AT&T has launched a new $60-a-month unlimited talk and text plan. AT&T's "Unlimited Talk and Text" plan for GoPhone is available October 12, 2009 and offers unlimited nationwide calling and unlimited texting to anyone in the United States, plus texting to Mexico, Canada and more than 100 other countries worldwide, for an additional fee.
“We recognize GoPhone customers have a need for unlimited calling or texting without the commitment of an annual contract,” says Judy Cavalieri, vice president of Prepaid Products for AT&T Mobility and Consumer Markets.
The prepaid offer comes without contract, and can be paid for completely "as you go" or as a monthly rate plan, without a contract, credit check or deposit.
The offer is evidence of a new level of competiton in the wireless prepaid business, which now is starting to compete more directly with postpaid offers. Handset limitations are emerging as the key difference between postpaid and prepaid offers, to an extent, not usage charges or even form of payment.
Wednesday, March 3, 2010
Which User Segments are Most Likely to Switch to Prepaid?
Prepaid wireless has been on a tear of late, growing to 55 million U.S. users and about 17 percent of all U.S. wireless accounts in service. And though prepaid traditionally has been centered on "banking challenged," "low income" or "youth" market segments, that is starting to change as consumers from a wider range of segments seem to be opting for
Often thought of as a "consumer" option, one also has to wonder whether at least some business users might consider switching to prepaid, for at least some employee segments.
That, at least, is what Compass Intelligence thinks could be happening at smaller firms, for example. A recent change that could be driving such interest are new "unlimited" talk and texting plans from firms such as AT&T.
In a recent survey, Compass Intelligence found that a high percentage of respondents indicate plans to give new prepaid devices to one or more employees.
Another segment Compass Intelligence found was interested in prepaid plans are "larger families." The larger the family, the more mobiles they currently use and the more likely they will replace postpaid wireless devices with prepaid options, Compass Intelligence says.
Users with multiple mobile devices also are more likely to indicate they plan to replace a postpaid wireless account with a prepaid option as compared to other segments.
About 11 percent of the respondents with three or more mobiles are willing to replace one or more of their postpaid mobiles with prepaid, while only three percent of the respondents with only one mobile device indicated plans to do so.
When adding a new device, 22 percent of respondents indicate they will add prepaid mobile.
The apparent relationship between prepaid demand and family size and number of devices is likely the result of U.S. consumers and businesses seeing wireless devices as "nice-to-have" items that are useful for more members of families and employees, along with the ability to limit financial exposure.
One of the advantages of prepaid service is that it can be terminated easily, allowing parents and business managers to quickly cut back on such service if necessary.
Often thought of as a "consumer" option, one also has to wonder whether at least some business users might consider switching to prepaid, for at least some employee segments.
That, at least, is what Compass Intelligence thinks could be happening at smaller firms, for example. A recent change that could be driving such interest are new "unlimited" talk and texting plans from firms such as AT&T.
In a recent survey, Compass Intelligence found that a high percentage of respondents indicate plans to give new prepaid devices to one or more employees.
Another segment Compass Intelligence found was interested in prepaid plans are "larger families." The larger the family, the more mobiles they currently use and the more likely they will replace postpaid wireless devices with prepaid options, Compass Intelligence says.
Users with multiple mobile devices also are more likely to indicate they plan to replace a postpaid wireless account with a prepaid option as compared to other segments.
About 11 percent of the respondents with three or more mobiles are willing to replace one or more of their postpaid mobiles with prepaid, while only three percent of the respondents with only one mobile device indicated plans to do so.
When adding a new device, 22 percent of respondents indicate they will add prepaid mobile.
The apparent relationship between prepaid demand and family size and number of devices is likely the result of U.S. consumers and businesses seeing wireless devices as "nice-to-have" items that are useful for more members of families and employees, along with the ability to limit financial exposure.
One of the advantages of prepaid service is that it can be terminated easily, allowing parents and business managers to quickly cut back on such service if necessary.
Mobile ARPU Illustrates Service Provider Issues
U.S. mobile service provider average revenue per user decreased by $0.45 over the last year, says analyst Chetan Sharma.
Average voice ARPU declined by $0.98 while the average data ARPU grew by $0.53.
Therein lies the problem: mobile service providers are growing data revenues, but losing voice revenue faster than they are able to replace the lost revenues.
That isn't to say they will not ultimately succeed in replacing the lion's share of lost voice revenue. But few executives likely believe the substitution will be one-for-one, or greater, at least in terms of broadband access replacing core voice revenues.
Average voice ARPU declined by $0.98 while the average data ARPU grew by $0.53.
Therein lies the problem: mobile service providers are growing data revenues, but losing voice revenue faster than they are able to replace the lost revenues.
That isn't to say they will not ultimately succeed in replacing the lion's share of lost voice revenue. But few executives likely believe the substitution will be one-for-one, or greater, at least in terms of broadband access replacing core voice revenues.
What Kinds of Online Content Will Consumers Pay For?
Consumer willingness to pay for online content seems to be shaped by their current experience with existing media.
Online content for which consumers are most likely to pay—or have already paid—are those they normally pay for offline, including theatrical movies, music, games and select videos such as current television shows, a new survey by Nielsen suggests.
Content users might pay for tends to be professionally produced, at comparatively high costs, and definitely not user-generated content, including social community content, podcasts, consumer-generated videos and blogs.
Respondents had mixed willingness to pay for newspaper, magazine, Internet-only news and radio news and talk shows that are created by professionals, relatively expensive to produce and commonly sold offline.
After surveying 27,000 consumers in 52 countries, Nielsen also found 85 percent prefer that existing free content remains free.
Whatever their preferences, consumers worldwide generally agree that online content will have to meet certain criteria before they shell out money to access it. If respondents already pay for a product in physical form, 78 percent believe they should be able to use online versions of the same content at no additional charge.
At the same time, 71 percent of global consumers say online content of any kind will have to be considerably better than what is currently available free before they will pay for it.
About 79 percent say they would no longer use a Web site that charges them, presuming they can find the same information at no cost.
Only 43 percent of respondents say an easy payment method would make them more likely to buy content online.
About 47 percent of respondents say they are willing to accept more advertising to subsidize free content. Some 64 percent say that if they must pay for content online, there should be no ads.
Only 43 percent of respondents say an easy payment method would make them more likely to buy content online.
About 47 percent of respondents say they are willing to accept more advertising to subsidize free content. Some 64 percent say that if they must pay for content online, there should be no ads.
More than 50 million Tweets every day
Twitter now has reached 50 million tweets a day, excluding all spam, says Twitter analytics staffer Kevin Weil.
Folks were tweeting 5,000 times a day in 2007. By 2008, that number was 300,000, and by 2009 it had grown to 2.5 million per day, he says. Tweets grew 1,400 percent last year to 35 million per day. "Today, we are seeing 50 million tweets per day—that's an average of 600 tweets per second," says Weil.
Tweet deliveries are a much higher number because once created, tweets must be delivered to multiple followers. Then there's search and so many other ways to measure and understand growth across this information network. Tweets per day is just one number to think about, he says.
Still, as with Skype's "concurrent users" metrics, it is a milestone.
Internet Users are Unique, Treat Them That Way
As this chart suggests, there are distinct Internet end user segments, some of which only require moderate bandwidth, others which require more bandwidth, better latency performance and more upstream bandwidth, if not symmetrical bandwidth.
The issue for any facilities-based service provider is that the whole network has to be built to accommodate the most advanced users, even if much, or most, of the demand is from less-demanding users.
Still, given that such investment must be made, there is increasing room to personalize and tailor broadband access and applications to individual users who actually behave in unique ways.
Though the concern expressed by many supporters of strong forms of network neutrality rightly is focused on protecting legal applications from anti-competitive behavior, there clearly are other values that conflict with the proposed solution for discrimination, which is that no bits, from any providers, can be prioritized.
In fact, prioritizing bits represents a primary tool for personalizing end user services and applications so that those favored applications are optimized for each user. Surely there are ways to ensure non-discrimination without precluding the creation of personalized services that benefit from end-user specified preferences.
The issue for any facilities-based service provider is that the whole network has to be built to accommodate the most advanced users, even if much, or most, of the demand is from less-demanding users.
Still, given that such investment must be made, there is increasing room to personalize and tailor broadband access and applications to individual users who actually behave in unique ways.
Though the concern expressed by many supporters of strong forms of network neutrality rightly is focused on protecting legal applications from anti-competitive behavior, there clearly are other values that conflict with the proposed solution for discrimination, which is that no bits, from any providers, can be prioritized.
In fact, prioritizing bits represents a primary tool for personalizing end user services and applications so that those favored applications are optimized for each user. Surely there are ways to ensure non-discrimination without precluding the creation of personalized services that benefit from end-user specified preferences.
How to compete against the big guys
Many of the big web hosting companies have a reputation for being invulnerable, but in fact it’s very possible to compete against the Yahoos and 1&1s and still win.
The key to be successful is to remember that these big companies are not a one-unit business, but rather are made up of many business units (Yahoo: Search engine, web directory, web hosting, email, advertising and, and, and). Some of those business units are highly effective, others are more vulnerable to competition.
Let’s take Microsoft as an example: One company that successfully competes against Microsoft is Logitech, which competes by focusing on technology that Microsoft doesn’t consider strategic: computer accessories
The situation of Logitech: Staying focused Microsoft is a software and tools company, but it also used to dominate the mouse and keyboard market. Microsoft then started producing gaming equipment, such as joysticks, and steering wheels. It even sold speakers. It made great products but it did not become market leader in these areas and never made the final push against the competition like it did with Netscape.
Microsoft pulled back into the mice and keyboard markets after becoming to wide-spread and after becoming not focused enough. Logitech continued to offer a broader range of products which could be combined with each other in retail packages (wireless mouse and keyboard). While Microsoft continued to build quality products, Logitech started dominating this segment with a broad line of accessories including mice, keyboards, cameras, and speakers – all of great quality.
Logitech could grow to become market leader because they don’t go around pointing out that they are beating the crap out of Microsoft. Executives often want to brag about beating the crap out of Microsoft, but it only motivates Microsoft to want to squash the competition. They stayed silent in the background and concentrated on making great products and to market those. Logitech also stays very focused. Microsoft has to watch markets that are much more strategic than peripheral hardware, but Logitech can fully concentrate onto this one segment of the market.
This is one of the best ways to go after a dominant company: find the areas where the giant isn’t focused enough, and quietly slip from behind in and start taking market share. Inside the big and dominant company, the business unit you compete with will see declining revenues over time. It’s not a large decline in a short period. Employees won’t want to take jobs in that business unit–and, once there, they’ll either be treading water or looking to get out. Once the sleeping giant realizes that you have taken over a large share of that specific market it might start acting against you, but if you play your cards right you have a great position to fight back and to keep your share of the market. Or the sleeping giant just stays where it is and holds on to the market share that it has – no retreat but also no attack. It depends on how important that market share is in the strategic planning. The 3rd option might be that the giant gives up this market segment and concentrates on its strategic important products. Example: Microsoft stopped offering broadband products like wireless routers not too long ago. It had a great product but the competition did not had to concentrate that much on other products and was (is) more focused.
Following the tactics Microsoft used 10-15 years ago, Logitech has been able to establish itself as a market leader in the accessories segment. Job well done.
Large competitors often have two big weaknesses. 1) They often have an image problem, which they refuse to even acknowledge. As a result – the leaders and upper management lose contact to their normal customers. Hereby forgetting that this is often the customer segment that made them big.
2) Large businesses also toss people into jobs without properly matching skills and position. Like many big companies, they have executives leading core units who took the job without formal training. People get the title of a CEO, and they start acting as if that instantly makes them an super manager, when in fact they simply don’t know what they are doing. This can be a real problem for a business – especially during times of extensive growth. The web hosting industry has many folks employed that have great technical knowledge but when it comes down to having proper business skills the business hits a big bump.
Large companies are very vulnerable to competition from a small, but smart company that goes after a certain market segment. Strategies for successful competition against large hosting web hosting businesses include finding a market that they consider non-strategic, and you can even partnering with the competition in areas where the companies don’t compete. You can play against the giant without getting crushed.
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