What's the real story behind the Verizon Wireless and Skype tie-up?

In the following guest post, TC2's London-based managing director Ben Fox continues his comments about the Mobile World Congress in Barcelona.

Besides the increasing momentum for establishing LTE as a global mobile broadband standard, the other very interesting announcement from Barcelona came from Verizon Wireless and Skype. The two companies reported that, beginning in late March, Verizon Wireless will allow subscribers to use Skype's IP voice application over its network.

By downloading the Skype application to their Verizon Wireless smartphones, end users will be able to call other Skype users around the world for free. This represents a significant change of heart from a carrier (and indeed an industry) that to date has been very territorial in terms of allowing users to take advantage of applications that could reduce its own revenue.

So what's in it for Verizon Wireless? The answer is data revenues. As I noted last month, Verizon Wireless' strategy is currently focused on driving the penetration of data services. And for Verizon Wireless users to be able to use Skype, they will need to subscribe to a voice and data plan.

No doubt Verizon Wireless has calculated that the lost voice revenues from Skype usage will be more than offset by the increased data plan revenues and by the increased adoption of the smartphones that will be needed to use Skype, which typically drive increased average revenue per user (ARPU) compared to more basic devices. Perhaps they're even anticipating a further compensation for lost voice revenues in the increased revenue from the higher ETFs associated with these types of devices and plans!

Skype and Verizon Wireless stated that their agreement is "exclusive", although it is unclear what that really means, since the Skype application has been available for some time on AT&T Mobility's network via the iPhone. Perhaps Verizon Wireless's thinking is that AT&T users have so far only been to use Skype over WiFi, not 3G, access. But a version that operates on GSM/HSPA is supposed to be pending.

Of course Skype does not tend to be an application that large enterprises actively roll out and support for their end-users, so this might have limited initial relevance to business users. However, using Skype (and similar VoIP applications) on a smartphone whilst roaming on WiFi networks to save money, compared to paying $1+ a minute to roam on a GSM network in a foreign country, is a far more intuitive and "traditional" phone experience than using a soft phone (Skype or otherwise) on your laptop. So there is certainly money-saving potential in this area for enterprise customers.

But the more important takeaway for the business user from this Skype/Verizon Wireless announcement is the continuing shift in focus for wireless carriers all around the globe from voice revenues to data revenues, driven by the evolution of all cell phones into smartphones. Similar announcements in 2010 already include Google's Nexus One, Windows Phone 7 for mobiles, the Wholesale Applications Community mobile application alliance, and carriers announcing increased after-sales support for smartphone users. These all demonstrate the importance of smartphones to the carriers and the pressure that all carriers, manufacturers and software developers are under to get ahead of the pack and differentiate their smartphone service offerings.

Although much of the initial adoption of the more innovative services (such as the iPhone and Apple's application store) has been driven by consumers, the carriers, manufacturers and software developers now have business users firmly in their sights. Google has already been talking about a version of its Nexus One aimed at business users, and in the UK, Vodafone is specifically targeting business users in its iPhone adverts.

The bottom line is that we are already seeing business end-users at our clients pressuring their telecoms departments to offer an increasing array of smartphone devices, not the least of which is the iPhone, as well as a rich variety of new services and applications. A BlackBerry that only provides voice calling, email, calendar and contact directory functions is no longer enough! Mobile device management, rather than getting easier, will become exponentially more challenging.

On the other hand, when the world ultimately moves to a single global mobile standard -- LTE -- the job of managing your enterprise's global mobility requirements should become somewhat easier, though I'm afraid that the impact of LTE will be a ripple on the ocean compared to the tsunami of challenges presented by user demands for an ever increasing range of smartphone applications and functionality.

LTE triumphant? Barcelona brings CDMA carriers into the GSM Association

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

This week's 2010 Mobile World Congress in Barcelona has been the setting for a number of significant developments in the global mobile marketplace. One of the most significant for enterprise users is the announcement that China Telecom, KDDI and Verizon Wireless, three of the world's largest CDMA operators, have joined the GSM Association (GSMA).

The force that is bridging the CDMA and GSM worlds is the worldwide adoption of the Long Term Evolution (LTE) 3+G (or 4G, depending on the day) standard.

This week's GSMA announcement is further proof that the world is moving to a single global mobile standard, which would bring benefits to all parties, including mobile device manufacturers, carriers and end-users. All parties, that is, except those who don't adopt the standard!

Device manufacturers will be able to focus all their efforts on a single technology platform. Carriers will be able to seamlessly interwork with each other -- even Verizon Wireless and Vodafone, whose incompatible technologies have made them strange bedfellows up until now. And ultimately, we hope, end users won't need to worry about their Verizon Wireless smartphone not working when they travel to Europe (although they will undoubtedly still need to worry about the cost of international roaming).

U.S. users also should not overlook the importance of China Telecom and KDDI joining at the same time as Verizon Wireless. China Telecom is the largest state-owned telecom operator in China, and KDDI is Japan's second-largest cellular operator. We're going to be watching China Telecom's next steps in this space very closely, because historically Chinese carriers have specifically avoided adopting western technologies and instead sought to develop their own solutions. This could signal the beginning of the end of that policy.

Of course the elephant in the room that the announcement ignores is WiMax, the competing 4G technology. Despite being first to market, WiMax does not appear to reach the projected speeds of LTE and, much more importantly, has far less backing from heavyweight global carriers.

Thus describing it as an elephant is probably far too generous. WiMax no doubt has a future in certain key areas such as fixed wireless and greenfield infrastructure builds, but the fact is that the major players are all lining up behind LTE, which makes LTE the hot favourite for the future global mobile standard.

In fact, in a number of ways the world's leading carriers are either acknowledging or finally catching up to technological reality, and this isn't the only announcement from Barcelona that bears this out. Verizon Wireless and Skype have announced that Verizon Wireless will enable Skype calling over its network. I'll have some thoughts about that for the enterprise segment tomorrow.

How accurate is your commitment tracking report?

The following is a guest post by TC2 Senior Consultant Janis Stephens, whose special expertise includes many of the disciplines surrounding contract compliance and bill auditing.

Everyone assumes that their telecom bills will contain errors. But most enterprises accept their carriers' commitment tracking reports at face value. Why is that?

Commitment tracking reports are spreadsheets or tables designed to show the progress that customers are making toward retiring the dollar commitment that's typically embedded in an enterprise deal. They're often referred to as "MAC tracking reports" because the "Minimum Annual Commitment" is the most common (but not only) type of quid pro quo built into carrier deals.

But these reports are notoriously unreliable. And it's easy to let carriers get away with bad tracking reports, either because they're presented at an extremely high level -- monthly spend grouped into broad categories with no further explanation -- or because they contain excruciating detail that makes it a real chore to pinpoint problems.

Often the basic categories on these reports include such broad strokes as "domestic" and "international" that leave it to the imagination what exactly is being included. And some items may never find their way into the reported revenue, such as data and managed services that were introduced after the the deal was first signed, or international access revenue that your carrier may not think of as its own but is definitely part of your deal.

But the really big challenge in commitment tracking is the complex interplay between billing systems, contracts, service guides, and tracking reports. The last thing you should assume is that your carrier has a clean, "push-button" way to produce an exact revenue match to the services listed as commitment-eligible in your contract.

In some carrier organizations, account teams may be asked to grab bills and reports from different places for MAC-eligible services to produce the tracking report, leaving you at the mercy of essentially manual procedures. In other cases, there may be a conflict in the parties' understanding of the list of MAC-eligible services, especially if the carrier's service guide is more specific than the contract. Example: If your MAC-eligible list doesn't specify advanced features for call centers, and you assume that merely listing the name of your carrier's dedicated inbound call platform covers it, you'll have a problem if the service guide says that features aren't commitment-eligible.

And in some cases, even the MAC-eligible "list" is really an amalgam of several different contract attachments and side letters, practically begging for tracking report problems. Just as billing errors are almost always in the supplier's favor, tracking report errors most typically understate your commitment-eligible spend. But correcting those errors through a tracking-report verification is a broad, all-encompassing process that often requires you to examine the entire chain of procurement and fulfillment to unlock the puzzle.

If a tracking report indicates a potential shortfall, or if it indicates that a customer's spend is close to the commitment, a comprehensive analysis of the tracking report is warranted (which, of course, is something that TC2 can help you with). And if the supplier is providing inaccurate information, it's best to challenge it early rather than wait for the supplier to formally declare the company in shortfall, and then try to dispute a shortfall penalty.

But in almost any situation, customers will gain leverage during their contract term by knowing where their spend really stands vs. their commitment. In the current recession, the big carriers continue to try to box in customers with non-market-based renewal and extension offers and other one-off arrangements. An inaccurate or even uncertain view of how much cushion you have vs. your commitment robs from your ability to present a competitive face to the market and bring out the carriers' more aggressively competitive personality.

And think about it: Even if you do have a substantial cushion, you still aren't likely to use it to move traffic to another carrier, or to generate a better offer short of an optimally timed RFP, unless you know for certain what that action will mean for your remaining flexibility.

Some of these same dynamics are increasingly playing out in wireless deals. Customers often eagerly track their spend, usage or device counts according to how they contribute to the discount tiers that the business is expecting (or, in some cases, that they've effectively promised to individual-liable users). But many enterprises also need to verify the dollar spend or usage that contributes to average monthly spend/usage commitments that competitive flat-rate (but not all-inclusive) voice plans often entail in corporate deals.

Many of these customers are experiencing the same uncertainty over supplier tracking reports that steal their confidence in securing the benefits of existing wireless deals and gaining forward leverage. Unraveling the complexity of the back-office systems that carriers employ to bill and report is a key management task that enterprises are facing across their entire telecom spend. The dedicated effort to solve this challenge will pay dividends in both dollars and confidence.

Is it safe to send text messages in Europe? Mobile caps and the corporate user

The following is a guest post by TC2 Senior Consultant Mark Sheard, who is based in London.

Did 2009 mark the end of overcharging for text messaging and data applications while roaming in Europe? You might think so because of last year's European Union roaming caps on texting and data and video applications, as well as an accompanying overall mechanism designed to put a brake on soaring mobile bills.

But that's only part of the story. European and multinational enterprises can only get the full benefit of these measures to solve the chronic problem of runaway mobile charges if they take additional steps. These corporate 'bill shocks' (as the EU put it) might not be as immediately obvious as those, for example, on my teenage daughter's mobile, but close inspection could be more shocking than you thought!

Telecom managers with responsibility for users traveling through Europe should remember the unique aspect of mobile cost management within the EU. The "single market" paradoxically can make it more difficult to keep costs under control. Roaming charges often begin at every national boundary even as users freely move about the continent.

Viviane Reding, the EU Telecoms Commissioner, was addressing this when she described the EU's objective in enacting mobile caps: "What we want to achieve is simple: sending text messages or downloading data via a mobile phone while being in another EU country should not be substantially more expensive than at home. This is the logic of the borderless single market."

Accordingly, since July 1st of 2009, roaming charges for SMS (text messages) have been capped by the EU at a retail cost of €0.11, which compare very favorably with the average cost of a "roamed" text message in the EU between October 2007 and March 2008 of €0.29. The key elements of the regulation are as follows:

-- Limits the price for sending a text message while abroad at €0.11. Receiving an SMS in another EU country remains free of charge.

-- Reduces the cost of surfing the web and downloading movies or video programs with a mobile phone while abroad by introducing a maximum wholesale cap of €1 per megabyte downloaded. This limit will be decreased each year.

-- Further reduces prices for mobile roaming calls with a maximum tariff of €0.43 for making a call and €0.19 for receiving one.

-- Introduces per-second billing after the first 30 seconds for calls made and immediately for calls received.

But these regulations are only a start. Most businesses of scale should be securing competitive rates that are better than the regulated capped rates. If a quick review of your contracts shows that you haven't got better rates, yet you have many roaming users, it is time to plan for a review of your wireless telecoms spend. This should start with an early interview with your incumbent provider's account manager.

In negotiated custom corporate wireless contracts, market leading pricing for roaming usage tracks substantially below the regulated price caps. The significance of the roaming rates cannot be underestimated -- for many MNCs roaming spend can be 50% or more of their mobile costs. Hence, securing competitive rates for voice, data and SMS (texting) is crucial.

Determining whether you have good rates for voice, SMS and data might start with a look at the EU provided information on tariffs. The EU site will give you rates for roaming across Europe. Some might find it a useful starting point to see whether or not their negotiated rates are any better than standard supplier pricing.

Remember that this site is restricted to European countries and published rates. As good as it is to see efforts to provide more open information to consumers, spotting whether you are securing rates commensurate with your corporate spend is not in reality possible from the EU's site. But an interesting exercise is to click on the little timeline down the side of the rate tables and see the differences in prices over time. Immediately, it shows the continued downward trend in charges that telecoms managers should be seeking to emulate for their own contracts.

For one thing, it illustrates that operators really do need some help and encouragement to pass on price reductions to the consumer. Note particularly the drop in voice pricing in 2007 when EU regulation was first brought in! Would these have dropped so significantly without regulation?

For SMS and data, the recent step change down is initially likely to mean some stagnation in the rate of change, but in reality for most MNCs, the recent regulation should have a pull through effect on roaming data pricing. But negotiating improved SMS and data roaming rates in isolation may not be straightforward. Ideally, a structured competitive process will bring the greatest returns in terms of cost reduction, and typically the greatest opportunity for the provider to give you the best deal will be if you widen the scope of the procurement.

Mobile SMS and mobile access to the Internet and corporate networks are growing exponentially, and whilst the EU capping on roaming charges is very good news the caps should be regarded as the starting point for your negotiations, not the end.

Keep a variety of tools in your ETF offset toolbag

It's earnings season on Wall Street, and the financial media flash revenues and earnings-per-share numbers on each reporting company. But most of the alerts I get from Wall Street telecom analysts instead highlight the internal figures for each major carrier, especially on the wireless side -- ARPU (average revenue per user per month), and churn (percentage of customers cancelling or leaving during the period).

Now that wireless is considered the main profit generator, the carriers have pretty much gotten the analysts used to rising ARPU and falling churn. The problem is that the drive toward constantly falling churn, while certainly admirable, has potentially negative side-effects.

That's one of the sources of the scare toward the end of last year over Verizon Wireless' hike in consumer early termination fees (ETFs) to as high as $350. In theory, there's nothing wrong with a certain base level of churn if it's caused by something other than dropped calls or bad customer service. Rollouts of new devices and next-generation networks obviously cause customers to look around for new options at a faster rate than before. So naturally, that occasionally leads them to change carriers. But that activity threatens Verizon's industry-leading 1.06% churn and, perhaps goaded by Wall Street, they want to stop it.

In business wireless contracts, Verizon's outsize ETFs don't apply to corporate-liable devices. But many companies rely on an overwhelming number of personal-liable devices to make their negotiated discount tiers with a carrier, in effect leaving their pricing at the mercy of independent users' reactions to carrier marketing.

Other business users are frustrated by lower but still onerous ETFs on a big pool of corporate-liable devices, and find negotiated offsets to be insufficient. One classic headache: "Pro-rated" ETFs that aren't truly pro rata -- say, a $5-per-month reduction in a $175 ETF on a 24-month contract (it would take 35 months to make such a concession a straight-line proration).

Effective ETF management reminds me of the problem of rate reviews in wireline contracts. While some carriers are trying to cut out rate reviews, some customers are trying out better alternatives such as term rather than annual commitments. Similarly, while a complete waiver of all ETFs was sometimes available to very large customers and is now more difficult to achieve, many companies are turning to waiver pools to get the right to end a set percentage of their corporate-liable lines every year without charge.

Still other companies with high turnover in certain business units implement policies that require re-use of individual lines, often combined with "suspend" or "seasonal" plans for the period between two employees' use of the line.

There's a real continuum of techniques here. That's why I like an 18-minute podcast that's available free in the "Telecom Junkies" series run by the folks at The Voice Report, because it describes a whole gamut of these tools.

The podcast, recorded in November and called "Savings Tips in Wake of VZW Termination Fee Hike," features among others LB3 partner Kevin DiLallo. Kevin is an occasional contributor on this blog, including recent notes about the IRS rules on personal cell phone usage and the text-message donation dilemma for corporate-billed devices. Kevin's advice is always practical and tuned to the needs of business users in particular situations. I encourage you to check out the podcast.

AT&T huffs and puffs to keep up with the power of its brand

In the telecom industry, life is different when your name is AT&T.

Recent network difficulties that iPhone users have experienced in big cities such as New York and San Francisco are reminiscent of any number of past capacity and congestion incidents with AT&T services. So is AT&T's stated determination to furiously catch up -- and, in the current situation, also blunt Verizon's "war of the maps" 3G claims now that AT&T has dropped the legal attack on Verizon's ads.

Going back many years and generations of technology, AT&T has often given the impression of being constantly surprised by the popularity of the new services it brings to market. Incredibly, this tendency seems to carry over to whatever entity newly obtains the AT&T moniker as the makeup of the company changes.

Is there something about hanging the old "American Telephone & Telegraph" legacy around your neck that causes this phenomenon? Perhaps it's really because the AT&T brand is so powerful that it pulls in users beyond what the company originally plans for or, sometimes, merits.

During my time as a writer at Network World from 1994 to 2001, this kind of thing happened at least three times, and veteran telecom managers may remember all of these incidents:

-- AT&T was late to market on frame relay, having been beaten by the "first WilTel," an innovative carrier that later got sucked into the vortex of WorldCom mergers, and then by Sprint. AT&T executives had poor visibility into the popularity of the service, and within a year or two ran out of capacity and had to quickly order up more "Stratacom" (later Cisco) switches to catch up.

-- Later in the decade, AT&T management missed the speed of a trend by branch offices to move from switched to dedicated access. (Believe it or not, back then the only dedicated connection to interexchange carriers that even some sizable offices had was a 56K bit/sec frame relay link.) Rapid price-downs on dedicated-to-switched voice, plus growing data bandwidth demands, led many offices to finally order T1s. AT&T literally ran out of T1 ports in a number of POPs and had to hustle to recover.

-- Around the turn of the decade/century, capacity problems bedeviled the original, pre-Cingular AT&T Wireless network. This caused significant embarrassment for a veteran AT&T wireline executive who had lost a battle to become CEO of the main company -- that prize went to an outsider, Michael Armstrong, which is a whole other problematic story -- and who tried his hand at the wireless operation instead.

Make no mistake -- AT&T is responding now. In fact, AT&T's huge $18-$19 billion capital expenditures budget for 2010 includes a doubling of wireless network investment. That throws light on the capex-vs.-"free cash flow" paradox that we've highlighted as a key financial point in evaluating carriers. A modern-day carrier can almost never declare its networks "finished" and push away from the table.

There's another factor driving AT&T's situation besides capacity, and that's the urgency of the applications themselves. For significant portions of your end-user base, gone are the days when they considered mobility a second choice to fixed lines. We've noticed this in increasingly strict service management requirements demanded by enterprises in wireless competitive bidding -- device delivery, line activation, feature and call plan changes, that sort of thing.

Often telecom managers who do recognize the difference in maturity between wireline and wireless services say they're nevertheless driven to demand stricter wireless metrics by their end-user base. Not only AT&T but the other wireless carriers are learning this quickly as well.

And AT&T's 2009 earnings announced yesterday? They came in at $12.5 billion. And look at this: $17.1 billion in free cash flow even after capital expenditures. How about that?

Obviously there's no shame in asking for a great deal and a great network all at the same time -- even from, or especially from, the greatest legacy name in the telecom industry and one of the most enduring brand names in the history of business.

Cell phone donations show need for coordinated policy, technical and HR safeguards

The following is a guest post by LB3 partner Kevin DiLallo, whose practice includes a specialty in the negotiation of enterprise wireless service contracts.

Putting mobile devices with far more independent intelligence than the regular desk phone into the hands of thousands of employees has always carried the risk of unintended consequences. Society as a whole now practically considers cell phones and smartphones as traveling personal transaction machines, leading to increasing public discussion about using mobile devices for personal and civic purposes.

All of that is highlighted by the wireless industry's successful campaign to raise money for Haitian relief by allowing subscribers to send contribution pledges via text message. This phenomenon has raised over $22 million to date for the American Red Cross. But it's also put telecom managers who issue corporate-liable devices in a tough spot, as large numbers of holders of those devices have effectively pledged funds on the company's dime.

Yet this dilemma simply reflects two recurring issues in enterprise procurement of wireless devices: (1) whether to hold employees accountable for personal use of wireless devices; and (2) how best to employ technical solutions to curb unauthorized uses of those devices.

There are actually many reasons for a company to require employees to account for their personal use of company-subsidized wireless service and devices. One is the arcane, but still in force, IRS recordkeeping and reporting rules for company-issued cell phones. Another is to discourage personal use of company assets that could cut into the employee's normal work routine.

And of course, your company has a purely economic interest in preventing the diversion of corporate funds to unauthorized, personal uses while not appearing as uncaring to your employee base.

Going forward, it's probably easier to simply use technical measures to prevent such personal uses of company-issued mobile devices from the get-go, rather than leaving the door open for such use and then trying to recoup the cost of employees' personal use after the fact. For this reason, we often advise clients that an internal company policy regarding "acceptable use" of company-issued cell phones, while a good idea, is not self-enforcing, and needs to be backed up by technical safeguards.

For programs that allow subscribers to bill fees or donations through their monthly wireless bill -- i.e., using their cell phone like a credit card -- enterprise customers can prevent such costs from showing up on their bills in the future simply by asking their national account reps to block all texting to short codes from corporate-liable devices. Ordinary SMS messaging should be unaffected, but promotions accessed via short codes -- which often entail fees -- will be out of reach of corporate-liable subscribers, at least from the devices their employers subsidize.

But for right now, in the wake of the Haitian crisis, it might be helpful to coordinate with your human relations, public relations and/or corporate giving departments to craft a comprehensive message to employees about why messages are being blocked, and to state any position about both corporate and employee participation in humanitarian relief and alternative ways to contribute.

Short code SMS messages are just one example of the many uses of wireless technology that could increase enterprise subscribers' costs and distract employees from their day-to-day responsibilities. Other examples, all of which can be blocked upon request, are video and music downloads, voice calls to 900 numbers and directory assistance, ringtones, and wallpaper. And for security purposes, enterprises might also consider disabling the camera functions on devices equipped with cameras.

One thing's for sure: Your employees will be asked to reach for their cell phones many times in the future by forces outside your company's control. So this is an ideal time to be coordinating your wireless policies with technical safeguards and good, positive employee communications that acknowledge both their corporate obligations and desire to be good citizens. It's another example of the growing general management challenges of the corporate telecommunications function, and it's something we're continuing to follow closely.

Impending 4G network buildouts will soon drive critical enterprise decisions

The following is a guest post by TC2 managing director Jack Deal, who is based in Baltimore.

A big part of effective corporate telecom management is timing. That's obviously true when you're dealing with a tactical issue such as when to release an RFP compared to pending contract expirations. But it's also true when you're dealing with a strategic issue such as exactly how to frame your company's technology migration paths. That encompasses both internal planning discussions and external communications with your current -- and prospective -- suppliers.

We've previously seen that companies who've gone to market for MPLS services at the right time with a demonstrated market understanding and proper framing of their demand set have hit a home run with their results. We're now seeing the same phenomenon in two key areas: wireless procurements that incorporate a much bigger percentage of smartphones than enterprises used to accept, and, increasingly, SIP trunking services that comprehensively replace TDM local and long distance infrastructure with dynamic VoIP pricing elements.

What's next? It's time to start planning for 4G wireless. Just about every global carrier is planning to move to 4G networks in some form over the next 12-24 months, and 4G markedly impacts on the use and sourcing of wireless services. Like 3G, 4G networks are optimized for packet-switched data. But they provide much faster download/upload speeds, provide more efficient use of spectrum, and are accessible by a wide variety of devices (not just PCs and smartphones).

Enterprises have to stay on top of this trend for the simple reason that mobility has already proven to be a potential cost-crusher when end-user behavior is not properly anticipated and managed. Already some analysts are picking up on the idea that consumer expectations are invading the business marketplace, with behaviors that suggest that portions of your employee base will stop thinking of landline voice and data devices as the default option and mobility as the fallback.

The carriers' 4G marketing when it arrives -- and wireless telecom is basically the one "growth area" of mass-media advertising in the U.S. right now -- will only reinforce this trend. Users will discover that the 70M-100M potential bandwidth of 4G networks provides reduced latency and better indoor coverage than past networks, leading to an "always connected" feeling. You'll want to harness that experience and incorporate it into your overall competitive telecom sourcing rather than let it get away from you.

And yet the conservative instinct of many, if not most, enterprises needs to be appropriately harnessed here as well. Right now there are two competing 4G technologies -- WiMax and LTE (for "Long Term Evolution"). WiMax is first to market, notably through the Sprint-backed Clearwire venture, which provides the CLEAR service in a number of U.S. markets. It's at least theoretically suited not just for mobility but as the long-dreamed-of potential for fixed wireless bypass around the ILEC last mile.

But LTE has projected speeds that exceed WiMax and has the backing of many more carriers, including the U.S. behemoths AT&T and Verizon. And the way that Verizon is positioning its new, more aggressive unlimited plan pricing as a way to upsell users to unlimited data suggests that it foresees a prompt rollout of 4G LTE as a "hook" to users, providing a go-everywhere broadband access method of choice.

So how do you decide which technology (or, potentially, a melding of both) to bank on? How do you deal with a notable concern about 4G, which is its relative lack of support for legacy voice and text-messaging (SMS), and the possible ways to resolve it? What will be the role of devices in these network services procurements compared to existing wireless deals? When do you go to market for 4G, and how much do you line up this procurement with your wireline enterprise network or existing wireless deals?

These are the kinds of questions I'll be addressing in a special session at the upcoming Mobile Explosion 2010 conference in San Diego on February 4-5. Organized by CCMI, Mobile Explosion is the popular annual wireless conference that distinguishes itself by being specifically for enterprise network professionals rather than for carriers, application developers and the like.

My session, called "Get Ready for Tomorrow's Wireless Networks Now!" will complement other sessions on mobile device management, mobile device security, real-world fixed-mobile convergence, wireless policies (especially for smartphones), and more. I encourage you to check out the full conference details.

The proper preparation and timing of procurements that incorporate 4G requirements and features is what the information in my session will be anticipating. It's a key subject, and I hope to see you in San Diego!

The true impact of Verizon and AT&T's new unlimited plan pricing

The following is a guest post by TC2 managing director Ben Fox, who is based in London.

On Friday Verizon Wireless announced that, starting tomorrow, it will be offering its suite of unlimited usage plans at $30 per month less than before. For example, Verizon's Nationwide Unlimited voice plan will now be available for $69.99 instead of $99.99, and its Nationwide Unlimited voice and text plan will now be available for $89.99 instead of $119.99. Just hours later, AT&T Mobility reduced its equivalent plans by the same amount in order to retain its pricing parity with Verizon Wireless' unlimited plans.

Such unlimited plans have made some limited penetration into large enterprise users, so this price reduction will have a small impact on the bottom line of big companies. But the more interesting question for now is what does this move from Verizon Wireless tell us about its broader pricing strategy? And what does this mean for enterprise customers rather than individual consumers?

The answer is that Verizon Wireless apparently intends to use the new, lower-priced plans to upsell customers to unlimited data plans. In fact, Verizon Wireless CEO Lowell McAdam has been quoted as saying that "this is about data in my view" and Verizon's pricing moves "will drive penetration of data services."

Of course, wireless carriers the world over have been presenting data usage revenues as their priority for many years, but it is interesting that Verizon Wireless appears to be publicly acknowledging that it is willing to cut its voice pricing in order to win more data business. And this is particularly important for enterprise customers to take note of -- for many large companies over half of their wireless lines are now voice and data converged devices, whether BlackBerry, Windows Mobile, iPhones or some other smartphone. Hence a strategy from Verizon Wireless of reducing its voice plan pricing in return for data revenue growth is particularly relevant for enterprise buyers who typically have high spend on wireless data services.

We certainly intend to leverage this in negotiations we are currently involved in with our clients. Over the past twelve months Verizon Wireless has been lagging behind its competition in enterprise deals, not least because of an unwillingness to be competitive on voice plans. We hope that Friday's announcement signals a change of heart from Verizon Wireless that will lead to increasingly competitive offers for enterprise customers, which would ultimately achieve Verizon Wireless' objective of increased data revenues because so many enterprise users have converged devices.

Despite Verizon Wireless' statements that "this is about data", it is notable that Verizon Wireless did not reduce any of the incremental costs of adding unlimited messaging and data to users' voice plans. In business settings, usage of messaging and data services is growing much faster than voice usage, but Friday's announcements from both Verizon Wireless and AT&T Mobility offered no changes to standard pricing for messaging and data add-ons.

There is also the question of whether or not the $30 reductions to the unlimited plans brings them down to a price point where it makes sense for enterprise customers to roll them out to a large proportion of end users. For now, except for companies with exceptionally high average usage levels, the answer would appear to be no. The lower price point does reduce the breakeven point between unlimited plans on the one hand and pooling and flat rate plans on the other, such that the unlimited plans will make sense for a somewhat larger number of end users. But most companies' average usage will still be considerably lower than this breakpoint.

One of the reasons for this is that the unlimited plans, from both Verizon Wireless and AT&T Mobility, do not benefit from the overall discount levels that enterprise customers negotiate, but pooling/shared plans do receive such discounts -- hence the discount raises the breakeven usage level at which unlimited plans cost in.

So fundamentally, this price decrease to unlimited plans does not yet get close to the holy grail of being able to put all users on a single unlimited plan and never again needing to think about which rate plan is most cost effective for which user. That means that rate plan optimization remains as important as ever. Kathy Buffalow, a wireless rate plan optimization specialist at eOnTheGo, notes that even where voice usage is reasonably well understood, there are huge cost optimization opportunities from examining messaging and data costs.

"Taking the costs of plans that bundle messaging and/or data usage and comparing them to messaging and data bolt-ons, plus determining which users should be provided with unlimited data and messaging features versus which users only need a lower cost limited usage messaging/data add-on, is no mean feat," Kathy points out. "Since none of Friday's announcements reduced the incremental cost of data and messaging bundles and add-ons, coupled with business users' continued growth in data and messaging usage, optimizing these costs remains as important as ever."

Friday's announcements may herald a new level of competitive aggression from Verizon Wireless, but only if the cuts we've detailed to the unlimited plans also filter through into Verizon Wireless being more competitive in other areas too. We'll be keeping you posted on what we see over the course of the next few months.

The war of the maps and end-user preferences

The next time you go out to bid for anything, I hope you can stir up a fight between AT&T and Verizon that's as good as the one they're having on television and in federal court right now.

Verizon is sticking it to AT&T in U.S. TV ads for lacking 3G wireless coverage. Here's Verizon's ad technique: Show big, white spaces around the USA on what Verizon says is an AT&T network map. A putatively outraged AT&T has gone to court to stop the ads, claiming that of course it has good wireless coverage throughout most of the country, and the average viewer doesn't realize Verizon means a more-advanced network exclusively relying on 3G technology.

Verizon says that AT&T just can't handle the truth, and the ads do clearly use the label 3G. But some analysts say that Verizon is pushing the edge of how it presents its claims because it still can't match the momentum of the iPhone. So far the court has declined to stop the ads, but the judge is continuing to hear the case, and meanwhile AT&T and Apple are putting up their own ads touting both coverage and unique capabilities as much as they can.

Finding telecom carriers in court is hardly a new phenomenon, but I think this contretemps has a much different feel than the old days when the "RBOCs" and the "long distance carriers" would slug it out before the judge. In my view, the war of the maps has the potential to benefit both Verizon and AT&T at the expense of everyone else, no matter how it turns out. That's because the highly publicized incident furthers the Coke-and-Pepsi-fication of the telecom industry, something that the budding duopolists have to realize beneath it all.

In marketing, choosing to attack another vendor by name without being prompted to do so is, in part, a subtle way of paying respect to them. Besides, both carriers are continuing to build their networks, and the long-term potential for leapfrogging each other in capabilities is in place.

On a customer-by-customer basis, obviously AT&T and Verizon are playing for keeps, and they mean it when they battle for each customer contract. But as considerations of end-user preference on both carriers and devices seep further into the realm of corporate telecom procurement, image and status threaten to create a two-tier system where corporate executives may be forced to consider only a diminishing slate of brand-name vendors for large group purchases.

If those brand names cite only each other -- everywhere from the point of sale to Super Bowl ads -- it could create a self-fulfilling prophecy whereby they split the lion's share of the business. And the fact that in large parts of the country, either AT&T or Verizon can bundle end-user telecom and media needs in a way that Sprint and T-Mobile (or anyone else) can't helps keep these brand names on end-users' lips.

Thankfully, we're not at the point yet where wireless competition has been reduced to an either-or. But in the broad strokes of the telecom industry's future, I'm willing to bet that Verizon has finely calculated what attacking AT&T in this way means, and AT&T understands the publicity it's gaining from a legal war with Verizon, no matter how plainly it seems to many people that Verizon's ads are technically clean. Keep an ear out for how your user base talks about telecom vendors, for surely they're talking about them more than ever before. Ultimately, that's part of what all this is all about.

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