Sprint Corp unveiled a new pricing plan that gives customers 20 gigabytes of data and up to 10 lines for $100, doubling its data offerings, the latest in a series of cuts and promotions that is re-shaping the wireless industry.
Sprint’s chairman, business tycoon Masayoshi Son, is betting new prices will revive a carrier hampered by an expensive network overhaul and rising competition.
“The message is simple: We are back in the game. We are going to offer most competitive value for American consumers,” Marcelo Claure, Sprint’s newly appointed chief executive told Reuters in an interview.
The company will release new plans for individuals later this week.
The announcement marks the first move for the new CEO, who last week said cutting prices would be his top priority.
The move comes after Verizon slashed prices for its unlimited talk and text plan and T-Mobile expanded its family plan to 6 lines and could signal more price cuts ahead for the industry as a whole.
Sprint is going it alone after scuttling a months-long effort to pursue a merger with No. 4 U.S. cellular provider T-Mobile US Inc.
Last year, an aggressive campaign by T-Mobile to address subscriber frustrations and lower prices sparked a domino effect that caused the U.S. top four carriers to restructure pricing plans and cut rates to lure customers in a nearly saturated market.
But analysts worry the industry’s latest discount spree could increase pressure on already tight margins and rattle dividends.
While top carriers and Verizon have largely been able to mitigate the impact of T-Mobile’s discounts on their subscriber base, they would likely have to respond to price cuts at Sprint with steep discounts of their own to keep subscribers from migrating, analysts said.
“We will see a trickle down in pricing concessions across the industry. This is the start of a price war many anticipated would be coming,” said Angelo Zino, analyst at S&P Capital IQ.
New pricing plans that charge customers separately for the cost of their devices have somewhat offset price cuts this year, Zino said, but if the discounts continue, they could pose a long-term threat to the dividends.
Sprint didn’t deny the report of Marcelo’s comments. A spokesman also confirmed Friday that Sprint is “focusing on providing the best value in the market.”
According to the account of Claure’s comments, he told workers, “We’re going to change our plans to make sure every customer in America thinks twice about signing up to a competitor.” The report, which first appeared in LightReading.com, also said that “very disruptive” rate plans are coming this week.
Sprint didn’t dispute Light Reading’s report, but a spokesman said Sprint is not commenting on “any potential pricing plans before they are announced.”
The spokesman, Doug Duvall, said Marcelo held his first all-employee town hall meeting before a standing-room-only crowd. He added: “He shared his passion for his family, work and soccer team and his commitment to leading Sprint. He discussed Sprint’s challenges and pledged to get Sprint ‘back in the game’ by focusing on providing the best value in the market, completing our network build and optimizing Sprint’s cost structure.”
By confirming Sprint wants to offer the “best value in the market,” it’s pretty clear that Sprint, the third-largest U.S. carrier, will soon wage a price war with the T-Mobile, the fourth-largest U.S. carrier that has quickly been gaining on Sprint.
Analysts recently said Sprint’s recent “Framily plan” isn’t competitive in the market, which former CEO Dan Hesse acknowledged in late July before his departure on Monday.
The Sprint Framily plans costs $160 a month for 4GB of data, but comes with overage charges and won’t allow tethering. Meanwhile, T-Mobile has a family plan offered through September that costs $100 a month for four lines and 10GB of data, although each line is limited to 2.5GB.
Hesse had earlier described subscriber plans Sprint was testing that have tiers of data and unlimited data.
According to Light Reading, Claure also told employees that price cuts are needed because Sprint’s network isn’t at the level of performance and reach that it should be. “When you have a great network, you don’t have to compete on price,” he reportedly said. “When your network is behind, unfortunately you have to compete on value and price.”
The U.S. Federal Communications Commission voted last week to require U.S. mobile carriers and many text-messaging apps to support functionality that allows texting emergency dispatch centers, even after questions about whether the centers will be ready by the deadline.
The commission’s vote requires U.S. mobile carriers and some texting apps to put emergency text-to-911 functionality in place by the end of the year.
Even though the nation’s four largest mobile carriers have all added text-to-911 functionality this year, less than 2 percent of the nation’s 6,800 emergency dispatch centers are ready to receive texts, said Commissioner Ajit Pai. The commission’s action will give smartphone users the impression they can send text to emergency responders, when many will not be able to, he said.
The FCC’s action “encourages the public to dive into text-to-911 functionality, when in reality, there’s hardly any water in the pool,” Pai said. “The order is sure to result in massive consumer confusion, and therefore will endanger, rather than advance, public safety.”
FCC Chairman Tom Wheeler applauded the largest mobile carriers — Verizon Wireless, AT&T, Sprint and T-Mobile USA — for adding text-to-911 functionality. The agency needs to push other carriers and emergency dispatch centers, called public-safety answering points or PSAPs, to do the same, he added.
“A lot of time of has passed since [the four largest] carriers stepped up and did something voluntarily, and the other carriers serving the consumers of America did not,” he said. “If you don’t step up to your responsibility, we will.”
Smartphone users should still call 911 if possible, but text-to-911 services need to be more widely available, Wheeler said.
The adoption of text-to-911 will let smartphone users contact police and other emergency responders when it’s not safe to talk on the phone, Wheeler said. It will also aid people with hearing or speech disabilities, he noted.
“Texting is now as important a function on a mobile device as talking,” Wheeler said. “Some of those text messages are cries for help.”
Sprint Corp has canceled its bid to purchase No. 4 U.S. carrier T-Mobile U.S. Inc after regulatory resistance showed no signs of softening despite months of lobbying, people familiar with the matter told Reuters.
The move is a rare setback for Sprint’s Japanese parent SoftBank Corp, whose billionaire founder Masayoshi Son had seen the acquisition as key to taking on U.S. market leaders AT&T Inc and Verizon Communications Inc.
Sprint, the No. 3 U.S. carrier, and T-Mobile have not ruled out consolidation in the future but concluded that a deal is unlikely to be approved at this time, the sources said. U.S. regulators have insisted that they want to keep the number of major wireless carriers at four.
“We didn’t think the opposition would be this strong,” a SoftBank executive said, but added: “The environment will definitely change”.
The failure to reach a deal could give added impetus to a rival bid for T-Mobile by French telecoms firm Iliad. Iliad made a lower bid than Sprint but is in talks with U.S. cable and satellite companies to sweeten its offer.
In the wake of the failed talks, Sprint will appoint a new CEO – Marcelo Claure, founder of mobile phone distributor Brightstar Corp which was acquired by SoftBank last year, a separate person with knowledge of the matter said. Claure, who has won a string of awards for entrepreneurship, joined Sprint’s board in January.
He will replace Dan Hesse who has been CEO of Sprint since 2007. Hesse led a rip-and-replace overhaul to modernize Sprint’s network but it caused cellular sites to go black and the company to hemorrhage subscribers.
Sources declined to be identified as the matter has not been disclosed by the companies publicly. Representatives for Sprint and SoftBank declined a request for comment. T-Mobile did not immediately respond to a request for comment.
The announcement of the deal, put together in May, comes as Netflix has been waging a public campaign against such fees, which they present as tolls, and calling on the Federal Communications Commission to review the market.
Having brokered this so-called interconnection agreement, AT&T and Netflix are now working to build out new network connections for Netflix content to be delivered directly to AT&T’s servers “to improve the viewing experience for our mutual subscribers,” the companies’ representatives said.
“We’re now beginning to turn up the connections, a process that should be complete in the coming days,” AT&T spokesman Michael Balmoris said.
This marks the third such agreement Netflix struck with major U.S. Internet service providers in recent months after it revealed similar traffic exchange agreements with Verizon Communications Inc in April and Comcast Corp in February.
Consumers have also complained to the FCC about an ongoing spat between Netflix and major Internet providers, saying they are experiencing slow download speeds for Netflix video.
Both sides accuse each other of causing a slowdown in Internet speeds by the way they route traffic.
Financial terms of such interconnection agreements are secret. The FCC last month moved to privately review the current deals, though did not indicate specific plans to regulate that part of the market.
The dominant search company was among 60 entities that attended a meeting on May 12 to discuss a project to replace or supplement as many as 10,000 pay phones around the city. The list came to light in a Bloomberg News article. Other participants included Samsung, IBM, Cisco Systems, Verizon Wireless, Cablevision and Time Warner Cable.
Responses to the “request for proposals” (RFP) from vendors were due Monday. Google, or any other participant in the May 12 meeting, may have pulled out of the process before filing one. Google did not immediately respond to a request for comment.
But it seems likely the company will at least submit a plan, given the opportunity to blanket much of New York’s streetscape with Wi-Fi. Despite some false starts and headaches in free public Wi-Fi in the past, Google looks more serious than ever about providing new forms of Internet access. It’s selling gigabit-speed service via fiber in Provo, Utah, and Kansas City, and plans to expand that service to Austin, Texas. A Google request for information sent to 34 other prospective Google Fiber cities suggested the company is looking at adding a Wi-Fi component to that service, too. Far outside major cities, its balloon-based Project Loon is being tested in licensed frequencies sometimes used for LTE cellular networks.
The New York project would be vast and potentially lucrative, as well as high profile. There are currently more than 7,000 pay-phone sites spread across all five boroughs of the city, and about 4,000 of them carry advertising on the sides. The winning bidder for the upgrade project would share ad revenue with the city, which says it would pay them at least US$17.5 million in compensation.
There is a spat brewing between Apple and its long term supplier Sharp. Sharp has been making Apple displays for ages and has an entire plant dedicated to this purpose. The manufacturing gear now belongs to Apple and Sharp wants to buy the equipment back for $293 million.
Apparently, Sharp wants to diversify its production and shift away from supplying only to Apple. Jobs’ Mob is amenable to the idea of selling the facilities but only if Sharp never sells anything to Samsung. Samsung mostly utilizes OLED screens in most of its products, so there is little for Apple to worry about. However some devices still use LCD screens and might have Sharp gear under the bonnet.
An agreement has not yet been reached and it seems unlikely as the manufacturer is not keen on accepting the blatant anti-competitive behaviour or as Apple would say “shrewed negotiation ability.”
Sharp does not want to piss off Apple. It is busy producing iPhone 6 screens for Apple and the Kameyama Plant No. 1 which is the one that Sharp wants to buy back, flat out.
Verizon ranked first or was tied for first in 115 of 125 cities for overall network performance during the first half of 2014, leading all three other national carriers — AT&T, Sprint and T-Mobile.
Sprint didn’t finish first in any of the cities, while Verizon tied with either AT&T or T-Mobile, or both, in 56. That meant that AT&T was the only first place finisher in 59 cities, including major cities such as Cincinnati, Colorado Springs, Colo., Daytona Beach, Fla., Detroit, Los Angeles, Miami, Minneapolis, Nashville, Salt Lake City, San Antonio and Seattle.
RootMetrics found that Verizon finished first in 23 of 50 airport network evaluations for the first half of the year and tied for first in seven out of 50 airports. Verizon won or tied at four major airports: Atlanta, Chicago, Los Angeles and Denver.
Verizon has its 4G LTE network in 500 U.S. cities, providing access to 97% of the U.S. population. RootMetrics used devices capable of connecting to Verizon’s XLTE network, now operating in 300 cities.
XLTE uses AWS spectrum.
RootMetrics is an independent research company that uses testers driving in cars and in stationary locations, both indoors and outdoors, to conduct thousands of tests in each city to evaluate reliability and speed of connections and call, data and text performance. The company uses unmodified smartphones purchased off-the-shelf from operator stores.
The most successful wearable devices will be ones that can operate without a phone, and AT&T will have at least one of them by the end of this year, the man who manages the carrier’s partnerships said.
“It needs to be an independent device. It needs to do something different for the end user, for people to buy it en masse,” said Glenn Lurie, AT&T’s president of emerging enterprises and partnerships.
A likely place to start could be wearables for wellness, such as a device that knows when your workout’s begun, holds your music, and lets you post information about your performance to social networks, he said. “I think you’ll see devices like that this year,” Lurie said.
The hottest devices will be able to work both on their own and with a phone, Lurie said. They’ll also have to be simple to use, a bar that no wearable has crossed yet, he said.
Once wearables start talking to LTE on their own, the sky’s the limit of what consumers will take with them, Lurie said. “Just like tablets, it’s going to all of a sudden explode.”
Cars will be another hot category of connected devices, with natural-language commands letting drivers do many things, he said.
“We believe technology in a car can make the car not only a safer place, but a place where you can do everything you can do today with your smartphone in your hand,” Lurie said. But there are hurdles left to be crossed: Cars will need to be able to talk to both Android and iOS phones without those phones coming out of the driver’s pocket. And as cars age through several generations of mobile technology, their software will have to be upgradable over the air. “The car is going to become a smartphone with four wheels.”
Lurie has overseen AT&T’s new businesses and partnerships for years, going back to the carrier’s blockbuster deal to carry the Apple iPhone exclusively for five years. Speaking before the audience at the MobileBeat conference in San Francisco on Tuesday, he wasn’t giving away any secrets about what manufacturers are showing off to AT&T.
“The things I’m seeing are pretty darn exciting,” Lurie said.
The U.S. government made approximately 150,000 requests for customer information from Verizon Communications in the first half of 2014, most of them subpoenas, the country’s largest wireless carrier has reported.
The report is the second summary of government requests Verizon has publicly issued since shareholders pressured the company to divulge information it shared with the government in December.
The government issued 72,342 subpoenas, half of which request subscriber information on a given phone number or IP address, while others ask for transactional information, like the phone numbers a customer has called, according to Verizon.
Verizon also received over 37,000 court orders, including 714 wiretaps, which give access to the content of communications and over 3,000 pen registers and trap and trace orders, which give the government real-time access to outgoing and incoming phone numbers, respectively.
“We repeat our call for governments around the world to make public the number of demands they make for customer data from telecom and Internet companies,” Randal Milch, Verizon’s general counsel, wrote in a company blog.
The report included limited information on international requests. France led all foreign countries listed in the report in customer information point requests, which include phone numbers or IP addresses used to identify a customer, with 762 requests.
Verizon Communications Inc unit Verizon Wireless is in hot pursuit of satellite-TV operator Dish Network Corp’s spectrum to improve wireless internet speeds, the New York Post reported, citing sources familiar with the matter.
The two companies have held informal, early talks about the spectrum, the report said.
In May, Verizon Communications Chief Executive Lowell McAdam shot down rumors that the company was in potential merger talks with Dish.
Federal Communications Commission Chairman Tom Wheeler has proposed restrictions on how much the biggest wireless carriers can bid for in a major auction of TV spectrum scheduled for mid-2015.
A possible merger between Sprint Corp and T-Mobile US Inc could prompt U.S. regulators to rewrite rules they are now considering for the auction.
The commitment comes at a time when new data shows a dramatic drop in theft of Apple iPhones and iPads after the September 2013 introduction of iOS 7, which included a kill-switch function that allows stolen devices to be remotely locked and deleted so they become useless.
In New York, iPhone theft was down 19 percent in the first five months of this year, which is almost double the 10 percent drop in overall robberies seen in the city. Over the same period, thefts of Samsung devices — which did not include a kill switch until one was introduced on Verizon-only models in April — rose by over 40 percent.
In San Francisco, robberies of iPhones were 38 percent lower in the six months after the iOS 7 introduction versus the six months before, while in London thefts over the same period were down by 24 percent. In both cities, robberies of Samsung devices increased.
“These statistics validate what we always knew to be true, that a technological solution has the potential to end the victimization of wireless consumers everywhere,” San Francisco District Attorney George Gascon told IDG News Service.
Gascon and New York State Attorney General Eric Schneiderman have been leading a push to get smartphone vendors and telecom carriers to include kill switches in their products as a way to curb phone theft.
The joint work had early success with Apple but other carriers and phone makers dragged their feet. However, resistance to the idea appears to be dropping as several bills that mandate kill switches make their way through state legislatures and the U.S. Congress.
The bills demand a function that would enable a phone owner to remotely delete and disable a phone if stolen. The function could be disabled by consumers before a theft takes place if desired, but crucially new handsets would be supplied with it switched on by default.
T-Mobile US Inc said it’s offering at least a million mobile phone users the chance to use an Apple Inc iPhone in a free one-week trial of the No. 4 U.S. wireless carrier’s network with unlimited access.
The announcement is the latest promotion from T-Mobile, which last year shook up the industry by unbundling service fees from device costs, a move other carriers soon followed.
In cooperation with device maker Apple, customers can sign up online, receive a free iPhone 5s in two days and pay no charges unless the phone is broken or not returned at aretail store one week later.
“We believe every Verizon, and every AT&T customer should cheat on their carrier and enjoy every minute of it,” said T-Mobile CEO John Legere, speaking at a T-Mobile event in Seattle that was broadcast on the Internet. The carrier’s “seven-night stand” campaign asks consumers to allow the company to “woo you with our powerful data strong network” for the week.
T-Mobile’s aggressive discounting won it more subscribers in the first quarter of 2014 than any of the top wireless carriers combined. But the company’s price slashing cost it $151 million in lost revenue in the first quarter.
The company also said on Wednesday that music streaming from eight major music providers, including Pandora and Spotify, will no longer count against the data allowance included in consumers’ subscriptions.
“Streaming music is a showcase of what makes our network different. We can handle it,” said T-Mobile Chief Marketing Officer Mike Sievert.
T-Mobile customers use 69 percent more data than Verizon, and 100 percent more data than AT&T, according to the company.
The company also launched a music streaming service called ‘unRadio’, in partnership with music provider Rhapsody, which is free of advertising and will be included for customers who have unlimited high speed service. The service will also be available for $4 a month to all other subscribers.
The move follows a January AT&T announcement of a discounted subscription to Beats Music for family plan members, and a similar partnership between Sprint and Spotify in April.
T-Mobile’s massive price discounts have led to a restructuring of pricing plans across the wireless industry, as carriers unbundled service plans from the cost of devices.
Vodafone is acquiring an Italian car electronics maker for 145 million euros ($197 million), hoping to leap ahead in the race to connect more products to the internet and offset slowing growth in its core mobile phone business.
Telecoms and technology firms are looking to tap an expected surge in demand for so-called machine-to-machine (M2M) communications – or using the internet to get products from cars and washing machines to turbines and medical equipment to carry out more tasks, more efficiently.
Cars are at the forefront of the new industry, as manufacturers strive to add new features such as streaming music, playing audio books, navigation aids and security improvements to their vehicles.
Only about 10 percent of vehicles currently have built-in connectivity to the internet, but that number is expected to rise to more than 90 percent by 2020, according to British consulting firm Machina Research.
Vodafone said on Monday it had agreed to buy Cobra Automotive Technologies, which provides products aimed at improving car security, telecommunications and vehicle tracking for the automotive and insurance industries.
“The combination of Vodafone and Cobra will create a new global provider of connected car services,” said Erik Brenneis, Director of M2M at Vodafone.
“We plan to invest in the business to offer our automotive and insurance customers a full range of telematics services.”
Other mobile operators are also investing in the M2M industry – also known as “the internet of things” – looking for new sources of income as stiff competition and regulation slow growth in their core market.
For example, Verizon Communications, the largest U.S. wireless carrier, spent $612 million in cash in 2012 to buy Hughes Telematics, which sells products including GPS tracking, communications and safety features in cars.
U.S. regulators will review agreements between Netflix, Verizon, Comcast and other content and Internet providers to determine whether they are causing slow web download speeds for some consumers, especially for streaming video content.
Consumers have complained to the Federal Communications Commission about the ongoing spat between Netflix and Internet service providers (ISPs). Both sides accuse each other of causing a slowdown in Internet speeds by the way they route traffic.
“At the heart of this is whether ISPs that provide connectivity in the final mile to the home can advantage or disadvantage content providers, and therefore advantage or disadvantage consumers,” FCC Chairman Tom Wheeler said on Friday.
Large content providers such as Netflix Inc have historically paid middlemen or ISPs to deliver their content to consumers. The specifics of such agreements, known as “interconnection” and sometimes “peering,” have been secret and outside of the FCC’s regulatory scope.
The FCC earlier this year launched a new effort to set rules regulating how broadband providers manage Internet traffic on their networks. Netflix has urged the agency to begin regulating such agreements to do away with fees that content companies pay.
Though the FCC has not indicated that it plans to regulate the deals, the agency is now asking multiple Internet service providers and content companies, particularly video service providers, to provide details, Wheeler said.
“Consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for,” he told reporters after a monthly FCC meeting.
“What we are doing right now is collecting information, not regulating. We are looking under the hood. Consumers want transparency. They want answers. And so do I,” he said.
In an earlier statement Wheeler said the commission is “not suggesting that any company is at fault.”
Consumer advocates, who support stricter regulatory oversight of relationships between content and Internet providers, welcomed the step and called on the FCC to make details of those agreements public.
It is unclear whether the FCC plans to do so.
Analysts pegged the FCC’s move as a win for Netflix, which on Friday welcomed the move toward more transparency.
“Americans deserve to get the speed and quality of Internet access they pay for,” Netflix spokesman Joris Evers said in a statement.
Netflix earlier this year agreed to pay fees to Verizon Communications and Comcast to bypass middlemen and deliver content directly to the companies’ subscribers, ensuring faster speeds.
“Netflix has been paying (for traffic delivery) since inception. It wants free, I get it, but someone has to pay for it,” Jim Cicconi, AT&T Inc senior executive vice president for external and legislative affairs, said last week.
Netflix streaming accounts for nearly one-third of North American web traffic during peak times, according to research by Sandvine Corp.
Netflix vice president for global public policy, Christopher Libertelli, this week said the company already invests money in delivering traffic to the Internet provider.
“We pay a lot of money to drop content at the doorstep of an ISP. All we’re really asking is for the ISPs to swing the door open,” Libertelli said at the Aspen Institute think tank. “This has become a new choke point.”