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Lisa Hronek Posts Tagged ‘sprint’
T-Mobile Up For Grabs Again
AT&T recently announced that its attempt to acquire fourth-place U.S. carrier, T-Mobile, is officially dead. Besides being a big loss of potential future earnings for AT&T, it also means the loss of $4 billion, which AT&T now owes to T-Mobile’s parent company Deutsche Telekom in the form of money and spectrum access. So who’s next in line to fight for T-Mobile? It appears that Sprint may be back at it again. Sprint had previously negotiated with T-Mobile, prior to AT&T’s deal, and it might try again in an effort to increase its 17% market share, and stay afloat in a market that is overpowered by AT&T and Verizon. However, there are some obstacles Sprint would need to overcome for a merger to even be possible. One is the severe cash shortage they are experiencing as a result of their recent acquisition of the iPhone. Another is network compatibility issues. At this point this is all just speculation, as there are potentially many buyers chopping at the bit to get a piece of the lucrative wireless market. Until anything is decided for certain, we can definitely expect to see that super tall girl in the hot pink dress a little while longer.
iPhone Network Comparisons
The iPhone is now offered on three different carriers: AT&T, Verizon, and Sprint. If you’ve been watching television lately, you might have noticed that the competitive ads are beginning to heat up; each one focusing on that network’s supposed strength. A recent study performed by Metrico Wireless, a mobile device performance analytics company, reported that AT&T wins for fasted data speed (plus AT&T is the only carrier that lets you talk and surf at the same time), Verizon has the most reliable phone service, and Sprint is getting lots of attention because of its unlimited data plan. The study by Metrico Wireless included 6,000 voice calls, 8,000 data doanload/upload tests, and more than 21,000 web pages. Among the three carriers, Verizon dropped the fewest number of calls (2.1 percent of the time), Sprint had the highest call quality on outbound calls, and AT&T had the highest call quality on inbound calls. When it comes to download speeds, Metrico concluded that AT&T was the clear winner with a maximum download speed of 6,047Kbps (Kilobits per second) – impressive compared to Verizon, which came in at 2,371Kbps, and Sprint with only 1,767Kbps.
However, what any iPhone customer will tell you is that when it comes to call quality and data speed, it’s all about location, location, location. It is unclear exactly where Metrico conducted its bandwidth test, so these results should be taken with a grain of salt. I have learned from personal experience that AT&T’s service can differ drastically from one area of Chicago to another, so state to state is sure to vary as well. Another interesting conclusion from Metrico was that the most recently released iPhone 4S performed perfectly across all three networks, 100% of the time. What I think this means, is that even though you might get a different experience on each network, it appears as though technological advances may be leveling the playing field.
Putting the Full Court Press on the AT&T Merger
September has not been a good month for AT&T. First the Justice Department sued them to block their $39 billion takeover of T-Mobile, and then Sprint joins in and files an antitrust lawsuit against them. We’re not even half way through the month! What’s next? The bigger question is whether AT&T can find a way past the full court press or is this the beginning of the end for their chances at wireless domination?
Sprint’s lawsuit just adds fuel to the fire by showing how much the merger would affect them and other smaller carriers if AT&T and Verizon have exclusive control of networks and 80% of wireless customers. But the biggest problem will come down to the Justice Department’s lawsuit. AT&T will need to prove that not only will this merger be beneficial to customers through things like better service and coverage, but show that customers will still have several options to choose from when it comes to wireless carriers in their area. Concerns about loss of jobs will also need to be resolved. With the right amount of lobbying, any suit (even one this big) can be settled. One positive is that these lawsuits have come earlier rather than later. Given that AT&T has until next September 2012 to gain approval, it should be ample time to do what they need to do to state their case. If AT&T gets through these two opponents (Justice Department and Sprint), it still leaves them in the final matchup with the FCC, which they have to win to gain the final clearance. The pressure will continue to be intense; we’ll see if AT&T can break through and hold the wireless crown in the end.
An End to Unlimited Data Usage for Verizon
On July 7th, Verizon joined other major carriers who no longer offer unlimited data for one flat monthly fee and now will have a tiered data plan. Verizon followed AT&T, who did away with unlimited data plans last year. T-Mobile does offer unlimited service, but it slows down data transfers for heavy users, thus effectively capping their usage in a practice known as ‘throttling.’ Sprint has even recently promoted its benefit of not throttling, or slowing down, users’ data after a certain point.
So why is this change occurring and what effect might this have for competitors of Verizon, in particular Sprint? It now leaves Sprint as the only major competitor to offer plans with unlimited data usage.
With the continued growth and popularity of smartphones, such as Apple’s iPhone, cellphone carriers are trying to discourage heavy data usage due to limited network capacity to handle all of the wireless bandwidth. Nielsen reported in June 2011 that the average amount of smartphone data usage had increased over 89% from 230 MB in Q1 2010 to 435 MB in Q1 2011. (Maybe perhaps due to that Netflix app? But I digress…) However, Verizon spokesperson Melanie Ortel told Ideas@Innovations that 95% of Verizon customers use less than 2 gigabytes per month and Verizon will provide tools to monitor consumer’s data usage, including text alerts as they reach differing thresholds in their data usage.
All this made me ask: How much do I utilize in a month? I have absolutely no idea. So how am I supposed to choose a data plan that does not exceed my limit and therefore avoid costly overage fees? Many consumers, like me, likely grapple with this question when carriers force them to choose a data plan. It’s also interesting to note that Verizon’s new lowest pricing will be $30 a month for 2 GB of data, which was the same price it previously charged for unlimited data.
Shing Yin, an analyst with Citadel Securities, believes that unlimited data offering from Sprint will be attractive, at least to folks at Apple (who currently do not work with Sprint). He believes Sprint will want to offer its own version of the iPhone before Christmas and he “see(s) little reason for Apple to hold back.” Sprint, which bills itself as a low-cost provider, and its potential new iPhone “could offer an attractive proposition for more price-conscious users,” and “could be a relatively stronger seller than the Verizon iPhone,” writes Yin.
I don’t believe current customers will depart from Verizon, since their current customers are grandfathered in with their data rate plans. However, this may result in Sprint being the de facto haven for high data smartphone users. Likewise, isn’t it interesting that Verizon is moving to this new-tiered data plan after offering the iPhone? I think AT&T did the same thing of eliminating free data usage after offering its iPhone. Then again, I wonder if Sprint will change its tune of free data usage, if and when, it offers its own version of the iPhone. Time will tell…