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July 23, 2015

 
In This Issue
How is T-Mobile Pulling off Canada-Mexico Roaming?
A "Summer Camp" Leter to Industry Players
Is the Telecom Industry Structure Upside Down?
Invitation to Wireless Innovation Council Meeting
Discount Tix for TC3 Event
Recent Columns
Dear Lens Subscribers,

Happy mid-summer. I have a jam-packed Lens for you this month:
  • Commentary: How is T-Mobile Pulling off CAN-MEX roaming?
  • A fun "summer camp" letter to some of the major industry players
  • A special invitation for 2-3 Lens subscribers to attend the Wireless Innovation Council event at Comcast's HQ in Philadelphia, Sept. 1-2
  • Link to my recent Fierce Wireless column: The Telecom Industry Structure is Upside Down
 


How is T-Mobile Pulling Off the Canada-Mexico Plan?
On July 9, T-Mobile announced that voice and data roaming in Canada and Mexico would be included in all Simple Choice plans. This is groundbreaking.
For the first time, there are no asterisks: no extra monthly charge for an 'international plan'; no charge for calling anyone in North America from anywhere in North America; no charges for texting; no surcharges for data roaming; and no throttling to pokey 2G or 3G service.

 

Those who have been reading my columns over the years know this has been a pet issue. International roaming remains the last bastion of 1970s era telecom. In 2015, there is no reason anyone should have to pay a significant premium to communicate just because they step over a border. If they are, than one of the following is true: their carrier is making usurious profits on these services; or some carriers are refusing to provide reasonable roaming rates to other carriers.

 

Certainly, anyone under the age of 40 has a hard time understanding why they can Skype or FaceTime with anyone in the world for almost free, or why calling to Canada/Mexico is free on most landline plans (i.e. Comcast), but $0.50 a minute on a cell phone. After all, what's a landline phone, anyway? And what's the 'circuit switched network', anyway?

 

I am a bit surprised this announcement has not received greater attention from the media and financial analysts. I believe this offering will attract more switchers than many think. And there will be two types of switchers: those who have been actively looking for a better North America option; and those who switch because here's a move by a carrier that's telling them there's no reason to be ripped off any longer.

 

My recent experience on a bike trip to Canada with a Verizon phone: I bought a $10 add-on plan that included 1,000 voice minutes and texting -- a reasonable price, but no good option for data. Voice coverage on the Canadian operators (mainly Telus) was surprisingly good, even in remote areas. Texting was inexplicably inconsistent. Data, at the $2.05 per MB option, was fuhgettaboutit. And by the way, now that I'm back, there is no way to cancel this plan online.

 

There is a larger question, however. How exactly is T-Mobile able to pull this off?   A familiar refrain from AT&T and Verizon on this issue over the years has been "we charge this much because that's what we have to pay the host carrier in Country XYZ". So, one of two things is going on here. Either T-Mobile was able to negotiate a significantly better deal with operators in Canada and Mexico that its competitors; or, this is a clever marketing move, where T-Mobile is taking a hit on international roaming in return for the broader benefit of gaining/retaining customers. I'm guessing that the answer is, "a bit of both".  T-Mobile successfully negotiated better terms with carriers in Canada and Mexico than it had. Operators in Canada have not yet launched anything reciprocal (Rogers has been offering a popular service called "Roam Like Home", which is similar to the TMO service except it costs $5/day and only includes the U.S.). America Movil just announced a similar offer to TMO's for its Mexico-based customers traveling to the U.S., and said it plans to do something similar for TracFone subs traveling to Mexico in the coming months. But it is also likely that T-Mobile will be eating some of the cost here, and clearly believes the bigger picture benefits outweigh the hit it might take from moderate to heavy users of, especially, the data option.

 

If this is a financial risk for TMO, it is a short- to medium- term one. We are on a path toward international roaming starting to become a thing of the past. AT&T has already hinted at something similar for Mexico (where it just acquired Iusacell). And in Europe, as part of the Single Market Initiative, there is a plan to phase out roaming across the Continent by 2017, with some quite strict caps on voice (5 cents a minute) and data (5 cents per MB) kicking in as soon as next year.

 

For the wireless historians among us, T-Mobile's move is akin to AT&T's Digital One Rate service, introduced in the late 1990s, as the first cellular service in the U.S. that included free LD and domestic roaming. Even though AT&T surely lost money on out of network calls (and remember, at that time AT&T's service area was far from national), this was a significant competitive differentiator at the time, led to meaningful gains in market share, and was the precursor for what became standard in the U.S. wireless industry within a few years.

 

T-Mobile's "Uncarrier" moves have focused on addressing customer pain points in telecom. Certainly, paying a buck a minute to call your cousin in Canada, or paying $2 per MB to check your email when traveling to Toronto are up there among our industry practices that upset customers. This will also be a boon to business customers whose employees travel to Canada and Mexico. The various shenanigans and perambulations that they have had to assemble to keep costs reasonable - buying local SIMs, prepaid phones, hunting around for Wi-Fi, and the like - will, at lead for North America, be a thing of the past.

 

So in the short term, TMO might be taking one for the team. But within a year, users should expect that all carriers will have improved Canada-Mexico offerings, and will be well on their way to something similar with important countries in Europe and Asia.

 

My 'Summer Camp' Letter to Industry Players
In celebration of mid-summer, here are some quick notes to a few of the industry's key players.

 

Dear Twitter: Why don't you have automatic link shortening built into your app?

 

Dear Verizon: why do you still charge $2 per MB or more for international data roaming?

 

Dear Facebook: Why is it so hard to navigate the settings for items such as notifications?

 

Dear Google: What business segments are you NOT planning to enter?

 

Dear Apple: As the world's most profitable company, here are three things you can do:

1)   Be more philanthropic

2)   Develop a program for lower income people in emerging markets to afford used iPhones

3)   Don't charge for phone-based customer care

 

Dear Blackberry: Can you please get yourself acquired by Microsoft, HP, or IBM. There's still an opportunity to offer an all-encompassing enterprise solution.  

 

Dear Uber: Are you using cookies and tracking to disproportionately require surge pricing from customers who have accepted it in the past?

 

Dear AirBnB: Have you trademarked the phrase "we're the AirBnB of..."

 

Dear Wall Street Journal: Have you read the, literally thousands of posts, complaining about how dysfunctional your mobile app is?

 

Dear Pixar: There's you, and there's everybody else (you get a mulligan on Cars 3 and Monsters University)

 

Dear Comcast: Why not sell a "premium streaming" experience, bundling a tweaked broadband service with a la carte versions of some of the more popular streaming services over your UI?

 

Dear T-Mobile: Please explain to the investor community how you are able to pull off that fantastic CAN-MEX roaming deal.

 

Dear AT&T and Verizon: What are ways you can increase your footprint in broadband?  

 

Dear Masayashi-Son: Please tell us whether you are still committed to Sprint, long-term, and be more specific about the network roadmap, especially 2.5G

 

Dear Dish: OK, you've done a great job proving that spectrum is like the real estate business. But it is time for you to put this spectrum to work in some shape or form.

 

Dear Wi-Fi First Proponents: Unsexy as it sounds, I think it's time to change the name to "Wi-Fi Preferred".

 

Dear App Community: It's amazing how the apps that most people download are still largely driven by word-of mouth.

 

Dear Tom Wheeler: You're doing a lot of things right. Next up: be more open to consolidation in cable/broadband in return for requiring the operators to open up their networks for resale. Also, I know you want four competitors in the wireless business, but unless things turn around dramatically, you're going to have to be more open to a transaction involving Sprint.

 

Dear Apple Music, Spotify, and Pandora: I'm still not completely sold on streaming being the defacto for music due to still unreliable (and expensive) cellular and Wi-Fi connectivity.  

 

Dear Wearables business: Let's talk about the next stage of true product differentiation for Fitbit and other activity trackers. Am a bit puzzled by the 125% increase in Fitbit's stock price since the IPO.  

 

Dear Friends, Family, and Colleagues: How many of you have bought or plan to buy the Apple Watch? Thought so.

 

Telecom Industry Structure is Upside Down
What's been interesting about the feverish M&A landscape of the past year is that as many big deals have been rejected or abandoned as have been completed. We see an on-fire European operator dipping its toes into the U.S. broadband market, modest consolidation in the cable industry, and our largest wireless operator making a bigger play in OTT content and video/ad serving platforms. As of mid-2015, in my view, we have an upside down industry structure. In wireless, there is almost excess competition, whereas in fixed broadband, there is lack of competition and choice.

So, what industry structure would make sense in our rapidly evolving content and connectivity universe? Here are some thoughts...
Invitation to Wireless Innovation Council (WIC) Meeting

As you might know I am co-chairing the Wireless Innovation Council (WIC) in partnership with Mobiquity. Our next meeting is Sept. 1-2, at Comcast's HQ in Philadelphia.

 

 

We have a great agenda, including:
  • Comcast's Sam Schwartz, who heads up all products and services and Sanjay Macwan, who runs the innovation lab at NBC Universal
  • An innovation workshop led by Roch Parayre, who is one of the foremost lecturers at Wharton and runs these sessions globally for major enterprises
  • Guest Innovator CEO presentations: Future of Work (Betterworks), Augmented Reality (Zappos, Marxent), and B2E (FreshDesk).
  • Plenty of opportunity for networking, interaction, and debate

I have 2-3 complimentary spots for qualified execs who might be potential future WIC members. Must be a senior level mobile/digital exec at a major enterprise/brand. Please contact me if interested or if you'd like more information.

 


Occasionally, Mobile Ecosystem partners with particular events which we believe to be of value to Lens subscribers. The TC3 Summit, September 30-October 1, in Mountain View, CA, is one such event.


The
TC3 Summit is the annual gathering of telecom innovation executives from operators, vendors, startups, and VCs who are creating the next generation products and services together. Over 50 telcos take the stage at TC3 to broadcast their annual "calls for innovation" to the vendor and startup communities making this Summit an important annual event for our ecosystem. (Plus, the Telecom Council of Silicon Valley does a great job making sure every attendee gets plenty of relevant, pre-arranged, 1-on-1 meetings).

We have arranged for a $300 discount for Lens subscribers. Click here to register and use the code LENS.   
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