Mardini, a 22-year-old entrepreneur and New York University student, is reselling devices and services from Sprint. In fact, Sprint is handling most facets of the business, aside from sales and marketing.

That’s a good thing, since Voyager Mobile consists of about seven employees, mostly family and friends. But though Mardini is only 22, this is his third start-up, having already built up businesses in music equipment and IT services.

Mardini says the goal with Voyager is to offer customers low monthly prices. Voyager is pitching $19 (plus taxes) a month for unlimited talking and texting, and $39 (plus taxes) for talking, texting and Web use.

“I pay so much for my cellphone,” Mardini said in an interview last week. “I was thinking there has to be a better way to make it cheaper for everyone.”

The company was all set to start taking orders on Tuesday, but the Web-site issues forced a few days’ delay.

Things are up and running now, with Voyager offering a range of prepaid devices, including a pair of Android phones at $219 and Samsung’s Galaxy S II Epic 4G Touch for $549.

iStockphoto | italianestro

Typically, the major carriers, including AT&T, Verizon, Sprint and T-Mobile, see some shift in their share but manage to post a cumulative gain in so-called postpaid customers.

This quarter, though, gains at Verizon and AT&T weren’t enough to offset the steep losses at T-Mobile, Sprint and other carriers. T-Mobile alone lost half a million contract customers in the January-to-March quarter, while Sprint lost 192,000 contract customers.

The Associated Press did the math and calculated a drop in the industry of 52,000 contract subscribers at the top seven carriers. That contrasts with the prepaid industry (both from the Big Four carriers and smaller players such as MetroPCS, Cricket and TracFone), which saw gains of two million customers in the quarter.

As brokerage Jefferies & Company noted ahead of the earnings report season, the cellphone industry tends to face a tough few months after the initial bump that follows the introduction of a new iPhone.

(Image courtesy of iStockphoto | italianestro)

“I think it is much to-do about nothing,” Sprint VP Fared Adib told AllThingsD in an interview on Tuesday. Customers sign up for two-year contracts, Adib said, and it makes sense for customers who want to have the latest technology get a device that will meet their needs throughout that time. People should be more concerned if Sprint weren’t doing that, he said.

“We’ve done this before,” he said. “So has every other carrier.”

Adib noted that Sprint’s LTE deployment, which will start with a few cities around midyear, will be faster than the rollout of prior technologies, including its 2G, 3G and WiMax networks.

Speaking of WiMax, Sprint may not be introducing new phones for its flagship brand, but it is now extending that technology to its Boost Mobile and Virgin Mobile prepaid services. Virgin and Boost both announced plans to start selling a WiMax device from HTC. (Virgin has a variant of the Evo 3D, while Boost will sell a phone similar to the traditional Evo 4G.)

The company has said it plans to continue offering WiMax service through at least 2015.

Also on Tuesday, Sprint announced a new bundle of family safety and security applications under the Sprint Guardian banner. The effort consists of a $10 per month service from Location Labs’ Safely unit and a $5 per month security service from Lookout.

Both services cover up to five devices, which could be a savings for families that have a bunch of Sprint phones.

Adding such services can help increase loyalty to Sprint among families with multiple devices — already a traditionally loyal group and a key source of revenue for all the major carriers.

“You might change phones and plans but you don’t change carriers,” Adib said of those customers.

One area where Sprint hasn’t been all that aggressive is in introducing devices running Microsoft’s Windows Phone operating system. Adib said that Sprint certainly took note of the slow initial sales globally for the first crop of Windows Phones.

Still, Adib said that the company is a longtime partner of Microsoft’s and expects to offer future Windows Phones, likely after the debut of Windows Phone 8.

“I don’t want to give you any specific dates,” he said.

But he said he is “very bullish” on Windows Phone overall and said the company has rapidly closed some of the gaps it had in terms of performance and capabilities. Adib said he has also been pleased to see the work Nokia has done in reintroducing itself in the U.S. with its first Lumia devices.

“I think we are going to continue to see that,” he said.

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The company said it lost $84.4 million, or $1.10 per share, on revenue of $767 million. That compares to a $249.4 million loss, or $3.28 per share, on revenue of $708 million, in the fourth quarter of 2010.

Leap said it added 179,000 net new customers in the quarter compared to 107,000 net customer additions in the year-ago quarter. It also said 60 percent of new handset sales in the most recent quarter were either smartphones or devices that connect to the company’s Muve Music unlimited music service.

That’s helping the company drive up its average monthly revenue per customer, which reached $42.09 in the fourth quarter, up 10 percent from a year ago and 2 percent sequentially.

“We had solid performance in the fourth quarter and are pleased with the operational progress the business has made,” CEO Doug Hutcheson said in a statement. “Churn performance was solid, despite some billing system disruptions that affected both new sales and existing customers in the quarter.”

The company has also announced plans for its first LTE market — Tucson, Ariz. — and said it plans for the high-speed network to reach 25 million potential customers by the end of the year. Leap, once a regional player, is also taking the Cricket brand nationwide.

With AT&T having failed in its bid to acquire T-Mobile USA, some have seen Leap as a potential acquisition target for Ma Bell.

The company, which sells prepaid phones and service under the Cricket brand, said on Wednesday night that it will soon start selling a variety of phones across the country via Best Buy and other retailers. Among the products it will sell are phones with the company’s unique Muve Music service.

Enabling the expansion is a deal that Leap has with Sprint, allowing it to sell Cricket even in cities where it doesn’t have its own services available.

“This is a significant milestone in the plans we announced last year to create a new, hybrid wholesale and facilities-based model that is unique in the wireless industry,” Leap CEO Doug Hutcheson said in a statement. “We are excited to bring Cricket’s innovative wireless products to a large group of consumers who until now have not been able to take advantage of the tremendous value these products provide.”

Best Buy will start selling devices beginning Sept. 25, with other retailers following over the next two months including select Wal-mart stores, Dollar General stores as well as HSN.

In conjunction with the expansion, Cricket is adding some new phones to its lineup, including the Score, an Android phone from China’s ZTE and, later this year, a Muve-compatible feature phone called the Chorus.

Seattle-based Bobber Interactive believes it has come up with a solution: A Facebook application that allows prepaid users to track their spending, make savings goals and ultimately earn cash rewards.

While a number of Facebook applications exist to collect debts from friends, pool money for shared bills or track household expenses, this may be the first application that allows people to actually manage real money, like a bank.

The application, called Goal Card, is being unveiled this week at the Finovate event in New York, where the company is providing a demonstration and announcing that it has raised $1.4 million in a round of capital.

As you might expect, the Goal Card application is nothing like your mother’s bank. Instead of black-and-white spreadsheets, the GoalCard apps uses animated pictures, videogames to increase loyalty, and even viral mechanisms, like posting to a friend’s Facebook page.

The concept for the company, led by CEO Eric Eastman and COO Scott Dodson, started to gel last year, and won the “Best in Show” award at the Finovate event in the spring.

Today, the five-person team works out of luxurious headquarters in downtown Seattle. The space is hundreds of thousands of square feet too big, but it’s a bargain, and there’s always parking available in the garage. It’s also appropriate because it’s on Wall Street. Eastman jokes that while a lot of people have lost their trust for financial institutions on Wall Street, “hopefully they’ll trust this one.”

The company’s investors include Peak6 Investments and Dove Capital.

The application allows prepaid cardholders to do a number of regular banking activities such as check balances and track recent purchases. But it also allows users to set goals, like saving up for a new mountain bike or designer purse. Every day, users will see a progress bar detailing how close they are to making that purchase.

Users will also be able to play games, like a version of Bejeweled in which users line up credits and debits or answer questions such as “Who would you rather loan $50 to?” using their Facebook friends.

The games encourage engagement and enable users to earn cash rewards, Dodson explains. Users will also be able to receive up to five percent cash back once they meet their goal and purchase the item they’ve been saving up for.

Bobber makes money by sending referrals to e-commerce sites, which can pay up to 15 percent, depending on the item. But the majority of its revenues are expected to be made from interchange rates, which merchants pay the card’s processors each time a purchase is made. Those rates have remained high for prepaid cards — around 1.25 percent — despite recent legislation that lowered rates for other transactions.

So far, Bobber has only integrated with Amazon, but it expects to add more retailers soon.

Additionally, it expects to lower the cost of acquiring customers compared to other banks and card issuers, which spend big dollars on circulars and flashy ads. Instead, it believes current customers will spread the word about the site through Facebook’s viral channels.

Verizon Wireless will begin offering the plan — which includes unlimited talk, text and Web use for $50 a month — on Thursday, said spokeswoman Brenda Raney. In addition to Verizon stores, it will be sold at Best Buy Co., Wal-Mart Stores Inc. and Target Corp. locations.

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The company said it lost $847 million, or 28 cents per share, on revenue of $8.3 billion for the three months ended June 30. That compared to a net loss of $760 million, or 25 cents per share, on revenue of $8 billion in the year-ago quarter.

Shares of Sprint were trading lower in premarket trading, changing hands recently at $4.53, down 63 cents or more than 12 percent.

On the customer side, much of Sprint’s gains were via wholesale and prepaid customers, with the company reporting a loss of about 101,000 net postpaid subscribers during the quarter. Though still losing postpaid customers, Sprint cut the rate by more than half from what it was posted in the second quarter of 2010. The company said its postpaid churn rate for the quarter was a best-ever 1.75 percent, smaller than the 1.85 percent from a year ago, and 1.81 percent in the first quarter of this year. The lower churn came as nine percent of Sprint’s core postpaid customers upgraded their phones during the quarter.

The company reaffirmed its full-year forecast issued in April, saying it expects to add postpaid subscribers for the full year and to add more wireless customers overall this year than it added last year. Capital expenses excluding interest should be about $3 billion, and the company said it expects positive cash flow for the second through fourth quarters and for 2011 as a whole.

As for the LightSquared deal, it’s a 15-year agreement that has each making a number of commitments and giving Sprint additional options when it comes to offering high-speed wireless services to customers. LightSquared will pay Sprint about $9 billion in cash for providing 3G roaming, spectrum hosting and network services, and will give Sprint $4.5 billion in credit for use on LightSquared’s forthcoming satellite and LTE networks.

Sprint has the option of using up to 50 percent of LightSquared’s expected 4G capacity in the so-called “L band.”

With the agreement, LightSquared said it expects to have its first 4G LTE services available in the second half of 2012. Sprint said it will talk more about its 4G plans at an Oct. 7 investor day event.

Dan Hays, a partner at management consulting firm PRTM, said the deal should benefit both companies, as LightSquared can host its 4G network within Sprint’s next-generation cell sites.

“For Sprint, this will defray a significant portion of its planned capital investment and deliver increased cash flow while providing an opportunity to tap into LightSquared’s competitive 4G technology,” Hays said in a statement. “For LightSquared, this deal will dramatically reduce the cost and time required to deploy its nationwide, mobile broadband network to hundreds of millions of Americans.”

Hays also said the 3G roaming piece of the deal should help LightSquared, as it allows the company to offer partners nationwide service from the outset.

LightSquared still faces significant financial and regulatory challenges in building its network, including concerns that it poses interference with GPS systems. LightSquared has said it has a plan that should significantly reduce such interference.

The move is interesting in that it cuts a long-standing tie here in the U.S. of subsidizing phones in exchange for long-term commitments. T-Mobile is far from the first to do this, of course. Metro PCS and Leap Wireless handle things similarly as do many of the prepaid arms of the major carriers.

Those who don’t want to pay the entire cost of their phone upfront can still sign up for the new value plans and pay for their phones in installments, with a certain amount upfront and then $5 to $15 per month based on the cost of the device.

The plans range from $39 a month for 500 minutes and unlimited texting to $75 a month for unlimited talk, text and Web (with up to 5GB of that data being of the high-speed variety; T-Mobile doesn’t charge overages, but throttles the speed way down once customers hit their allotted limit.) A series of family value plans are also available starting at $49.99 per line — an option that T-Mobile says can save customers hundreds of dollars, even after tacking on the cost of buying the smartphones at full price.

The new plans could particularly pay off for someone who plans to keep a phone longer than the length of a typical two-year contract. It also has some appeal to bargain hunters who get their phone off Craigslist or to families who have a phone to pass down from one user to another.

Of course, the other question is just how many people want to sign up for a unique T-Mobile plan at all considering the company is working hard to get itself swallowed by AT&T.

For its part, T-Mobile is pitching itself as a way to lock in good rates whether the deal goes through or not.

“We do get that question,” says T-Mobile Senior Vice President of Marketing John Clelland. But, he insists, “there’s never been a better time to be a T-Mobile customer.”

T-Mobile will continue to offer more traditional rate plans with subsidized devices under the “classic” moniker, selling the new options as “value plans.”

AT&T became the latest to join the fray on Tuesday, introducing a new $50-per-month plan that covers unlimited talk, text and Web for prepaid phones using its GoPhone service. There is a catch, however. Unlimited Web is only available on feature phones, not on the kinds of smartphones that can really start sucking down data.

The move is designed to help AT&T better compete in the prepaid market, which features low-cost plans from Sprint’s Boost Mobile and Virgin Mobile brands, as well as from smaller players such as Leap’s Cricket and Metro PCS.

With prepaid plans, phone buyers pay full price for their device, but with that they get the luxury of not having to sign a contract. And while prepaid plans once cost far more than traditional ones, such services are now often the cheapest game in town.

Boost Mobile, for example, offers plans that start at $50 a month ($60 for BlackBerry devices), with the additional perk of a $5 drop in price for every six months that a user pays on time — up to a maximum savings of $15 a month.

Metro PCS, meanwhile, offers a $60-a-month unlimited plan that is available in conjunction with an Android smartphone, the Samsung Galaxy Indulge.

Huawei Technologies Co. and ZTE Corp. already sell mobile devices in the U.S., but many of them are basic flip phones and mobile modems or are only for smaller prepaid-phone companies. The companies want that to change.

ZTE says it will quadruple the number of smartphones it ships globally to 12 million this year, including its first model for a top-tier wireless provider in the U.S. Huawei, which already provides a smartphone to the smaller prepaid providers, said it is in talks with the four national carriers.

Huawei’s and ZTE’s push into the U.S. comes at fortuitous time for the companies. Both are known for their ability to supply low-cost products, which have become more crucial as carriers seek to get smartphones in as many hands as possible. As a result, both companies are expecting an expanded presence in the U.S.

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One indicator is the sales of prepaid gaming cards that are purchased at Walmart, Target, 7-11 and many other retailers.

While the game cards are typically purchased in person, they can be used for a range of things, from buying virtual goods within FarmVille  to buying a game that’s digitally delivered over the internet via Xbox Live.

Today, NPD released industry sales figures for February today, reporting that prepaid game cards now account for 22 percent of all accessories sold and that sales have increased 52 percent compared to a year-ago.

Meanwhile, in the same time period console software sales only increased by 2 percent.

NPD’s Analyst Anita Frazier said the jump in game card sales points to the increased importance of digitally distributed content sales within the games industry, and that last month marked the best February on record for accessory sales.

The top-selling item was the Xbox 360 1,600 points card.

Overall, NPD reported that physical retail channel in the U.S. generated video game hardware sales in February of $467 million, increasing 10 percent. Video game software, including console and portable totaled $601.4 million, dropping 5 percent, and video game accessories totaled $257 million, increasing 22 percent.

EMoney was given the task of moderating a panel called “Leveraging New Markets” in front of a packed room with two other competing panels.

The participants were Ted Sorom, the CEO of Rixty, Bruce Bower, the CEO of Plastic Jungle and Jeff Thomas, SVP of SecondMarket.

There’s no video, so you’ll have to endure a written recap from my perspective as chief interrogator.

First, if you aren’t familiar with these companies, the four of us can attest there’s only one thread in common: Liquidity, and creating marketplaces to make assets more fluid.

The discussion is well-timed as we push beyond e-commerce and Web 2.0 to a new reality, where reducing friction to payments is turning into a large opportunity.

One solution popping up everywhere is to create virtual currencies, which solves the problem of paying for many items at small price points because it doesn’t make economic sense to charge 50 cents to your credit card on a regular basis.

Meanwhile, there’s lots of clogs in the system, ranging from gift cards that are never redeemed, to a large population of people who don’t have credit cards, to the more extreme, like what will eventually happen to all of those unused Groupon and LivingSocial vouchers?

Here’s a look at how all three are trying to add liquidity to the system:

Rixty: The San Francisco company allows consumers to buy prepaid cards with cash to be redeemed for game credits online, such as Facebook Credits and Zynga’s CityVille.

On the panel, Sorom announced that Rixty’s distribution was increasing from 20,000 physical locations to 70,000 with the addition of Green Dot MoneyPak prepaid cards, which are sold at Walmart and 7-11. Greendot charges a $4.95 service fee, which Rixty will redeem as soon as soon as the card is spent online.

Plastic Jungle: The San Jose, Calif.-based company is a secondary market for unwanted and unused gift cards.

The company buys them for up to 92 percent of face value, and sells them at a discount. Bower says some of the highest value gift cards are for Target and Walmart because they are the closest to cash. The lowest value cards are from local retailers or seasonal items, like See’s Candy, which only sell well on Valentine’s Day and Christmas.

SecondMarket: The New York-based company is a secondary market for private stock in companies, such as Facebook and Twitter. It deals in getting liquidity to employees or shareholders, who can’t yet sell their stock on the public market.

The summary is that while cash may still be king, the trend is to enable liquidity.

Some of the high-level takeaways:

– Thomas of SecondMarket: The company is constantly in headlines for being associated with Facebook’s $70 billion-plus or minus-private valuation. He said private company stock sales have become the fastest growing part of its business with transactions increasing to $400 million in 2010, up from only $100 million in 2009.

He said an essential part to keeping the assets liquid is to keep the information flowing, which is inherently difficult with companies that aren’t required to disclose any financial information. The company will soon be partnering with researchers to produce independent reports that will be purchased by potential investors.

Sorom of Rixty: One of the big questions was how dominate Facebook will be able to become as a virtual currency platform.

Most panelists agreed that it was inevitable that it will become a powerhouse, but that it will face hurdles on two fronts. In order for it to win, it will have to appeal both to consumers and merchants. And, currently it charges a 30 percent fee, which is much too high for most physical and even some digital goods.

Sorom said regulations will also limit its activities. Just like at Rixty, they have avoided allowing users too much liquidity. The credits can only be used for pre-approved merchants and can not be swapped or traded among friends. Similarly, Sorom believes that Facebook would not have that have that ability, given current federal regulations.

Bower at Plastic Jungle: Bower saved the best for last. Whenever trying to come up for a good description of liquidity think back to your college days, especially if they were pre-Internet.

As a crafty collegiate, he learned to live off one square meal, turning in his other meal plan points for cash. He purchased brand new textbooks on his parent’s dime and then returned them for used books a day later. All of the cash allowed him to gain the most important liquid asset of all — beer.

Photo Credit: Rick Scully.

Posting fourth-quarter earnings this morning, Sprint said it added 1.1 million total wireless subscribers, 58,000 of them two-year contract customers. Quite a milestone for a company that hasn’t seen a gain in postpaid subscribers in 13 quarters and a sign that Sprint may finally be turning a corner. Another good sign: Postpaid churn fell to 1.86 percent from 2.11 percent in the third quarter, and prepaid churn fell to 4.93 percent from 5.32 percent. And another: For the quarter, Sprint added almost 1.1 million wireless subscribers, its best showing in nearly five years.

All welcome news, even if Sprint is still losing money. The company reported a fourth-quarter loss of $929 million, or 31 cents a share, on revenue of $8.3 billion, up from $7.9 billion a year ago. Analysts polled by Thomson Reuters most recently forecast a loss of 30 cents a share on $8.15 billion in revenue. Said Bernstein analyst Craig Moffett, “Sprint CEO Dan Hesse might be forgiven for the temptation to hang a “Mission Accomplished” banner on the aircraft carrier that is Sprint. To his credit, he expressly declined to do so. Still, the company has at last achieved post-paid and total subscriber growth, customer service levels have improved, churn rates have been brought under control, and revenues were up.”

At $4.41, Sprint shares are up 1.15 percent in early trading as I write this.

However, even with the masses descending upon Las Vegas this week, Cricket has decided to delay the Muve music service and the launch of its first Muve-compatible phone.

Cricket had hoped to launch service in Las Vegas this week along with a number of other markets later this month.

Under its revised time frame, Cricket plans to launch the service in Las Vegas later this month, add nine more cities in February and roll it out to the rest of its markets this spring.

Although all the necessary licensing is in place, Cricket spokesman Greg Lund said that the company needed the extra time to ensure all of the software bugs were ironed out before it started asking customers to pay for the service.

“It’s got to be just perfect,” Lund told Mobilized in an interview at CES in Las Vegas.

The first extension of the event, it produced some very newsy sessions. We’ll be posting them all.

Today, Sprint Nextel CEO Dan Hesse talks about battling the leaders for dominance among wireless carriers.

It’s not easy being No. 3, but Hesse has tried to mind the gap by beefing up Sprint’s customer service and investing in the prepaid sector to attract a wider audience during the economic downturn. Going forward, Sprint looks to its 4G strategy for growth through its ownership stake in WiMax-provider Clearwire.

Here’s the video of the Hesse interview with Walt Mossberg:

Next up: Glenn Lurie, the man who brought the Apple iPhone to AT&T (for better and worse).

]]> http://allthingsd.com/20101227/d-dive-into-mobile-the-full-interview-video-of-sprint-nextels-dan-hesse/feed/ 2 http://allthingsd.com/20101219/little-known-cricket-wireless-tries-a-new-take-on-subscription-music/ http://allthingsd.com/20101219/little-known-cricket-wireless-tries-a-new-take-on-subscription-music/#comments Mon, 20 Dec 2010 05:00:14 +0000 Ina Fried http://mobilized.allthingsd.com/?p=1102 Bundling a music subscription into other goods and services has been tried a lot, mostly without success. However, Cricket Wireless is hoping to succeed where others have failed.

The company, best known for its prepaid phones, is offering a new service called Muve Music, which includes the cost of unlimited music downloads as part of a $55 monthly cellphone plan that also includes unlimited talk, text and Web. Basically, Muve adds about $10 to the cost of the monthly cellphone tab (which, incidentally, is about what one can expect to pay for the typical subscription music service).

The music is downloaded directly to the cellphone and is accessible as long as you remain a subscriber. From a technology standpoint, the service works by transferring the music to a secure partition of a 4GB digital memory card in the phone; Cricket says that partition can hold about 3,000 songs.

Cricket is launching the service next month with a single compatible phone–a color touchscreen feature phone known as the Samsung Suede, which will sell for $199. The service will first be available Jan. 6 in Las Vegas, with about 10 of Cricket’s other markets due to come on board later in the month.

What makes the service interesting is the approach–there is no tie to a PC whatsoever. Music comes to the phone, lives on the phone and is managed on the phone. In an interview, Cricket Vice President Jeff Toig said the service is geared to Cricket’s base of customers, many of whom don’t have a PC and broadband connection. It also allows them to get their music the way they do their other cellphone services–by paying in cash at the company’s retail outlets, thereby eliminating the need for a credit card.

The downside, of course, is that the music can only be played on the phone, though the phone can connect to a car stereo or external speakers over bluetooth or via a 3.5mm cable.

On the plus side, Muve doesn’t add much to the cost of a cellphone plan and eliminates some of the complexity traditionally associated with digital music. In addition to the ability to download and play tracks from all four major music labels, Muve subscribers can set any track to be either a ringtone or ringback tone (the music heard by callers while they are waiting for someone to answer).

Nokia tried a somewhat similar approach with its “Comes With Music” phones, which debuted in 2008. In that program, the cost of the music subscription was included in the price of the phone rather than in the monthly cellphone bill. Others, such as SpiralFrog, have tried to create services relying on advertising to subsidize the cost of providing music free to the end user.

Toig said that his customer base is one that typically isn’t downloading music from iTunes at 99 cents a pop, but includes a fair number of people that illegally download music from file sharing services.

The new service, he said, allows them to have a better experience without having to spend much more than they already are, while giving the record industry a chance to reach digital music customers they are largely missing out on today.

Unlike other services, which Toig said bank on the fact that people have access to a computer, Muve tries to make it easy to discover and download music directly from the phone. Customers can subscribe to curated feeds of music that get automatically updated, as well as find and download albums by name. A built-in social network allows them to see what their friends are listening to (assuming they also have a Muve-compatible phone).

“Nobody has done mobile music right,” Toig said.

Cricket won’t say how much of the incremental $10 in monthly revenue it is getting goes to the labels, but Toig said part of the bet is that Cricket will be able to reach customers that it otherwise could not.

“We’re obviously not doing this for a few percent,” he said. “We think this has appeal beyond our base to segments Cricket has not appealed to before.”

]]> http://allthingsd.com/20101219/little-known-cricket-wireless-tries-a-new-take-on-subscription-music/feed/ 0 http://allthingsd.com/20101207/sprint-ceo-dan-hesse-at-dive-into-mobile/ http://allthingsd.com/20101207/sprint-ceo-dan-hesse-at-dive-into-mobile/#comments Tue, 07 Dec 2010 22:45:26 +0000 Tricia Duryee http://emoney.allthingsd.com/?p=222

When Sprint CEO Dan Hesse joined the company three years ago, the third-largest carrier was bleeding subscribers from having a poor reputation for customer service and facing stiff competition from the likes of AT&T, which holds the exclusive on the iPhone.

Since then, Sprint has stemmed the losses, mostly by beefing up its customer service and by investing in the prepaid sector to attract a wider audience during the economic downturn. Going forward, Sprint looks to its 4G strategy for growth through its ownership stake in WiMax-provider Clearwire. Next up, Hesse joins Walt Mossberg onstage.

3:45 pm: Walt welcomes Dan Hesse to the stage. You can’t have mobile without networks, says Walt. You’ve led the way on 4G; tell us about it.

3:46 pm: Dan: We are getting San Francisco up soon, and will have 120 million POPs by the end of the year, or about a third of the country.

He explains what 4G is: 3G for was email and Web pages, but 4G is for multimedia and video.

The best analogy is that 4G is the wide open freeway vs. an interstate that provides the same speeds, but you have to stop along the way.

3:48 pm: Walt: Why are you using WiMax when the two other carriers are using LTE?

Hesse: Back in 2008, we wanted to be first, and WiMax was available right now. (Lots to do with TDD, and other technical mumbo jumbo). Technically, there’s no difference. I can’t deny that LTE will be a bigger ecosystem, but we couldn’t wait. We thought the market was ready.

With the success of the iPhone, we thought it was ready now.

Walt: How much leadership did it give you?

Hesse: Well, it made Verizon move a lot faster….In 2010, we’ll have 120 million POPs, and the EVO and Epic (two 4G phones) have been really successful.

Walt: How successful?

Hesse: If you were to go to Clearwire’s wholesale numbers, you should think of Sprint’s lion’s share of the wholesale numbers.

Walt: Was it worth the investment?

Hesse: I think so.

3:53 pm: Hesse: 4G is one element of many.

Walt: You like Consumer Reports, unlike the guy here earlier [AT&T's Glenn Lurie].

Hesse: Sprint is the fastest growing brand of postpaid in the U.S.–not the Nextel brand, where we’ve been losing subscribers.

3:55 pm: Walt: Are you going to get the iPhone?

Hesse: Can’t say.

Walt: Would you like the iPhone?

Hesse: Under the right conditions, yes, I would. It’s a wonderful phone.

3:56 pm: Backing up a bit, Walt now asks about an industry trend toward tiered pricing for data plans, where the more you use, the more you pay.

Sprint hasn’t yet limited users’ traffic.

Hesse: Customers will pay a premium for simplicity. Even if it’s not in their best economic interest, they will go with the unlimited plan. We were the first to come out with truly unlimited text, voice and data with the Simply Everything plan.

3:59 pm: Walt: Are you not going to do tiered pricing?

Hesse: So far, we aren’t, he says, which gets a round of applause from the audience. But Sprint did up the cost of the unlimited plans of the most capable devices on the network.

4:00 pm: Walt: Unlimited means unlimited or doesn’t it?

Hesse: No, it doesn’t. What if they have the SlingBox streaming 24×7?

4:01 pm: Hesse: The trend is toward one plan for all of your devices, like tablets, phones, PCs, etc.

Walt: Are you going to offer plans for all those devices?

Hesse: We are thinking about it. That’s the next step to simplicity. Three years ago, it was about one device.

4:02 pm: Walt: People aren’t counting minutes, now they are counting megabytes and things people don’t understand.

Hesse: Something has to give; what’s going to be the form? Do you have meters, do you have tiers, do you increase the price of the unlimited plans?

Another option is to have a lot more spectrum available to add capacity at a lower cost.

Walt: Are you talking about taking away the spectrum that the elderly use to watch their TV?

Hesse: If more spectrum is available, you can use more frequencies, which is a lot less expensive than splitting cell sites and putting in more towers.

Walt: There’s some confusion about Clearwire. They are opening stores and selling laptops and modems. You own most of that company, and they are building your WiMax network. Why are they competing with you?

Hesse: I have a wholesale business that resells minutes to Leap, so it’s the same thing.

4:06 pm: Walt’s giving Hesse grief about the structure of the Clearwire deal. Despite Sprint owning roughly 54 percent of the company, Sprint doesn’t control the board.

Walt: Who did that deal?

Hesse: Two thumbs pointing at himself [me]. When you have this many owners of the company, we can’t agree.

4:08 pm: Walt: What’s the value of 4G?

Hesse: The experience is really fast, and we offer unlimited plans on 4G. There’s a five-gigabyte cap on 3G, but 4G is completely unlimited.

Walt’s curious if 4G is really life-changing and transformative. Sprint’s beating the other guys by 2x, not 10x or 20x.

Hesse: My son showed me his speed test on his EVO at home, and it was over 8 mbps, so it depends.

4:11 pm: Questions from the audience. The Seattle Times’ Brier Dudley asks about the potential deal between Clearwire and T-Mobile, which may be falling apart because of Clearwire’s recent $1 billion in debt that it has raised.

Hesse deflects the question despite several reports to the contrary, by saying he didn’t know anything about that.

Another audience question: What’s your stance on network neutrality?

Hesse: The FCC has come out with a proposal, and we are very supportive of it.

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]]> http://allthingsd.com/20101207/sprint-ceo-dan-hesse-at-dive-into-mobile/feed/ 1 http://allthingsd.com/20101025/sprint-to-sell-samsung-tablet-for-400/ http://allthingsd.com/20101025/sprint-to-sell-samsung-tablet-for-400/#comments Mon, 25 Oct 2010 17:25:30 +0000 Roger Cheng http://voices.allthingsd.com/?p=31505 Sprint Nextel Corp. said it plans to sell Samsung Electronics Co. Ltd.’s Galaxy Tab tablet computer for a third less than Verizon Wireless, though Sprint will require a long-term contract.

Sprint will sell the device for $399.99 in exchange for a two-year commitment to a data service plan. Sprint will begin selling the Galaxy Tab on Nov. 14, three days after Verizon Wireless.

Verizon Wireless said last week it would sell the device for $599.99, but offered a prepaid data plan without the requirement for a contract.

For any mobile product, getting the proper marketing and subsidy support from a carrier is crucial to a successful launch. A subsidized device can dull much of the sticker shock that comes from seeing the actual retail prices. Carriers are willing to offer a discount because they can lock customers into multi-year service agreements.

Verizon Wireless’s decision to sell the product without a subsidy had some industry analysts speculating that it wouldn’t fare well against the iPad, which the carrier also plans to sell for as little as $629.99.

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]]> http://allthingsd.com/20101025/sprint-to-sell-samsung-tablet-for-400/feed/ 0 http://allthingsd.com/20100922/metropcs-launches-lte-network-in-las-vegas/ http://allthingsd.com/20100922/metropcs-launches-lte-network-in-las-vegas/#comments Wed, 22 Sep 2010 12:00:16 +0000 Roger Cheng http://voices.allthingsd.com/?p=30177 MetroPCS Communications Inc. (PCS) said it switched on its fourth-generation wireless network in Las Vegas as the prepaid carrier makes a big push into data services.

The Dallas company is the first U.S. carrier to offer a 4G network that runs on Long-Term Evolution, or LTE, technology. It comes ahead of Verizon Wireless (VZ), which plans to turn on its own LTE network by the end of the year, and AT&T Inc. (T), which has set its own 4G ambitions for next year.

The aggressive push to 4G illustrates the importance of data services—even for a prepaid provider like MetroPCS that traditionally serves the low end of the wireless market with phone calls.

“More than half of our customers use their handset as their primary access to the Web,” MetroPCS Chief Executive Roger Linquist said in an interview. “What we needed is a better experience.”

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]]> http://allthingsd.com/20100922/metropcs-launches-lte-network-in-las-vegas/feed/ 0 http://allthingsd.com/20100514/phone-rivals-dial-up-prepaid-services/ http://allthingsd.com/20100514/phone-rivals-dial-up-prepaid-services/#comments Fri, 14 May 2010 07:00:31 +0000 Niraj Sheth and Roger Cheng http://voices.allthingsd.com/?p=25063 The big U.S. wireless carriers–risking profits for growth–are moving more aggressively into the low end of the cellphone market: Selling services to consumers without requiring them to sign contracts.

Sprint Nextel Corp. (S) is rolling out new brands and plans, including a partnership with Wal-Mart Stores Inc. (WMT) announced Thursday that will charge seven cents per minute or text message–about half as much as TracFone Wireless, the largest U.S. prepaid provider.

Verizon Wireless, (VZ) which had largely avoided the prepaid market, has opened its nationwide network to prepaid resellers. In the first quarter, Verizon accounted for nearly half of the industry’s prepaid subscriber additions.

The entry of larger carriers into prepaid service has pressured smaller players like MetroPCS Communications Inc. (PCS) and Leap Wireless International Inc., (LEAP) which combined have 12.4 million customers, to slash prices and explore a merger.

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]]> http://allthingsd.com/20100514/phone-rivals-dial-up-prepaid-services/feed/ 0 http://allthingsd.com/20100506/did-ipad-data-deal-extend-atts-iphone-exclusivity/ http://allthingsd.com/20100506/did-ipad-data-deal-extend-atts-iphone-exclusivity/#comments Thu, 06 May 2010 17:30:04 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=39942
There’s an interesting theory being floated today by Broadpoint AmTech research analyst Brian Marshall: By agreeing to offer “breakthrough” 3G prepaid data plans for Apple’s iPad, AT&T won an exclusive on the device and extension of its iPhone exclusivity agreement.

In the run-up to its debut, many believed the iPad would be supported by multiple carriers. But when Apple announced the tablet in late January, that didn’t prove to be the case.

The reason, Marshall tells Computerworld, is likely those cut-rate data plans AT&T (T) currently offers for the iPad. 50 percent off the carrier’s normal wireless data rates was evidently an offer Apple (AAPL) couldn’t refuse, one perhaps good enough for it to oust Verizon (VZ) as an iPad launch partner and delay the debut of the iPhone on that carrier’s network.

“AT&T had to do something dramatic to get the iPad,” he said. “For that pricing [on the iPad], AT&T was able to negotiate a six-month extension on the iPhone exclusive.”

Seems a plausible argument to me, though it’s obviously sheer speculation on Marshall’s part. AT&T’s exclusivity agreement is reportedly set to end this year. If it doesn’t, well, Marshall may have been on to something here, though we’ll likely never know for sure.

]]> http://allthingsd.com/20100506/did-ipad-data-deal-extend-atts-iphone-exclusivity/feed/ 0 http://allthingsd.com/20100422/verizon-profit-falls-as-wireless-relies-on-lower-end-customers/ http://allthingsd.com/20100422/verizon-profit-falls-as-wireless-relies-on-lower-end-customers/#comments Thu, 22 Apr 2010 17:31:13 +0000 Roger Cheng http://voices.allthingsd.com/?p=24246 Verizon Communications Inc.’s (VZ) first-quarter earnings plunged, hurt by a health-care-related charge, as more wireless customers shunned the practice of signing a long-term contract.

Verizon Wireless’s usual bread-and-butter—so-called post-paid subscribers willing to spend more each month and stick with the service–failed to show up during the period. For the first time, the carrier had to rely on reseller partners who sign up lower-end prepaid customers to offset a 67% decline in the number of new contract customers.

The struggles of the country’s largest wireless carrier underscore a growing dilemma facing an industry traditionally dependent on adding lucrative contract customers.

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]]> http://allthingsd.com/20100422/verizon-profit-falls-as-wireless-relies-on-lower-end-customers/feed/ 0 http://allthingsd.com/20100217/magicjack-review/ http://allthingsd.com/20100217/magicjack-review/#comments Thu, 18 Feb 2010 02:06:20 +0000 Walter S. Mossberg http://ptech.allthingsd.com/?p=1183 When I see a high-tech product that’s advertised mainly via frequent hard-sell TV ads, as if it were a diet pill, I tend to assume it can’t be very good, especially if its price is absurdly low. So, I haven’t paid much attention to a product called magicJack, a small $40 adapter for your computer that claims to let you make unlimited domestic phone calls over the Internet with your home telephone free for a whole year—and for just $20 a year thereafter.

But after receiving reader requests to review magicJack, I decided to do so. To my surprise, it worked pretty much as advertised. It has a few drawbacks, and extra fees for added services, such as vanity phone numbers. But I found magicJack easy to set up and easy to use, and it yielded decent, if not pristine, call quality. I even tested customer support—a source of complaints online—and found it friendly, fast and responsive.

MagicJack looks like an oversized USB flash drive. On one end is a standard USB connector for the PC; on the other is a standard phone jack to plug in a phone. It’s compatible with PCs running Windows XP, Vista and Windows 7, as well as with all Intel-based Macs. It works with both corded and cordless phones, and comes with software for dialing, though you can also dial directly from a connected phone.

The low annual fee covers calls to and from any phone on any telephone network—landline or cellphone—not just phones connected to computers or to other magicJacks. The only restriction is that the numbers called must be in the U.S., Canada, Puerto Rico or the U.S. Virgin Islands. You can also buy low-cost prepaid international minutes, or take your magicJack abroad to make free calls home. You can move it among different computers and locations.

MagicJack can also be used without a phone handset, via a computer headset or the computer’s built-in microphone and speakers.

YMAX’s magicJack

There’s nothing new about Internet phone calling. Companies like Vonage and Skype have been doing it for years. But magicJack is different. It emphasizes calling to and from phones on regular wired and wireless phone networks, and its prices for calls to and from such non-Internet-connected phones are much lower.

For instance, the lowest plan advertised on Vonage’s (VG) Web site for calling regular phones in the U.S., Canada and Puerto Rico is $17.99 a month, or about $216 a year, versus magicJack’s $20. And Vonage gives you only 500 minutes a month, while magicJack sets no limit. Skype charges per-minute or monthly fees for calls to regular phones and an added fee to receive incoming calls.

The maker of magicJack says its low prices are possible because the product is produced by a privately held Florida company called YMAX, which is also a phone carrier. The company also runs ads inside its software. You can buy the device at a wide variety of stores, even drugstores and convenience stores.

I tested magicJack on both a PC and a Mac. The software resides inside the magicJack itself and installs each time you connect it.

In my tests, I made and received calls on both computers, using a single landline phone and using a cordless-phone system in my house after plugging its base station into the magicJack. In the latter case, I could make and receive calls from cordless phones all over my house. I exchanged calls with both landline phones and cellphones from the magicJack.

The call quality was good, except for a few times when the connection got scratchy for a second or two. Most of the people I called said they couldn’t tell I wasn’t on a regular call. The system offers voice mail, call forwarding and conference calls, and you can save contacts.

A couple of times I didn’t get an immediate dial tone, and had to hang up and try again.

The biggest downside of the magicJack compared with regular phone service is that you have to be running an Internet-connected computer, with a magicJack installed anytime you want to make or receive calls. Also, as with all Internet phone systems, you have to register your address with 911 emergency systems.

With magicJack, you get a new phone number. The company says it is working on allowing you to port your existing landline number. You can keep your landline number for use on some phones or when you’re not using magicJack.

I found magicJack worked better on Windows than on the Mac. At one point, magicJack customer support had to send me software to patch the Mac version. But the company claims it is fixing that with a new Mac version coming soon.

YMAX also says it plans to roll out this year a Skype-like service that won’t require any magicJack hardware, just a PC or an iPhone. It also plans a new version of magicJack to turn cellphones into wireless magicJack handsets.

I don’t know if those diet pills in the TV ads work. But magicJack does.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

]]> http://allthingsd.com/20100217/magicjack-review/feed/ 0 http://allthingsd.com/20100210/sprint-nextel-still-struggling-to-keep-subscribers/ http://allthingsd.com/20100210/sprint-nextel-still-struggling-to-keep-subscribers/#comments Wed, 10 Feb 2010 13:57:44 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=34602 Sprint hasn’t posted a quarterly net gain in wireless subscribers in longer than anyone would care to remember, and its latest quarter was no different. Reporting fourth-quarter earnings this morning, the carrier said it lost a net 148,000 subscribers during the quarter. 504,000 contract or “postpaid” subscribers fled, but the carrier offset those losses by signing up 435,000 “prepaid” customers.

This was a marked improvement from the third quarter, when Sprint (S) lost a net 545,000 subscribers. So Sprint, while clearly not taking market share away from Verizon (VZ) and AT&T (T), is at least it’s doing a better job of holding on to the market share it has–or is at least losing share less quickly than previously (see charts; click to enlarge).

Not that this effort is helping the company’s bottom line all that much. For the quarter, Sprint posted a loss of $980 million, or 34 cents per share, compared with a loss of $1.6 billion, or 57 cents per share a year earlier. Excluding charges, that loss was 23 cents per share–quite a bit worse than the loss of 19 cents analysts had been expecting. Revenue was disappointed as well, falling to $7.87 billion from $8.43 billion. Analysts had been expecting $8.01 billion.

So when can we expect Sprint to return to subscriber and revenue growth? On a conference call with analysts this morning CEO Dan Hesse declined to say.

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