AUDIENCE

Of the big four carriers, Verizon and AT&T have the lion's share of the coveted 'prime' and high-value postpaid users. Both are protecting their bases as best as they can and invariably, some high-value subs and low value subs leave for competitors.   It's been well documented that Verizon and AT&T have said that they'll let some of their subscriber base go to protect profitability.  I interpret those as mainly (not totally) as price sensitive and lower ARPU/ARPA/ABPU customers. Add to that in most every carrier, there are the feature phone users.  Every carrier wants to migrate those feature phone users to smartphones because they know that when new data capabilities are used, more get consumed and eventually, the customer upgrades to higher data levels. Verizon and AT&T have been losing those feature phone and entry data customers for many quarters. So for Sprint, they see that as opportunity.

My point here is that the new entry plan is not targeted to existing users who have been data use veterans but for subscribers who have not really tasted data, don't have a smartphone yet, price-sensitive, all or a combination.  Note the Sprint price comparison is against competitors' entry plans.  This is where I think the tech bloggers are missing the point as they're techies and are all data vets.

2G?!

The other point of contention is that the vitriol concerning 2G. Yes, it is slow in today's LTE world. In today's environment, we even get upset when we're on 3G (EV-DO or HSPA). But the targeted sub may or may not care. MetroPCS before T-Mobile bought them out operated on LTE and a 1x fall back (MetroPCS never went to 3G) and yet they still promoted an 'unlimited' marketing message.  If subs did care, they'd jump to another competitive offering (likely in prepaid) or upgrade their data plan level (that's the point).

But why 2G and not 3G (EV-DO)?  My view on Sprint's thinking is that you don't want to have these entry/lower ARPU bearing customers contending for data on the 3G network that some of the higher ARPU bearing customers are using. That would be worse, alienating those customers and providing an overall bad user experience all around =-> churn.

Will it be successful? Ultimately, as a plan is designed, it comes down to sales and marketing execution in convincing the target segment that it's the best value/deal out there for what they're looking at.  Obviously, this plan is readied for the heavily promotion laden and competitive 4Q holiday season.  We'll see if competitors react.

Three Win-Win Wireless Network Features

Published at FierceWIreless

Ho's Perspective: 3 network win-win features Verizon, AT&T, T-Mobile and Sprint are using 

October 22, 2015 | By William Ho

The wireless network, as we bring it up in everyday conversation, is often about coverage and capacity. Much has been written about LTE networks becoming the revenue growth engine for the industry, the need to deploy complementary equipment such as Distributed Antenna Systems and small cells to meet data demand, and carriers' expanding geographic and population coverage.

Still, many companies are looking to move beyond the standard network buildouts. AT&T is moving aggressively as the industry pioneer toward Software Defined Networking and Network Functions Virtualization with benefits of scalability and flexibility both operationally and from the cost, product and service viewpoint. Verizon is also following suit and while Sprint and T-Mobile US have not formally committed themselves, it's a logical industry path. Beyond these macro network topics, there are network features that are synergistic for both provider and user.

Here are three network features that are in various states of deployment and development that I believe are ultimately win-wins for both mobile carriers and users:

1. Carrier Aggregation (CA) is an LTE Advanced feature that allows mobile carriers to meld disparate spectrum for wider channels, thereby supporting greater download speeds and network capacity. This network feature has been for the most part taken for granted as almost every carrier is "doing it." A check on the 3GPP specifications show a myriad of global carrier aggregation FDD, TDD, intra- and interband combinations. While some carriers can delay this feature by having wide contiguous spectrum (e.g., T-Mobile's 15-20 MHz band in some areas), other carriers are already implementing two times carrier aggregation (e.g., Sprint's two-carrier CA in the 2.5 GHz band, AT&T is doing 700+AWS, Verizon is doing 700+AWS). Yet in the near future, carriers will be embarking on three-carrier CA. Sprint and AT&T have both signaled that this is going to happen. Cynically, one can view it being ammunition for the speed arms race playing out in marketing messages and media coverage.

Beyond marketing, having faster download speeds addicts users so they invariably consume more data. Rarely do users complain that their mobile broadband experience is too fast. Quite the opposite, there is the sense of annoyance that network speeds aren't fast enough. Clearly, this plays in the hands of carriers offering greater data buckets and simplistically the overt path to drive service revenues. As download speeds increase beyond tens of Mbps to hundreds, carriers can potentially offer speed tier services based upon price point or brand. On the fixed wireline side, AT&T, Verizon, Comcast and others offer service based on speed tiers, so the concept is well understood by the marketplace. In the mobile space, a variety of factors prevent offering a minimum download guarantee but the industry can flip the concept in limiting a maximum speed. This is already happening in the prepaid space as AT&T's Cricket users are limited at 8 Mbps in a way to differentiate and protect the AT&T postpaid experience. Creating reliable download speed bands potentially allow for carrier plan varieties and ultimately user choice. That is, a subscriber who wants lesser speed can pay less. Moving the thinking into the wireless fixed access realm, the opportunity exists to mirror standard fixed wireline offerings. Ultimately, carrier aggregation can provide choice.    

2. "Twinning," for lack of an industry term, is the current ability to link multiple (compatible) devices to a primary mobile number. AT&T's Chris Penrose, senior vice president of Internet of Things (IoT), used the expression at several industry analyst events, including CES and the 2014 and 2015 AT&T Industry Analyst conferences. Sure enough, the formal service announcement became "NumberSync." Immediately many people pointed to Apple's Continuity feature for similarities, but while it is an Apple ecosystem benefit, NumberSync and the idea of twinning is platform agnostic as the network plays a major role. With AT&T's announcement, T-Mobile and Sprint also said they were working on something similar. Though Verizon is mum, it's likely that an offering will eventually come as it appears to be an industry no-brainer, especially when driving IoT adoption.

It makes sense that AT&T is first to pioneer the feature as its connected devices bet has spanned several years with many partners. The need to use Bluetooth or Wi-Fi to tether the device to a smartphone, especially in wearables (think watch/fitness band) has limited those devices' mass appeal as both need to be carried. Now, with the network aware that there are many connected devices to the same mobile number, this could help boost wearable interest and adoption. Though the low hanging fruit are wearables and tablet use cases, connected home and automobile are the next frontiers in the consumer space. Certainly the bill of materials in attaching a cellular modem package to a wearable may be a short-term challenge but as the industry scales, pricing invariably will drop.

From the subscriber view, it's adding a "line" or device on their data share plans without extra fee. From the carrier view, every IoT attachment increases service ARPU and customer stickiness, and loyalty increases, which positively impacts churn. Twinning is an exciting first step for more innovation in the connected device arena that will surely play out with numerous announcements at the 2016 Consumer Electronics Show.    

3. The idea of unlicensed LTE has been thrown around for several years, spearheaded by Qualcomm. Operating LTE in unlicensed spectrum (initially 5 GHz) appears to be a natural progression for the efficient mobile technology. At the heart of the matter is to increase the mobile user experience in terms of download speeds. In areas where mobile speeds may suffer (e.g, indoor malls), unlicensed band availability may help offer the user a consistent, similar, or faster mobile experience. Yet the topic is not without controversy and spawns confusion as there are several approaches in various stages of development and favored by different parties (LTE-U, LAA, LWA, MuLTEfire). On top of which, providers including cable companies with substantial Wi-Fi business model interests operating on the same unlicensed bands are wary of resource contention and ultimately being shut out. Though the controversy has played out in FCC filings and tech publications, all industry players would not want regulatory edicts, nor does the FCC want that either.

Verizon and T-Mobile have signaled their desire in seeing unlicensed LTE operation in 2016, albeit possibly with different approaches. Verizon as a founding member of the LTE-U Forum has strong interest in LTE-U whereas T-Mobile is looking at LAA. While collaboration is underway at the 3GPP and IEEE, future operations of LTE in unlicensed spectrum has united the wireless sector. EVOLVE, an industry consortium of small, larger carriers, interested manufacturers and their respective trade associations, is preparing for a lobbying and marketing push. At this stage LTE on unlicensed spectrum is fluid as all interested stakeholders attempt to influence the outcome. Though this is a global topic, the near-term battleground is in the U.S.

Despite the controversy, a solution will come about to the (expected seamless) benefit to the mobile user. Different carriers will bring different variants to market. From the carrier view, operations in unlicensed bands should be seamless and potentially obviate any negative views on coverage, speed and capacity. Moreover, data is partially offloaded from the LTE network. A seamless, fast, and consistent mobile experience is now expected by most users and will be a factor in churn.

These three network features will continue to be implemented and some will be seamless but regardless, we'll all need the latest and greatest hardware and software to enjoy these benefits. That's not so bad, right?

Verizon 3Q15 Results and Unlimited Data Trending

Dan Meyer and I talk about Verizon's 3Q15 highlights and takeaways. Also we talk about unlimited data moves from carriers.