TIME Mobile

T-Mobile to Pay $90 Million to Settle Cramming Case

T-Mobile
An employee sets up a new Samsung Electronics Co. Galaxy 3 smartphone for a customer at a T-Mobile US Inc. retail store in Torrance, California, U.S., on Monday, Nov. 4, 2013. Bloomberg—Bloomberg via Getty Images

Wireless carrier had originally called FTC lawsuit "unfounded"

T-Mobile has agreed to pay at least $67.5 million in customer refunds to settle claims that its customers were the victims of cramming, the Federal Trade Commission said Friday. Cramming is a once-common tactic in the telecom industry through which third parties hide unwanted charges for things like horoscopes and love tips in customers’ wireless bills.

In addition to the refunds, T-Mobile will pay $18 million in fines and penalties to attorneys general in every state and Washington D.C., as well as a $4.5 million fine to the Federal Communications Commission.

“Mobile cramming is an issue that has affected millions of American consumers,” FTC Chairwoman Edith Ramirez said in a statement. “Consumers should be able to trust that their mobile phone bills reflect the charges they authorized and nothing more.”

The FTC originally filed a lawsuit against T-Mobile over cramming claims in July. At the time, T-Mobile CEO John Legere, who has staked the company’s reputation on being more fair to customers than rival wireless carriers, called the allegations “unfounded and without merit.” T-Mobile did not immediately respond to a request for comment Friday.

T-Mobile will be required to contact all current and former customers who had unwanted charges crammed into their bills and offer them refunds. The company will also have to get customers’ consent before putting third-party charges on their bills in the future.

The T-Mobile case is the latest in a series of cramming settlements that the FTC has brokered. AT&T agreed to pay $105 million in refunds and fines for cramming charges in October.

TIME cell phones

Researchers Find Flaws That Means Anyone Can Listen to Your Cell Phone Calls

Flaws found in global cell network means spies can hack your phone

Security flaws discovered by German researchers could allow hackers to listen in on private phone calls and intercept text messages en masse, the Washington Post reports.

The weaknesses in the global cellular network are to be reported at a hacker conference in Hamburg this month, by Tobias Engel, founder of Sternraute, and Karsten Nohl, chief scientist for Security Research Labs.

The Post reports that these experts believe that SS7, the global network that allows cellular carriers worldwide to route calls and messages to each other, have “serious vulnerabilities that undermine the privacy of the world’s billions of cellular customers.” Researchers in Germany have discovered that hackers with an in-depth knowledge of SS7’s different features would be able to exploit certain functions to listen to private calls and intercept text messages.

One way that hackers could intercept calls would be to exploit cellular carriers forwarding function — which allows a user to have his calls directed to another number — by redirecting “calls to themselves, for listening or recording, and then onward to the intended recipient of a call. Once that system was in place, the hackers could eavesdrop on all incoming and outgoing calls indefinitely, from anywhere in the world.”

Despite mobile carriers working to secure data, the Post reports that the weaknesses in SS7 have left millions vulnerable:

These vulnerabilities continue to exist even as cellular carriers invest billions of dollars to upgrade to advanced 3G technology aimed, in part, at securing communications against unauthorized eavesdropping. But even as individual carriers harden their systems, they still must communicate with each other over SS7, leaving them open to any of thousands of companies worldwide with access to the network. That means that a single carrier in Congo or Kazakhstan, for example, could be used to hack into cellular networks in the United States, Europe or anywhere else.

It’s unclear how much, if any, data has been intercepted due to these vulnerabilities, but as Engel told the Post, “I doubt we are the first ones in the world who realize how open the SS7 network is.”

[Washington Post]

TIME Mobile

Here’s Why You’ll Pay Less for Your Wireless Plan Next Year

T-Mobile
T-Mobile President and CEO John Legere speaks at a news conference at the 2013 International CES at The Venetian on January 8, 2013 in Las Vegas, Nevada. David Becker—Getty Images

Carriers like Verizon, ATT&T and T-Mobile are fighting a price war that could last months. The longer it endures, the more choice consumers will have

This hasn’t exactly been a banner year for wireless carriers’ stocks. While the S&P 500 Index has risen 8% this year, AT&T and Verizon, which together control about 83% of the wireless market, are down 8%.

The two companies have fared especially poorly in the last month: AT&T is down 10% and Verizon is down 12%, while the S&P is down only 2%. The reason is one that may delight consumers and concern investors: A price war, in which rivals cut prices to steal market share from one another, has broken out among carriers, and it’s only likely to get more intense next year. The longer a price war endures, the more choice consumers will have, though it means financial pain for carriers.

Verizon issued a press release last week with a headline touting “strong wireless customer growth” this quarter, but contained less sunny news further down: the “impacts of its promotional offers . . . will put short-term pressure” on Verizon’s profit margins. When companies issue statements about earnings before they’re officially reported, there’s usually worrisome news tucked inside. The following day, Verizon CFO Francis Shammo offered more spin.

“What we’re seeing is a pretty exciting period here at Verizon Wireless,” he said at an investors’ conference, “where we saw an increase in the activations but we’re also seeing some increase in the churn as well.”

Churn, which measures customer attrition, is a scourge to companies that rely on subscribers because it can signify customer dissatisfaction or the impact of rivals’ lower prices. A recent survey by Consumer Reports suggests customer satisfaction is comparable among AT&T, Verizon and T-Mobile (not so much Sprint, which is having issues in upgrading its network). In previous surveys, Verizon had a clear lead and T-Mobile had lagged. That’s a sign Verizon owes its churn problem to competitors’ lower prices.

Still, Verizon’s Shammo argued that talk of a price war was overstated and that “the revenue of the industry . . . has come down slightly but not as much as everybody is making it out to be.” The market disagreed. Verizon’s stock fell 4% as Shammo made his comments. Two securities firms downgraded Verizon’s ratings, while two others lowered their price targets for the stock.

It didn’t help that at another investment conference that same day, AT&T CFO John Stephens was saying something similar in starker terms.

“The current impact — the current environment is impacting churn,” said Stephens. “In fact, we expect postpaid churn to be higher than it was in the year ago fourth quarter. This will impact fourth-quarter adjusted wireless margins.”

That’s especially good news for T-Mobile, which, under the banner of the “uncarrier,” has run promotions that remove two-year lock-ins and data caps and offer lower-price plans to steal customers away from its bigger rivals. AT&T and Verizon have responded with their own lower-priced plans, but the advantage seems to be going T-Mobile’s way.

Last week, T-Mobile CEO John Legere boasted to the Wall Street Journal that it’s taking in more customers than it’s losing, meaning it isn’t being hit by the same churn striking Verizon or AT&T. T-Mobile upped the ante yet again Tuesday with its eighth “uncarrier” promotion, which lets users roll over unused LTE data from one month into the next for free. Mobile carriers once offered similar roll-over offers for phone calls when it became clear that data networks were displacing voice calls, but until now data plans had no such perk.

None of this means T-Mobile and Sprint’s investors are necessarily any happier than those who own AT&T and Verizon stock. In fact, they’re probably less happy. T-Mobile’s stock is performing as badly as Verizon and AT&T’s this month, and year to date it’s down 26%. T-Mobile is pursuing subscriber growth and revenue with its low prices, but that strategy pushes down profits — the “uncarrier” has posted a loss for three of the last four quarters. Sprint’s stock is doing even worse: It’s down 62% so far this year.

From the looks of things, the carriers’ fierce competition may continue into 2015. This month, Sprint began offering to halve the monthly bills of AT&T and Verizon subscribers who switch to similar plans on Sprint. Not to be outdone, T-Mobile offered an unlimited data plan with two lines for $100 a month.

Verizon’s Shammo predicted the price war will pass in a matter of months. “I think that things will settle down in 2015,” he said at the UBS conference. “Some of this is just temporary promotion-type stuff to stimulate some growth . . . You can’t do that long term. You can do that for a quarter or two, but then you have to get realistic.”

There’s reason to think that may not happen. When price wars break out, investors often watch who is gaining market share and revenue. Right now, that’s T-Mobile, despite its struggling performance on Wall Street. Its CEO has taken on activist shareholders in the past and has the grit to do so again. As for Sprint, investors may come to see that fighting on price may be the best option as long as customer satisfaction remains low.

At the same time, niche carriers are beginning to win over some customers as well. In Consumer Reports’ recent ranking of carriers, the two clear winners were tiny ones: Consumer Cellular and Ting, both of which ranked high on value and network quality. Last quarter, according to Cowen & Co., smaller carriers like them made up 5.2% of the postpaid mobile market, up from 4.2% only a quarter before.

For subscribers weary of having only two comparably priced mobile carriers to choose from, price competition from smaller players is welcome, even if network quality has long been an issue. When industries go from being uncompetitive to more competitive, there is often a period of declining margins across the board as consumers are given a broader range of choices.

The current price wars are coming at a time when carriers need to bid on costly spectrum auctions and spend money upgrading their networks. That suggests a tough time ahead for wireless carriers and their investors in the short term. But if price competition becomes a long-term phenomenon, it could eventually bring big returns for whichever companies emerge as the victors.

TIME Mobile

T-Mobile Now Lets You Roll Over Your Unused Data

T-Mobile
A Deutsche Telekom T-Mobile logo hangs under pink umbrellas at the stand of the German telecommunications giant at the 2014 CeBIT computer technology trade fair on March 10, 2014 in Hanover, central Germany. John Macdougall—AFP/Getty Images

For customers who buy additional data on top of their plans

We’ve all been there: Every month, a slice of our mobile data plan goes unused, only to disappear into the ether forever at the end of the month. Now, one carrier aims to put an end to that.

T-Mobile will start rolling over customers’ unused data from month-to-month, the carrier announced Tuesday. That unused data will get added to what T-Mobile is calling a “Data Stash,” where customers can use it for up to a year to avoid going over their plan’s monthly data limits.

“With Data Stash, when you buy additional high-speed data, there’s no need to lose what you don’t use,” T-Mobile CEO John Legere said in a statement.

T-Mobile is rolling out Data Stash for customers on “Simple Choice” plans who buy at least 3GB of additional smartphone data or 1GB of additional tablet data above their plan’s base rate. Qualifying T-Mobile customers will start out with 10GB of data in their Stash.

T-Mobile has a history of making bold moves to shake up the wireless carrier industry, like offering to pay competitors’ early termination fees for customers who switch to the service before their contracts are up. T-Mobile’s competitors, including Verizon, AT&T and Sprint, have often followed T-Mobile’s moves, but it remains to be seen if they’ll play ball this time: Overage fees charged to customers who exceed their monthly data limits are a lucrative source of income for wireless carriers. T-Mobile’s aim here is most likely to forego some of those fees in favor of attracting rivals’ customers fed up with overage charges.

The Data Stash announcement came during T-Mobile’s “Uncarrier 8.0″ event, during which the company also touted its recent speed improvements to wireless broadband services in several cities, including New York.

TIME Google

Google Android Is Getting This 1 Awesome New Feature

Android Apps
Bloomberg / Getty Images

Location, location, location

The Android version of Google Hangouts, Google’s video chat app, is getting some helpful new features today. If a friend you’re talking with through the video chat app asks “where are you,” Google will recognize the phrase and allow you to immediately share your location with the press of a single button. The app is also adding “last seen” timestamps to users so it’s easier to tell whether friends are available to talk or not.

The visuals of Hangouts are also getting an update with 16 new sticker packs that feature penguins, koalas and cats, among other creatures. New video filters like sepia and black and white have also been added.

The Hangout changes are exclusive to Android for now, but an iOS update is also in the works.

[The Verge]

MONEY Fast Food

Starbucks Launches Mobile Ordering So You Can Skip The Line

Starbucks is rolling out a mobile ordering system that will allow customers to place an order on the go and skip the line at pick up.

TIME Innovation

Five Best Ideas of the Day: December 2

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

1. Let’s push for more college-educated cops.

By Keli Goff in the Daily Beast

2. As strongmen — often U.S. allies — attempt to lock up lifetime power, an African democracy movement takes shape.

By Mark Varga at the Foreign Policy Association

3. Being connected is more of a good thing than a bad thing.

By Mathew Ingram in GigaOm

4. Beyond diamonds: Conflict minerals are a growing blight. Enforcing a global standard can stop abuse.

By Michael Gibb in Project Syndicate

5. Changing the way we classify psilocybin — magic mushrooms — could open the door to research and new treatments for depression.

By Eugenia Bone in the New York Times

The Aspen Institute is an educational and policy studies organization based in Washington, D.C.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME apps

Google Says These Are 2014’s Best Android Apps

Check out Google's list of the best of the best

With more than 1 million apps available, parsing through the Google Play Store can be a challenge. Google has provided some help by offering a list of the best Android apps of 2014. Whether you’re looking to stream a movie, learn a new language or manage your business calendar, chances are there’s an app that will fit the bill.

Here’s a look at what Google has highlighted as the best of the best:

Productivity

  • Wunderlist: To-Do List & Tasks
  • SwiftKey Keyboard
  • IFTTT (If This, Then That)
  • Sunrise Calendar
  • Todoist: To-Do List, Task List
  • Mailbox
  • Offtime – Life Unplugged
  • Rundavoo
  • Money Tracker by BillGuard
  • SlideShare Presentations
  • Strive

Education

  • TED
  • Lumosity
  • Duolingo
  • Craftsy Classes
  • Monki Chinese Class
  • Child Mode & Time Education
  • Amazing World Atlas

Entertainment

  • Hulu
  • Comedy Central
  • Disney Movies Anywhere
  • DramaFever
  • 5by
  • Dailymotion

News

  • Yahoo News Digest
  • BuzzFeed
  • The Economist
  • CNN
  • New York Times
  • Watchup: Your Daily Newscast

Music & Audio

  • Shazam
  • Pandora
  • iHeartRadio
  • Afterlight
  • Musixmatch Music Player Lyrics
  • djay 2
  • TuneIn Radio
  • Soundhound
  • edjing – DJ Music
  • Equalizer + MP3 player volume
  • Ultimate Guitar

Sports & Fitness

  • Onefootball – Pure Soccer!
  • Golfshot: Golf GPS
  • Univision Deportes
  • 7 Minute Workout
  • Google Fit

Shopping

  • Wish
  • Groupon

Photography

  • Over
  • EyeEm: CAmera & Photo Filter
  • Facetune
  • Carousel – Dropbox Photos
  • Video Collage Maker
  • Camera Zoom

Personalization

  • Locket Lock Screen
  • Link Bubble Browser

Social

  • Timehop
  • OKCupid
  • Secret
  • LINK – with people nearby
  • Frontback
  • Obscure
  • Lettrs
  • Telegram
  • Samba: Videos + Reactions
  • Bitmoji
  • Skype Qik: Group Video Chat
  • Viadeo

Travel

  • Expedia
  • Maps.ME
  • Anywayanyday
  • Minube
  • Windfinder
  • Uber

Read next: 50 Best Android Apps for 2014

TIME Companies

Google Just Took its First Step Back Into China

The Google logo is reflected in windows
The Google logo is reflected in windows of the company's China head office as the Chinese national flag flies in the wind in Beijing on March 23, 2010. AFP/Getty Images

Chinese developers can now sell their apps as exports in Google's app store

Google is trying to woo mobile developers in China.

The search giant has announced that Chinese app developers will now be able to sell apps to Google Play users in more than 130 other countries. It’s one of Google’s first attempts to engage with the Chinese marketplace since leaving the country in 2010 in following conflicts with the government over national censorship policies.

The Google Play Store is severely restricted in China, so app makers in the country will be selling their wares as exports. It’s no surprise that Google is having second thoughts on leaving the country behind: China has more than 600 million Internet users, and that figure is expected to reach 800 million next year.

This olive branch to developers may be the first step in a more ambitious strategy. Google is reportedly looking to partner with a Chinese phone manufacturer or wireless carrier to launch a full-featured version of the Play store in the country, according to the The Information.

MONEY food and drink

Here’s Why Starbucks Will Just Keep Growing

Customers line up at a Starbucks Coffee in New York.
Mark Lennihan—AP

Starbucks is moving quickly in pursuit of several major growth opportunities.

Over the past two decades, Starbucks Corporation STARBUCKS CORP. SBUX -0.7372% has become almost synonymous with coffee. Today, Starbucks operates more than 20,000 stores across dozens of countries.

Considering how large Starbucks has become, it might seem that the company’s rapid growth can’t continue much longer. However, that couldn’t be further from the truth. Starbucks has plenty of opportunities to continue growing at a healthy pace for decades to come.

Starbucks wraps up a strong year

Starbucks recently reported its financial results for the 2014 fiscal year, which ended in late September. For the full year, Starbucks added 1,599 stores to its worldwide footprint and comparable store sales rose 6%. That boosted revenue by 11% to more than $16.4 billion.

Starbucks’ full-year adjusted EPS grew 21% year over year to $2.66, helped by strong margin performance. The company also projected that adjusted EPS will reach $3.08-$3.13 in fiscal year 15, which translates to 16%-18% growth.

Growing beyond coffee

One big growth initiative at Starbucks has been boosting non-coffee sales. In 2012, Starbucks purchased Bay Area bakery La Boulange in order to add more food items to its menu.

The chainwide rollout of La Boulange food items has been bumpy — some customers preferred the old Starbucks bakery selection — but it has still been successful overall. Food sales have been growing at a faster pace than the rest of the company, driven by strong sales of breakfast sandwiches. Starbucks recently added new lunch sandwich offerings to stimulate additional growth.

Starbucks is also starting to expand its Starbucks Evenings concept. Starbucks began testing the sale of wine, beer, and small-plate appetizers after 4 p.m. at a single Seattle location in 2010. The company has since expanded the pilot to several dozen locations.

Starbucks plans to add hundreds of Starbucks Evenings locations in 2015. In the long run, thousands of Starbucks stores could feature the Starbucks Evenings menu, driving strong sales growth in the less busy late-afternoon and evening hours.

Lastly, Starbucks has been doubling down on tea since the acquisition of Teavana in late 2012. Globally, tea is even more popular than coffee, and it represents a $90 billion market. Starbucks is adding tea bars to existing Teavana stores to boost sales of prepared beverages. It is also selling certain Teavana branded beverages in Starbucks stores.

These investments are starting to pay off, as Starbucks saw more than 20% growth in iced tea sales over the summer. Ultimately, CEO Howard Schultz wants to make Teavana the Starbucks of tea, and sees a tremendous growth opportunity there.

Mobile order and pay

Starbucks revealed yet another potential game changer last month when it announced plans to roll out mobile order and pay functionality chainwide in 2015. Customers will be able to place orders in advance and pick up their orders without waiting in line. Starbucks describes it as the urban answer to the convenience of drive-through.

Beginning next year, Starbucks will also use this platform to offer delivery in some top urban markets. Schultz’s vision is that a customer could place a standing food or drink order and have it delivered to his or her desk every day. If this concept takes off, it will represent a huge long-term differentiator — and growth driver — for Starbucks.

Lots of ways to grow

Starbucks is moving quickly in pursuit of several major growth opportunities. Investors should recognize that some of these growth initiatives are bound to be more successful than others.

However, the bottom line is that Starbucks has lots of irons in the fire, and many paths to producing significant long-term growth. (In addition to the store-based initiatives mentioned here, Starbucks is rapidly growing its consumer packaged goods business.)

Starbucks shares currently trade at about 25 times projected 2015 earnings. That still represents a premium to the broader market, but one that is easily justified by Starbucks’ numerous growth opportunities and its leading position in digital engagement. For long-term investors, Starbucks stock could be a great bargain today.

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