TIME Telecom

Sprint Is Offering Super-Cheap Data Plans for Only Accessing Social Media

Sprint New Facebook Only Wireless Plan
A man shows the smartphone photo sharing application Instagram on an iPhone. Thomas Coex—AFP/Getty Images

In the latest example of a wireless carrier offering unique but controversial data plans

As wireless carriers launch services to make mobile Internet more affordable, Sprint is taking a more drastic approach with its new wireless plan—unlimited access to a few popular social media apps, and nothing else.

Offered under Sprint’s Virgin Mobile brand, the $12 monthly plan allows customers uncapped access to either Facebook, Twitter, Instagram or Pinterest, according to the Wall Street Journal. For $10 more, they’ll receive access to all four, and another $5 will grant unlimited streaming from a music app of their choice. The offers are part of a new set of customizable mobile data plans Sprint debuted Wednesday.

Sprint’s announcement arrives on the heels of other wireless carriers’ policies and services that waived certain apps’ data usage from monthly data limits. T-Mobile announced in June that it would stop counting data consumed by music streaming towards monthly caps, one of the perks of its “Un-Carrier” initiative to get away from some of the wireless industry’s long-held policies. Earlier this year, AT&T unveiled a “sponsored data” service where sponsors can entice subscribers to try out their apps while the related data use is billed to the sponsors. (Sprint isn’t being paid by the apps included in its plans, but Dow Draper, president of prepaid at Sprint, has said such a deal is “definitely possible.”)

While Sprint’s new plan seems favorable to users who go online only to tweet, post, upload or pin, it’s already incited criticism from net neutrality proponents who believe all traffic should be created equally. In other words, they argue that no Internet Service Provider should be allowed to enforce preferential treatment—faster speeds—for its users, while other users remain in congested, slower areas of the network. Sprint’s opt-in plan isn’t paid prioritization, but its nature as an exclusive, divided Internet access (like T-Mobile’s unlimited streaming, and also Comcast’s on-demand video games) have some advocates worrying it sets a potentially dangerous precedent during an ongoing debate over net neutrality. (The FCC’s Open Internet rules, however, have never applied to wireless carriers.)

Sprint’s new plan is available at only Walmart with a base offering of 20 minutes of talk time and 20 texts.

TIME Telecom

Streaming Music Won’t Count Against T-Mobile Data Plans

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Wireless carrier T-Mobile will soon begin allowing customers to stream as much music as they want from services like Spotify and iTunes Radio. The company announced Wednesday that it will no longer count music streamed from select services towards customers’ monthly data usage limits.

The services currently included in the program are Pandora, iHeartRadio, iTunes Radio, Rhapsody, Slacker, Spotify and Milk Music. These options comprise about 85 percent of the music streaming traffic on T-Mobile’s network, the company said. Customers can vote via social media on other services they’d like to see included as well.

The move will allow avid music listeners to do considerably more with their monthly data allotment. A person that streams music for 50 minutes a day uses about 1.5 GB of data per month just for that task, according to T-Mobile’s own data calculator. If unchecked, such use can lead to huge overage charges on competing carriers’ networks or throttled speeds on T-Mobile (the carrier eliminated overage charges earlier this year in favor of slowing down service for people who use more than their allotted data).

The new feature has similarities to AT&T’s Sponsored Data plan, which alllows companies to pay AT&T to let customers use apps or websites without eating into their monthly data allotment. Some have said that these concepts violate the ethos of net neutrality, which discourages companies from granting preferential treatment in the way they deliver certain types of data across the Internet — though net neutrality rules have not previously applied to mobile Internet use.

Unlike AT&T’s Sponsored Data program, though, T-Mobile will collect no fees from the streaming services that are granted unlimited streaming.

In addition to lifting data caps on music streaming, T-Mobile also announced a new streaming service of its own, called unRadio. The new, on-demand service, made in partnership with Rhapsody, has a catalog of 20 million songs and no ads. It will be free for T-Mobile subscribers with an unlimited data plan and $4 per month for subscribers with more limited plans.

The new programs are the latest steps in T-Mobile’s “Un-Carrier” initiative, which has introduced several disruptive concepts to the wireless industry, such as the elimination of two-year contracts and international data charges. The cost-cutting measures are making T-Mobile bleed money, but they also helped the carrier gain more new subscribers in the first quarter than AT&T, Verizon and Sprint combined.

TIME Shopping

Senior Citizens Are, Like, Totally Into Shopping and Gossiping on the Phone

Regional Economy In Coastal Town Ahead Of Second Quarter GDP Report
Elderly people sit with their shopping bags as they wait for transportation at a bus stop in Hastings, U.K., on Tuesday, July 23, 2013. Chris Ratcliffe—Bloomberg/Getty Images

Survey finds they're always hanging around the mall, bragging about their grandkids

Most adults think they’ve outgrown the days of endless hang outs at the mall and marathon chats over the phone. In fact, they haven’t quite grown into them.

A Bureau of Labor Statistics annual survey of how Americans spend their time, released Wednesday, reveals that the pasttimes typically associated with adolescence, shopping and gabbing, tend to peak in the golden years.

Calling, texting, e-mailing and snail mailing consumes roughly 12 minutes of an average teenager’s day. If that figure seems low, it’s partly because the survey only counts the moments when gabbing is a “primary activity,” outside of work and school for instance. It appears to be a primary activity of the golden years, however, steadily climbing to nearly 16 minutes a day.

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Source: Bureau of Labor Statistics

Shopping tends to consume more and more waking minutes of Americans’ lives as they age, beginning at 30 minutes a day in adolescence and steadily climbing to a peak of 52 minutes for Americans 75 years and older.

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Source: Bureau of Labor Statistics

 

TIME Internet

Why Netflix May Be in Serious Trouble

AFP/Getty Images

FCC chairman Tom Wheeler says his staff is “collecting information, not regulating” in debate over slow streaming speeds

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This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at Fortune.com.

The FCC has heard your concerns over the weeks-long squabble between Netflix and Verizon regarding slow Internet streaming speeds and the FCC is . . . looking into it.

Federal Communications Commission chairman Tom Wheeler issued a statement Friday afternoon to say his staff is “looking under the hood” to determine who, if anyone, is at fault when it comes to poor Internet service and whether or not Internet service providers (ISPs) are purposefully interfering with streaming speed in order to strong-arm content providers like Netflix and Hulu into paying more for faster service, as Netflix has claimed.

Wheeler says the FCC’s goal is “protecting Internet consumers,” some of whom have contacted him directly with their concerns as the dispute between Verizon and Comcast, and Netflix has played out in the public sphere. Wheeler referred specifically to one consumer, whom he identifies only as “George,” who contacted the FCC chairman with a plea to get to the bottom of the Netflix-Verizon dispute.

For the rest of the story, go to Fortune.com.

TIME mergers

AT&T’s $50 Billion DirecTV Buy Is Risky, Probably Not Great for You

The telecom giant will pay $48.5 billion in stock and cash as it looks to keep up with rival Comcast, but it's a risky deal that may not benefit consumers

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I’m as guilty as anyone: Readers of business news hunger for big numbers. The bigger, the better. On that front, the $48.5 billion that AT&T said Sunday it will pay to buy DirecTV did not disappoint. Eat your heart out, Mark Zuckerberg.

In its announcement of the deal, AT&T threw out even more mega numbers. Toss in DirecTV’s net debt and the deal’s value rises to $67.1 billion. The combined company will have 26 million customers in the US and 18 million in the growing market of Latin America. AT&T even said it expects “cost synergies to exceed $1.6 billion on an annual run rate basis by year three”—whatever that means, but it has a ten-digit number in it, so it sounds impressive.

But there’s something about AT&T’s big numbers that grow stale quickly. The problem with big spending is, if you don’t put it toward something worthwhile, it’s just a waste. Time’s Sam Gustin noted on Twitter that the sum AT&T is spending on DirecTV could deploy a hell of a lot of gigabit-fiber service to homes that want it. Instead, it’s going to buy one more aging incumbent in the fast-changing TV market.

So once the transitory buzz of the large numbers ebbs, the strategy behind the deal will start to be scrutinized a bit more. And so far, the strategy seems to be: Well, Comcast has gotten big, so AT&T needs to get bigger too. This isn’t AT&T’s only recent big-ticket bid. In 2011, the company tried to buy T-Mobile USA from Deutsche Telekom for $39 billion, but that deal fell through after the Justice Department intervened.

Why is AT&T so keen to buy its way into growth? Because no matter how much blood the company tries to squeeze from its customers, the stock can’t break out of the flatline it’s been in for a while. As this graph shows, AT&T’s stock has risen less than 10% in the past two years. The S&P 500, during the same period, has risen more than four times as much.

Screen Shot 2014-05-18 at 7.20.45 PM

Some people have taken a look at the strategy behind the DirecTV purchase and not been kind in their conclusions. When rumors surfaced last week of a possible acquisition, analyst Craig Moffett suggested that the acquisition could be a distraction from an inevitable decline in AT&T’s growth. “When DirecTV begins to shrink, then the price paid will no longer matter,” Moffett wrote. “It will merely be another liability that AT&T will need to offset by growth somewhere else.”

Aging companies often make big acquisitions when facing a decline in their own businesses. In the best case scenario, the acquired company is snapped up at a discount and revives overall growth for years to come. More commonly, the big buyouts are merely attempts to buy time. Integrating incompatible operations for a couple of years, and providing excuses for large-scale layoffs. The smoke and mirrors works only for so long. Then another expensive deal is required to keep the ruse going.

The DirecTV deal is looking like it will fall into the latter camp–an expensive gambit that may at best offer growth and cost-savings in the short-term. Pay-TV has an uncertain future in an era where over-the-top offerings like Netflix and video consumption on mobile devices are seeing much stronger growth. DirecTV’s stock has quadrupled in the past five years, but there’s little reason to think growth will continue at anything close to that rate.

Moffett, who was a top-ranked analyst at Sanford C Bernstein & Co. before setting up his own research firm, put it more severely. “Like skid row junkies in the final wretched tremens of downward spiral, telecom/cable/satellite investors now appear to need a deal fix almost daily to stave off the messy crisis of incontinence that comes with the inevitable withdrawal.”

Other analysts speculated about AT&T’s motives for the deal, but few of them shared the sunny interpretations of the acquirer. The timing, coming after Comcast’s plans to buy Time Warner Cable, could be an attempt to piggyback on another telecom deal, one likely to win regulator approval. Or maybe Comcast sparked a merger mania in the telecom industry, with DirecTV the first to be snapped up. Sprint may be prompted to buy T-Mobile. Dish Network could also be in play soon.

In other words, no matter how you slice it, this deal has little to do with helping the consumer. Yet in announcing the deal, AT&T referred to the consumers who are its customers (19 times) nearly twice as often as it did its shareholders (10 times).

So far, the consensus is that DirecTV is unlikely to draw the regulatory criticism that T-Mobile did for AT&T. But AT&T isn’t taking any chances. The company took a $4 billion writedown after the T-Mobile deal fell through, most of it related to breakup fees. AT&T made clear today it wouldn’t pay a fee to DirecTV should regulators foil the deal this time.

That’s good for AT&T, but it adds an air of desperation to DirecTV. Another sign DirecTV wanted to sell quickly: Rumors of the deal last week put the price at $100 a share, but the actual deal is only $95 a share. DirecTV’s stock only rose as high as $86.90 on the $100-per-share rumor, reflecting the Street’s skepticism on the price. Some of that skepticism, it seems, was warranted.

For consumers, the bigger question is, when will these telecom mega-mergers end? Benefits from mergers are usually passed on to shareholders in the form of share repurchases or higher dividends. They rarely benefit customers—in fact, reduced competition in telecom has historically meant higher fees.

That’s why consumers should be wary of these big-ticket mergers. Don’t be too dazzled by the big, flashing numbers of the headlines. The more and the merrier the mergers grow, the more the consumer becomes an afterthought.

TIME Telecom

T-Mobile’s Renegade CEO Is Crushing His Rivals

T-Mobile Holds Announcement Event In New York
T-Mobile C.E.O. John Legere Steve Sands—WireImage/Getty Images

Wireless industry had better watch out

Being a renegade can be a lot of fun—but it isn’t cheap. That was the message of T-Mobile’s recent quarterly earnings report. The company, which bills itself as the “un-carrier” for policies which run counter to industry habits, spent the last year lobbing grenades at AT&T and Verizon Wireless while CEO John Legere gleefully badmouthed the pair as duopolist dorks whose days of easy money were over.

He’s gone after their business like a starving man in search of a meal: T-Mobile added 4.4 million net customers last year. Compare that with 2012, when the company lost customers. “2013 was a transformational year for us, as we turned a declining business into a growth one,” crowed Legere.

How did he get all those new customers? He paid for them. In its last quarter, T-Mobile’s revenues rose 39% to $6.83 billion while generating a loss of $20 million. The losses come from the fact that T-Mobile is offering to pick up the tab when consumers break their service contracts with competitors. The company also reported that its ARPU—average revenue per unit, a key industry metric—declined by 2.9%. Normally that would be an alarming figure. But it’s consistent with the fact that T-Mobile customers are switching to the everyday low price plan that T-Mobile has used to break the hold of the bundled services approach of AT&T and Verizon. That strategy is hardly new but it can be effective: attract more customers at a lower price and live off the higher volume.

So far the T-Mob is for real. Any company can buy customers from a rival by lowering the price. But for the most part, you’re just renting them until the same rivals match or beat your price and then the new customers go away. That doesn’t seem to be the case here. The carrier’s “churn,” meaning the number of customers it lost, dropped to 1.7% from 2.5%. The company is also reporting that it is getting customers with higher credit ratings, which usually translates to lower losses from bad accounts. “Better customers are coming to T-Mobile and they are staying longer,” says Legere.

The T-Mob has broken the bonds that keep consumers tied to their phone or cable carriers. Those are known as switching costs. And in the phone industry, the switching cost isn’t just money, but it also be the pain of getting the whole family out if you’re on a family plan, for instance. T-Mob has made the switch painless—but it is yet to make it profitable.

Legere has no plans to ease up and if T-Mobile continues to rack up new customers at its current rate the profits will eventually roll in. The company expects to sign 2-to-3 million net new customers to service contracts this year—meaning that it expects to snatch them away from competitors since nearly everyone who wants a phone has one. If you are Verizon, and just floated a $49 billion bond offering to complete the $130 billion buyout of wireless partner Vodofone, the last thing you need is Legere short-circuiting your pricing structure. If you are a consumer, the cellphone industry has finally become a fun place to be.

TIME Telecom

The Surprising Best Thing about Google Fiber Coming to Your Town

A Google Fiber technician gets supplies out of his truck to install Google Fiber in a residential home in Provo, Utah, January 2, 2014. Provo is one of three cities Google is currently building gigabit internet and television service for business and residential use.
A Google Fiber technician gets supplies out of his truck to install Google Fiber in a residential home in Provo, Utah, January 2, 2014. Provo is one of three cities Google is currently building gigabit internet and television service for business and residential use. George Frey—Reuters

Sure, Internet speeds are faster, and the base-level Google Fiber service is cheaper than typical Internet providers. But what might truly set Google Fiber apart from the pack is that the customer service doesn’t suck.

This week, Google announced that it is looking at expanding Google Fiber, its ultrafast broadband Internet service, to nine more U.S. cities. The service, which costs customers $70 per month for 1-gigabit Internet—estimated at 100 times faster than the average U.S. connection—or $0 per month (after a $300 installation fee), is already operational in Kansas City, and has been approved and is in progress in Austin, Texas, and Provo, Utah. Now Google is exploring the possibility of bringing Google Fiber to Atlanta, Charlotte, Nashville, Phoenix, Portland, Raleigh-Durham, San Antonio, Salt Lake City, and San Jose as well.

Most communities are greeting Google with open arms, and are actively lobbying for Google Fiber to one day be offered to residents—hardly a done deal—once the company’s feasibility studies are done. “We’re excited by the call and the invitation,” Salt Lake City Mayor Ralph Becker said, according to the Salt Lake Tribune. “The opportunity for our residents is enormous. Bringing fiber to every household changes the dynamic.”

Raleigh Mayor Nancy McFarlane described the possible entrance of Google Fiber into the community as “very exciting,” per the News & Observer, especially because the region has many residents “that work in those industries that would really benefit from having this kind of connection to their home.”

(MORE: Google Is Making a Major Play to Provide Your Internet)

The speed of the service and the entrance of a hot new competitor into the increasingly monopolistic world of cable-Internet providers is what gets most of the attention concerning the spread of Google Fiber. Amid all the excitement, one noteworthy upside to Google Fiber gets overlooked: In an industry known for treating customers fairly horribly, Google Fiber stands out because its customer service is actually good.

As USA Today noted recently when reporting on the potential merger of Comcast and Time Warner Cable, the two companies ranked dead last in the 2013 survey conducted by the American Customer Satisfaction Index. The two companies have also been perennial contenders for the dubious “Worst Company in America” crown, in an annual competition hosted by the consumer-advocacy site Consumerist.

While still in its infancy, Google Fiber has thus far managed to distance itself from the competition in terms of decent customer service—which, admittedly, shouldn’t be difficult since the bar has been set so low. Early Google Fiber sign-ons in Kansas City give the service almost universal high marks. “The customer service is outstanding. They’re very apologetic if there’s a problem. They do their best to take care of things,” a customer described as “typical” by the Kansas City Star explained. “It’s not something you’re used to with that kind of service.”

Customers weighing in on Google Fiber service in Kansas City at Yelp also pass along plenty of praise to both the service and the customer service. “The installer was professional and friendly and explained everything thoroughly. His business card offers up his cell number for follow-ups,” one reviewer wrote. “These guys have worked really hard at customer service and professionalism. If you can make the switch, I’d highly recommend it.”

(MORE: Here’s Why Your Netflix Is Slowing Down)

This doesn’t mean that Google Fiber is perfect. The average household has no real need for 1 gigabit-per-second uploads and downloads, so it’s arguable that customers going with the $70-per-month option are wasting their money. Some customers have complained that the TV service—available for $120 per month, including a gigabit connection—can sometimes be glitchy, and that Wi-Fi sometimes doesn’t reach everywhere in their homes. Others have complained that the Google Fiber boxes installed along city streets are ugly.

More often, though, complaints around the country concerning Google Fiber focus on a different subject: How come my city doesn’t offer the service yet?

More on Google:

TIME South Korea

South Korea’s 5G Network Will Let You Download a Full Movie in a Second

Kim Hong-Ji / Reuters

China and the E.U. are also setting deadlines for 5G implementation, but South Korea is throwing way more money at the technology

South Korea has announced a $1.5 billion plan to upgrade its network to 5G capability by 2020.

“We helped fuel national growth with 2G services in the 1990s, 3G in the 2000s and 4G around 2010,” the country’s science ministry said in a statement Wednesday. “Now it is time to take preemptive action to develop 5G.”

The 5G-services are expected to be around 1,000 times faster than current technology — making it possible to download a full-length film in a second.

The year 2020 is also the deadline set by telecom giant Huawei for a 4G network in China, and by the E.U. for its next generation networks, but South Korea’s investment far exceeds the $600 million and $950 million earmarked by the Chinese and the Europeans respectively.

Tests with the 5G technology are also being carried out in Japan and the United States.

South Korea, already the world leader in connectivity, is looking to increase its share of the infrastructure equipment industry with this ambitious roadmap. Priority is being given to developing features such as ultra-HD and hologram transmission as well as new social networking services.

Globally, the 5G network is intended to make space for an expected seven trillion connected devices in the 2020s.

[Economic Times, CNN]

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