Archive for January, 2008

January 23rd, 2008

Finally! AT&T delivers a premium broadband speed tier via U-verse

I have a “guest blog” from my colleague Doug Williams our Broadband analyst on AT&T’s announcement today on U-verse.

AT&T has finally introduced a broadband speed tier that makes use of the VDSL2 network architecture used to deliver the company’s U-verse TV and Internet access services. AT&T is now offering a 10Mbps down/1.5 Mbps up U-verse broadband product to customers who bundle it with U-verse TV, for $55 per month.

It’s about time. When AT&T first rolled out its U-verse service offering, I was surprised that the broadband service came in the same flavors as AT&T’s DSL service offering. (Clients can review a case study of AT&T’s prior U-verse broadband offering here, which was attached to a report on consumer broadband service provider selection, available here.) By tying its undifferentiated U-verse broadband offering to the U-verse TV services, AT&T clearly expected uptake to be driven by the new TV service. Now that the 10/1.5 broadband service is available, consumers that value a fast Internet connection over all else when considering a bundle may give U-verse another look. I’m a bit surprised that the price point isn’t a bit lower. Look for more competitive bundled pricing in the future, particularly if early uptake lags corporate expectations.

In addition to the faster connection speed, I’m equally pleased that AT&T has dubbed the new service “AT&T Yahoo! High-Speed Internet Max.”

It’s no FiOS, but at least you can see a nickname in there. (Hint: it’s “AT&T Max.”) What is the shorthand for “AT&T Yahoo! High-Speed Internet U-verse Enabled,” anyway?

P.S., Thank you to Julie for sharing space on her blog. My own blog should be up and running soon, so look for it next time you visit Jupiter’s Analyst Weblogs page.

January 22nd, 2008

Services or Access? What sells? And who Pays?

I saw this press release from the NY Times and AT&T Wireless today. It’s an interesting business model that we discuss a lot in our research. Will people pay for plain old access for their cell phones as they do for their homes? or will access be bundled with services? or will it be ad-supported? or some combination of the three? And certainly there could be other models beyond consumer pays or advertiser pays. We saw Apple make the announcement a few months ago with free access to iTunes in Starbucks. Gives consumers a lot of new possibilities to load up on content outside their homes. This one lets AT&T customers access NY Times content – presumably without a data access subscription. I don’t see this evolving long term at such a piecemeal rate with each web/media property deciding one-by-one to subsidize access to grow their audience numbers to appeal more to advertisers. Yes, iTunes isn’t about advertising, but they are selling music and promoting Starbucks music. As more capacity is added into the networks, it becomes less of a scarce resource, but it’s hard to imagine advertising revenue alone paying for access. Will be interesting to watch where this heads.

January 17th, 2008

Ordering Pizza on the Phone – What’s the big deal?

We’ve been using our phones to order pizzas for years. I am old enough to remember when “pizza delivery” was a big deal, but not when ordering it on the phone was novel. I still do this the old-fashioned way with my cell phone. I use Google SMS to get the phone number. I click on the number in the text message, wait on hold for five minutes, and then spend what seems like 10 minutes providing all of the relevant information it takes to order pizza on the phone.

Pizza Hut has taken ordering pizza on a phone to the next level, and I actually DO think it’s a big deal. (see CNET article) It suits their target demographic. It’s one of categories of products and services for which consumers are willing to receive special offers on their cell phones. The article stated that 20 percent of orders are already placed online so the infrastructure was in place to extend it to mobile.

They’ve done many other things well with the execution:

  • Information about the service is on the front page of their home web site
  • They’ve given it a cool name: “Total Mobile Access”
  • They leverage their web site for account set up and maintenance
  • Education – not only do they explain the differences between using text messaging and their mobile web site, but also they walk you through the steps one by one
  • They have a partially branded short code. They have a 6 digit short code with “hut” being the last three digits. I can only assumed they explored lots of possibilities before settling with that one. “Pizza” must have been taken.
January 16th, 2008

How does one send 200 SMS each day? (Philippines)

I just spent a couple of weeks with a family in the Philippines. There were two teenagers – a sixteen year old and a fourteen year old. The sixteen year old is in college (common age to start college in the Philippines) and lives away from home. The fourteen year old is in a technical high school near Manila. Both are girls. The fourteen year old seldom uses her phone while the sixteen year old becomes visibly agitated if she’s not holding her phone or can’t get to her messages constantly. The sixteen year old told me she sent more than 200 messages per day. I was amazed and wondered how it could be possible … until I spent a couple of days with her. I don’t have a teenager at home so this was novel experience for me.

First, she can tap in messages quite quickly. She uses a Nokia phone. She had another (not to be named brand) for a while, but gave it up because she couldn’t tap out letters fast enough. She texts at the dinner table, while in the car, while talking to you, while walking, etc. – you get the idea. I was using a computer in a room where she was sleeping one morning – she even txt’ed in her sleep. She claimed that she sleeps with her cell phone on her pillow/in bed next to her because she uses it as an alarm. I didn’t hear an alarm though. Several times though, I did observe her wake up, send a text message, and then rollover and go back to sleep. I couldn’t believe it.

Teenager with Phone on Pillow


Teenager – Close-up


SMS messages are inexpensive in the Philippines, but not cheap. It seemed to be 50 cents or so for unlimited text messaging for 24 hours. There were also packages for multiple days. It can be less expensive here. Many hourly workers earn as little as US$5/day – I still saw them with cell phones though perhaps not using as many text messages as these teenagers. I was told that rates were going up at the end of January, but that didn’t worry this teenager. She said the telecom companies make that announcement each year. They make the change, but quickly revert back to the lower prices.

SMS Offer

SMART Text Rates.jpg

January 15th, 2008

Apple’s Webclips

Lots announced at Apple today. iPhone has some software updates. One of the new features I like is the Web Clips. You could argue that they are simply bookmarks with a graphical link on the home page, but they do more. Moreover, you can sort your icons (applications and web pages) into nine different sets – basically personalizing the navigation on your phone.

We wrote about the importance of letting cell phone users choose the content most important to them in a piece we wrote last year. Much of our consumer feedback on information services points to the fact that a better experience is required to drive adoption.

Admob began publishing data a few months ago in regard to where they are publishing ads. Their data provides supporting evidence that ties the quality of the experience to page views. Impressions published on the iPhone are growing month-over-month with their share of impressions far exceeding their actual market share of cell phones.

January 11th, 2008

Philippines Wireless Services – Mastering Low Cost Distribution

I’m just back from a couple weeks in the Philippines. Even though I was on vacation, it’s hard to stop thinking about cell phones and service when you’re surrounded by advertisements. Ten to fifteen years ago when I would travel abroad, it seemed as though only Coca Cola was advertising everywhere – by everywhere, I mean billboards, airports, train stations, sides of buildings, etc. Now it seems to be telecom companies.

In places such as Africa, they even serve as the only paint on some buildings. See this blog for photos.

The last numbers I saw for ARPU for cell phones in the Philippines was under US$10/month. Some carriers here would likely wonder how one generates margins with such low revenue numbers, but as the carriers there know, you need to cut your cost structure to match the revenue. One of the ways they cut cost is in distribution of SIM cards and the processing of “reloading them.”

As you may or may not know about the Philippines, they mostly send text messages. One of the many reasons – and probably the primary reason – is because it is relatively inexpensive. So, in order to be able to communicate with folks there, I needed to get a Filipino SIM card.

I purchased my SIM card with 50 text messages at this shop below.


The young woman opened up the small package with the SIM. She popped my new SIM card into her phone and within about 60 seconds it was activated. The $3 (approximate) fee came with 50 text messages. No additional activation fees. No paperwork required. The folks with whom I was staying primarily used SMS rather than voice so it was perfect.

Needless to say, these shops were everywhere. I did not once see a dedicated phone shop from one of the carriers. It’s possible that they existed, but I didn’t see one – an indication that even if they do have shops, they aren’t as prevalent as they are here in the States or in Europe. I did see phone shops though with not only Nokias, but also the latest from Motorola.