Monthly Archives April 2013

BlackBerry returns not sky high, says analyst

While regulators investigate the legitimacy of claims that BlackBerry’s new Z10 is experiencing higher-than-average return rates – something that the company vehemently denies – at least one firm is coming to the Canadian smartphone maker’s defence.

In a report released today, Jefferies & Co analyst Peter Misek backs BlackBerry’s claims that the new model is on track and abnormal return rates are not an issue. He notes the device is selling well in Asia.

“Our checks indicate that builds for Q10 have kicked into high gear and led overall BB10 builds to increase from 2 million a month to 2 million plus,” he wrote. “Anecdotal Asia demand checks were positive and U.S. checks indicate that return rates are not abnormally high.”

Last week, Boston-based financial services firm Detwiler Fenton & Co. claimed U.S. retailers were experiencing an increased rate of return for Z10 handsets, in some cases with returns exceeding sales. It reported users were finding the interface unintuitive and difficult to use. The report caused BlackBerry stock to plummet.

BlackBerry disputed the report, calling it “a gross misreading of the data or a willful manipulation.” It has called for both Canadian and American officials to review the report.

FCC workshop on cramming, bill shock this week

The Federal Communications Commission (FCC) is hosting a workshop on two very important consumer issues Wednesday – bill shock and phone cramming. The event will take place at FCC headquarters in Washington, D.C. from 9 a.m. to 12:15 p.m. Members of the public are welcome, and the meeting will also be streamed live at www.fcc.gov/live.

“Bill shock is the sudden and unexpected appearance of overage charges on wireless bills. Cramming is the practice of placing unauthorized, misleading or deceptive charges on telephone bills,” states a FCC media release. “The workshop will educate consumers about how to protect themselves from both of these problems, and include, for cramming, a policy discussion.”

Industry experts and consumer organizations will participate in panel discussions. Specific topics to be tackled include usage alerts and consumer experiences. Cramming issues such as differences between wireline and wireless consumer experience and potential for regulatory fixes will also be examined.

“The program will conclude with a discussion of industry measures to help consumers, and include an opportunity for consumers to ask questions,” states the release.

This week in wireless

There is never a dull moment when it comes to the ever-changing world of wireless. Here’s a quick Friday digest of some of the stories making headlines this week.

Verizon

Plenty of news on the Verizon front this week. First, the carrier announced a new prepaid feature phone plan. For $35 a month, you get 500 anytime minutes, unlimited text and unlimited Internet. Any overages will set you back 25 cents per minute. The plan works with feature phones only – smartphone users are out of luck – and Verizon is offering four different discounted devices: LG Cosmos 2, Samsung Gusto 2, Samsung Intensity and LG Extravert. Customers can also reactivate their old feature phones for use with the plan. Beware! Verizon mobile-to-mobile calling is not included, so that activity will eat up some of your minutes.

In addition to the feature phone plan, Verizon also announced changes to its device upgrade schedule. Instead of being eligible for upgrade after 20 months, you’ll have to wait until the end of your 24-month contract. It will impact those with contracts that expire in January 2014 or later. Verizon is selling it as an easy way to help subscribers plan for their upgrades but it’s unlikely to scratch the itch for those longing for the newest technology. Then again, if you want it that badly you could always opt to pay full market price.

The upgrade changes also impact multi-line accounts, which can still share upgrades within the same device category. However, there will no longer be an option to transfer a hotspot or tablet upgrade. Anyone who has been holding onto New Every Two credits will also want to use them – they expire forever on Monday, April 15.

T-Mobile

The Apple revolution has finally hit T-Mobile, which began selling the coveted iPhone5 today. Its flagship store in midtown Manhattan attracted a line-up of about a dozen people eager to get their hands on the device despite it being several months old. You can scoop up an iPhone5 for just $99 under T-Mobile’s new “Uncarrier” plans, paying off the remainder of the device with $20 monthly payments over a two-year period, or pay it off early if you prefer. There’s also the option of trading in an old iPhone 4 or 4S to receive credit toward the new device. Overall, it’s good news. Now that T-Mobile has a slice of Apple’s pie, it will likely expand its subscriber base and it won’t be left out of future device launches. In turn, it may help with Apple’s quest for U.S. market dominance. And customers have the chance to buy an iPhone5 on the cheap.

BlackBerry

BlackBerry may have surprised critics by posting a fourth quarter profit, but that doesn’t mean the Canadian smartphone maker is out of the woods just yet. Every week seems to be a new battle, and this week the company is taking on Boston-based financial services firm Detwiler Fenton & Co. More specifically, BlackBerry is taking issue with the firm’s report that claims U.S. retailers are experiencing an increasing rate of return for Z10 handsets, in some cases with returns exceeding sales. The reason? Users claim the interface is unintuitive and difficult to use. The news proved devastating to BlackBerry stock, sending it plummeting 7.8 percent on Thursday, the biggest one-day drop in the previous eight weeks.

BlackBerry officials are calling the report bunk, asking both Canadian and American officials to review the report, calling it “a gross misreading of the data or a willful manipulation.” It claims sales are on track and return rates are not higher than those of other companies.

“We call upon the appropriate authorities in Canada and the United States to conduct an immediate investigation,” Chief Legal Officer Steve Zipperstein said in a statement. “Everyone is entitled to their opinion about the merits of the many competing products in the smartphone industry, but when false statements of material fact are deliberately purveyed for the purpose of influencing the markets a red line has been crossed.”

Another bummer this week – though slightly amusing – is a Raymond James study that found 71.4 percent of those surveyed would never purchase a BlackBerry. Compared to the 31.3 percent who would never purchase an Android, and 19.7 percent who would never purchase an iPhone, the number is pretty grim. Only 250 people were polled, so it isn’t the most reliable report. But it sure is interesting.

BlackBerry’s bright spot this week? An public affirmation from board member Prem Watsa – who owns 10 percent of the company – that he has no plans to pull out his money any time soon.

Global View

Analysys Mason forecasts that telecom revenue will increase 1.7 per cent annually through 2017. Though two-thirds of revenue current comes from North America, Europe and Asia – global revenue was $1.5 trillion in 2012 – it is expected that emerging markets will account for the biggest growth in coming years. Mobile will continue to grow and fixed connections will continue to decline. It’s possible that established markets will flat line, or even decrease. China, India and Brazil are expected to lead the way with the most substantial growth, also being pointed to in a recent International Data Corporation smartphone report.

Small carriers withdraw from Canadian Wireless Telecommunications Association

Mounting frustration and perception of favouritism has led three small mobile carriers to cut ties with the Canadian Wireless Telecommunications Association (CWTA). WIND Mobile, Mobilicity and Public Mobile announced their withdrawal from the organization this morning, stating the CWTA has shown a consistent bias in favour of larger providers like Rogers, Bell and Telus.

In the eyes of the smaller carriers, the move means the CWTA can no longer claim to speak on behalf of the nation’s mobile wireless sector.

“When we were first approached by the CWTA, we were promised clear and fair representation on issues of true industry alignment,” said Simon Lockie, chief regulatory officer for WIND Mobile, in a press release. “But despite making our objections and concerns abundantly clear on numerous occasions, the CWTA has repeatedly failed to honour this promise, leaving us no alternative but to withdraw.”

Bob Boron, general counsel and senior vice-president of legal and regulatory affairs for Public Mobile, said the CWTA has often made decisions contrary to the best interests of the smaller wireless carriers.

Gary Wong, director of legal affairs for Mobilicity, agreed.

“We have spent the better part of three years repeatedly voicing our opposition to the CWTA on a wide range of matters to the point of issuing a press release in January 2011 that publically expressed our dissent on the CWTA’s position on wireless consumer protection,” he said, in the press release. “There seems to be a blatant disregard of the new entrants in favour of acting in the best interests of the Big Three carriers and it is unacceptable.”

No word yet from the CWTA on the matter.

Virgin offering T-Mobile customers $100 rebate

Virgin Mobile is dangling the carrot in front of T-Mobile subscribers, enticing them to jump providers with a $100 rebate.

According to information on Virgin’s website, those switching from a $60 a month T-Mobile plan to Virgin’s $55 a month unlimited plan will receive faster speeds after data limit caps and a subsidized Samsung Galaxy S II for $299.99. The phone retails at T-Mobile for $413.99, with no contract.

The two-year cost difference is pegged at $1,320 versus $1,440. Tack on the additional savings from the $100 credit and $114 device subsidy, and it all adds up to $334. Perhaps it’s not enough to woo those happy with their T-Mobile service, but could appeal to those looking for a new wireless home.

Virgin Mobile USA is one of Sprint’s prepaid brands.

Users spend 2 billion minutes a day Skyping

Skype has proved itself a popular way for people around the world to stay in touch without racking up pricey phone bills. Ever wonder just how many people are using the VoIP app? Well wonder no more – according to the company, it adds up to two billion minutes per day.

As Mashable points out, that’s the equivalent of watching 16 million movies, or travelling from Earth to the moon 225,000 times.

“Skype has been growing in its number of minutes at double digit rate for a steady time,” Elisa Steele, Skype corporate VP of marketing, was quoted as saying. “The number of mobile users continues to grow at a very strong rate too, not just from the desktop but other devices, as well.”

The fact that ‘Skyping’ is now a commonly used verb really says it all.

AT&T tops in Gartner wireline report

Gartner Inc. has released its new report Critical Capabilities for U.S. Wireline Telecom Services, examining the major service providers’ capabilities in the American marketplace. Of the eight studied, AT&T landed on top with the best solutions and services for businesses of all sizes.

The study looked at seven key capability areas: multiprotocol label switching (MPLS) services, SIP trunking, dedicated Internet, metro private line, managed and redundant broadband, Ethernet WAN and managed routers.

“AT&T’s overall rating reflects its depth of product capabilities across the portfolio and explicit strengths in such areas as metro and optical networking and managed broadband, where competitors’ offerings are not as mature or as broadly deployed,” states the report.

On a scale of 1.0 (poor) to 5.0 (outstanding), AT&T averaged a product rating of 4.4. It particularly shone in the metro private line segment, receiving the highest possible mark. It was No. 1 in all use cases, including large enterprise, midsize enterprise and hybrid WAN network.

However, Gartner does point out the company has some customer service work to do – there have been demands for AT&T to react more quickly to network upgrade requests.

Verizon slid into second with an average product rating of 4.1. It was recognized for delivering a broad range of solutions and increases in private IP services over LTE, and for having a strong hold in several verticals including healthcare and finance.

“Although Verizon gets consistently strong feedback for the quality of presale design and engineering, Gartner customers continue to report frustration with service delivery of high-bandwidth connectivity, as well as network availability in large multisite deployments, which is reflected in their lower scores,” outlines the report. “Enterprises of all sizes should strongly consider Verizon for each of the key use cases presented in this research; however, midsize enterprises may find better responsiveness and pricing from smaller carriers.”

CenturyLink’s third-place average product rating was 3.3.

The Gartner report wasn’t the only bright spot for AT&T and Verizon this week. On the residential side of things, the two telcos were identified as the best bundled value in a recently released Consumer Reports survey.

Three-quarters of Verizon FiOS customers said they would purchase a “triple play” bundle of video, voice and data, while 79 per cent would add wireless service to the mix. AT&T U-verse subscribers expressed similar sentiments, with 68 per cent suggesting they would take a “quad play” package.

T-Mobile sees boost after eliminating contracts

T-Mobile’s move to a contract-free environment seems to be paying off. The wireless provider released its first quarter results this week, and says its net customer base grew by 579,000 unbranded and 3,000 branded subscribers. It’s a big increase over this time last year, when the company was reeling from the loss of 349,000 subscribers.

And the no-contract trend may be gaining momentum. Verizon CEO Lowell McAdam says that his company is open to the possibility of eliminating contracts and phone subsidies, and that a switch to a new model would be “pretty easy.” Verizon already allows customers to purchase a phone – paying full price up front – with no contract, but the company doesn’t advertise the option at the same level as its traditional subsidized plans.

Major changes to the wireless landscape seem to be on the minds of many carriers. In January, AT&T executives admitted they were considering eliminating phone subsidies in exchange for lower service rates.

Canadian merchants to charge back credit card fees?

Canadian consumers may find themselves in the same position as their U.S. counterparts when it comes to credit card swipe fees. The Consumers’ Association of Canada issued a warning this week that depending on the outcome of a decision by the country’s competition tribunal, merchants may soon be permitted to tack additional fees on to credit card transactions to help cover their own costs.

“It’ll be like striking the marketplace with lighting. It’ll disrupt the whole way that we pay for our goods,” Consumers’ Association of Canada Vancouver president Bruce Cran was quoted as saying. “Nobody knows about it but you could wake up one morning — next week this thing might be out — and you could be paying, all of a sudden, a 10-per-cent surcharge on some things. So it’s going to be a big shock.”

Merchants pay at least $5 billion in fees to the major credit card companies annually. Critics say retailers are already passing those costs on to customers, even those who pay with debit card or cash, and allowing them to charge the additional fees would amount to a cash grab.

Others, however, say merchants are being hit hard by the fees and need to recoup their costs to stay profitable.

AT&T to introduce HD voice

AT&T is preparing to start routing voice calls over its LTE network, making way for the introduction of HD voice. The news was announced at the VentureBeat Mobile Summit in California by AT&T senior VP Kris Rinne.

“HD Voice is part of our voice over LTE strategy,” Rinne was quoted as saying, adding past issues with call failure and other technical issues have been resolved. “I think we’ve taken that off the table in terms of a competitive challenge.”

But the technology won’t work through AT&T alone: Devices on both ends of the call must be equipped to handle HD voice. Sprint launched HD voice on its network last year and T-Mobile has promised its iPhone5 will soon be able to utilize the technology.