Switching Cellular Services in 2021

 

It’s been over a decade since it has been propitious for me to “go mobile” with cellular services.  My household has remained with Boost Mobile because it offered the most bang for the buck with unlimited talk and texting along with a generous hotspot capability gratis.  The handsets were mostly one generation behind, but they were affordable for replacement, thus obviating the expensive and unsatisfying “phone insurance racket.”

Alas, there have been shifts in the cellular marketplace which prompt a change.  As a thrifty  android aficionado, I regretted that LG decided to leave the cell phone market in July as I owned several iterations of the Stylus.  I had not heard good reviews of the LG Stylo 6 and I hoped that its successor would be worth procuring, but in the US the LG Stylo 7 was not  to be released.  

Boost does offer a Motorola Moto Stylus 5G but it has a higher price point.   I was considering getting a Moto Power, which has most of the features, aside from the stylus and massive built in 128GB RAM, but for less than half the cost.  But handsets are not the only thing in flux.

When T-Mobile merged with Sprint in 2019, federal regulators required the merged company to spin off Sprint’s house MVNO Boost Mobile so that there would be a viable fourth major cell competitor and lessen the likelihood of monopolistic price gouging.  

After some ado, Dish Network acquired Boost Mobile and the feds required T-Mobile to provide seven years of network sharing which would allow Boost could build its own celllular network. Prior to he merger, Boost relied on Sprint’s CDMA old network; however, T-Mobile relies on GSM networks (like much of the world).   Even though the trend amongst cell providers is to create 5G networks, it takes time to transition, especially for Dish’s Boost Mobile as it needs to start from scratch.  

T-Mobile decided to scrap the old CDMA 3G networks.  T-Mobile had sought to decommission the old CDMA network by the end of 2021.  But in pointed T-Mobile press release from  October 21, 2021, it announced that it was delaying the CDMA sunset until March 31, 2022 because its partners had not sufficiently followed through on customer migration to the new network.  Boost Mobile claims the tardy telephone services are post paid and not pre-paid like Boost. 

Despite the network sharing agreement, it requires new SIM cards for Boost’s “Expanded Network” which essentially means switching to 5G capable network.  Some Boost i-Phone customers, may just be able to upgrade their SIM cards.  But for the rest of the low budget customer base, that means new handsets. Although Boost Mobile offered some discounts, they are not remarkable incentives.

Despite being longtime customers, our loyalty is being shaken by provisions when switching from Boost’s “Nationwide Network” (CDMA) to “Extended Network” (a.k.a. GSM towers).  Aside from basically requiring new handsets for Android customers, whenever a retained customer Boosts up to the new network, they must join a new plan.  

Well we have a heritage Family Plan that was grandfathered in at two lines with unlimited talk and text and unlimited (really around 32 GB) data plus 12 GB separate of hotspot data for $80 a month flat (no extra taxes or fees).  It was not clear if two person family plans are available on the “Expanded Network”.  This could mean a $20 “boost” to our bill. 

After several frustrating webchats, a Boost CSR shared a webpage which indicates that a customer can change family plans, which presumably would extend into the new Extended Network.  But this information is contradicted by fine print on Boost’s webpage and frankly many opinions which contradict each other impeaches confidence in this assertion. 

So I considered other carriers.  The major carriers like Verizon, T-mobile and AT&T supposedly have migrated away from iron clad two year contracts with substantial early withdrawal penalties (up to $350).  Instead, this system has been replaced with expensive phones with installment plans over 22 to 36 months, which makes handsets seem so much more affordable, although this is on top of the cost for your phone plan. Taxes needed to be paid up front for the full value of the handset.  Moreover, if a customer switches before the phone is paid off, their contract is only released if the balance is paid off.  On the bright side, at least one can keep the device, but at a high price.

Then I looked at the pre-paids, which are MVNOs (Mobile Virtual Network Operators), which tend to offer good value for money, albeit with some cost cutting.  These savings can derive from not having brick and mortar stores, significantly automating customer contacts, offering older model new phones or encouraging customers to bring their own devices.   Boost is an MVNO which offered curtailed customer service and prior generation devices.  Now that Boost is switching to GSM, it seems that they may be dissuading data driven current customers from remaining to bring in new blood which is interested in inexpensive cellular plans that have less data attached to it.

As this analysis is being written, MetroPCS, a MVNO subsidiary of T-mobile since 2013, has an aggressive pricing plan to lure Boost Mobile and Cricket Wireless customers by offering a $25 a month cellular plan with unlimited talk, text and smartphone data.  This is half the cost of the comparable Boost Mobile plan.  The major difference is that Boost offers a hotspot whereas MetroPCS does not. Plans with hotspots start at $50 with an additional $20 a month surcharge.

To sweeten the deal in switching from Boost or Cricket, MetroPCS offers a free phone, a Samsung Galaxy A32 which on paper has good specs (6.54" screen, 64 GB internal memory, 4 GB ROM, and a 5000 Mah non removable Lith io battery, a quad rear camera with 48/8/5/2MP).  Boost Mobile offers this for $139.  

Frankly, I have my eye on the Motorola Stylus 5G, which has 218GB internal memory but otherwise similar specs for an additional $19.99 with the switch from Boost, whereas Boost Mobile wants $199 for the same handset.

To be fair, Boost is trying to retain customers with the Celero 5G for $49 online if one is invited (actually it rings up at $89.99).  The specs look good but there are some real question marks. Even in pre-order it seems out of stock, yet Boost will immediately charge the customer. Aside from the less discounted price, the manufacturer is not known, so it is buying a pig in a poke (but from my poking around, it’s FCC filings stem from Wingtech, a Hong Kong based company).  If my memory serves correctly, some handset providers from that area had problems with customers’ personal information surreptitious being sent to the Middle Kingdom. No thanks.

Boost Mobile consistently offers contradictory information about those switching to the Extended Network both in stores, on the website and through website chats.  It seems that the emphasis is to sell new handsets, even though the mid and lower priced models are two generations behind competitors, and push their BoostUp program which effectively locks customers in for 18 months.

From a market analysis standpoint, T-mobile through its subsidiary MetroPCS is leveraging its size with loss leaders (such as heavily subsidized handsets and half priced cellular plans) to drive away Boost customers.  This move may deprive DISH Network from having ample capital to build its own 5G network during the remainder of the T-mobile network sharing.  In doing so it may stifle Boost’s nascent attempts to become a fourth major US cell carrier.  

The handsets which MetroPCS has deeply discounted may not be the latest and greatest phones, but they provide plenty of value for money for most customers.  For my desired phone, it would be $180 savings vis-a-vis Boost Mobile website (or $226 via the BoostUp option).  And MetroPCS’s  presumably temporary promotion pricing would save a consumer $720 over two years. 

It is wise to consider what features cellular plan or a handset are crucial when discerning a cellular choice.  My household has prized hotspot tethering because we are often traveling to a place that has no household internet.  That may give Boost an edge.  But there are economic alternatives.  Rather than opt for a pricier plan with MetroPCS, one account could stay with Boost and share the signal while traveling.  There are also cheap prepaid carriers which are al a carte and could be turned on and off when tethering data is needed. There might also be other ways to achieve the occasional objective.   But saving $30 a month for two years is appealing to a thrifty techie.  And good customer service is priceless.  

Why Don’t People Answer the Call to Cellular Phone Savings?

One of the costly monthly expenses for most households in America is their cellular phone bill.  The CTIA Wireless Association estimates that average cell phone bill was $47 in 2012 but many individuals pay double that amount.  The CTIA figures do not factor in the costs of handsets or choices for “reasonable” plans

Smart phone consumers comprise 46% of the market (including 66% of youths aged 21-30).    The CTIA figures do not factor in the costs of handsets or choices for “reasonable” plans.  So there may be a low cost plan, but if one is required to carry a data package, monthly costs precipitously increase.

Another reality is that the most of the major American cellular carriers push subsidized phones with strict two year agreements.  Few cellular consumers consider the overall costs incurred with such a subsidized cell phone contract.  Such customers are  are more concerned about getting what they perceive is the latest and greatest handset for a couple of hundred dollars down (usually 1/3rd of the actual cost) while paying a significantly higher amount in the monthly cellular bill then they might pay otherwise.  

Tero Kuittinen, an independent market analyst from Alekstra, notes: "That psychology has worked for hundreds of years, and it’s still working.”   Another factor to consider is the attachment that many people feel toward their cellular purchases.  AT and T retained gripping customers for years because it retained a monopoly on i-Phones, which had a less generous plan and cost more than other smartphones, but those in the Apple cult craved it.  It seems akin to the mentality which drives new car purchases that customers will overspend to get that “new car smell” for a durable that loses 20% immediately after purchase. 

T-Mobile took the lead among cell providers in weaning prospective customers from the subsidized cell phone model with their Simple Choice plan.  But an  alternate model which T-Mobile innovated but had more success in competitors emulating is the “Next, Edge, Jump” and “OneUp”.  These programs which are essentially cell phone installment payment plans.  Consumers lease a phone by paying a bit extra ($10-20 a month plus up to $10 for the privilege) for 20 to 24 months  but with the ability  to upgrade in six months to a year.  But if consumers do not “jump”, then they will pay significantly more as there is no subsidy underwriting the purchase. This sort of gimmick may have some appeal to digerati would constantly want to upgrade without being locked in a contract, even though they are effectively locked in a contract.

Alas, cell phone services are not fungible.  Aside from the handset cost, choice of carriers are impacted by coverage.  An inexpensive plan is worthless if one does not get range in one’s preferred calling area.  Verizon Wireless has the best coverage but people pay a premium for the extensive coverage.  But most customers may not need such extensive range.

Cost conscious consumers should know that they can cut their cellular costs in half (or more), by using Mobile Virtual Network Operators (MVNOs), pre-paid cell plans and fremium cell providers like FreedomPop. But the reality is that according to Ovum, only 23% of cellular customer have opted for such frugal mobile phone service. 

 As MNVOs and the ilk do not have the deep pockets for advertising, they have a dubious reputation.  In fact, when breaking up with Sprint to switch to one of its MVNOs Virgin Mobile to save half on cell costs, the customer service representative thought that it was a compelling argument to sneer “Well, that’s a pre-paid phone”.   As a customer who had been off his contract for over a year and did not need another handset, that was a less than convincing ploy. 

Usually, second tier cellular carriers offer less current handsets.  Even though these cell phones may only have been on the market for six months, finicky consumers turn their noses at these out of data handsets.  Sometimes, upgrades are prudent, such as switching from a 3G phone to one that also gets faster 4G or LTE coverage.  But when a new release is buggy, or simply has minor cosmetic changes, a savvy consumer should question whether the latest is really the greatest. Of course, with Apple i-phones, a consumer can not replace the rechargable battery himself, so it may only be good for around 18 months before starts to need replacement.

Personally, I have always considered the cellular phone plan to be more important than the particular handset.  In addition, I tend to baby my cell phone, so it has less wear and tear on the unit. But my experience switching cellular carriers from a Sprint HTC Evo with a 4.3" capacitive screen to a Virgini Mobile Samsung Victory (Galaxy II) with a 4.0" but with 4G LTE has demonstrated that the slight difference in display size impacts inputting on a virtual QWERTY.  

What may drive my decision to switch cellular companies again is whether FreedomPop allows for Bring Your Own Devices with their Freemium model roll out.  I would not buy one of FreedomPop’s outdated and refurbished HTC Evo Designs for $99 (or later $149), but I would happily switch to FreedomPop to get 200 voice minutes, 500 texts and 500 MB of data for free.  FreedomPop is relying on consumers to add on to their free base.  I might get unlimited calls and texts with a half Gig of data for $10.99.  But since FreedomPop will allow for tethering (hotspots) and they charge $10 per Gig of data, my old HTC Evo might be a supplemental hotspot for months that I need it. 

In another phase of its Un-carrier campaign, T-Mobile tried to  wreck the international roaming racket. T-Mobile stopped charging more for international text for Simple Choice customers when sending to 100+ countries.  Calls to Simple Global countries aside from the US are at $0.20 a minute.  Most importantly, there is no outrageous international data roaming charges at standard speeds.   However  there are some caveats to this International Roaming largesse.

Alas, T-Mobile considers 2G (or 128 kbs) to be an ideal speed for e-mail, social media, web pages and navigation but it such speeds would be painfully slow for graphic intensive applications.  So T-Mobile also offers three speed boost plans for international travelers.  One day of higher data speed (100 MB) for $15, one week (200 MB) for $25 and two weeks (500 MB) for $50.  This would be good for international travelers keeping in touch at home but operating on a guarded basis .  Since T-Mobile allows BYOD for GSM phones, it might pay for a traveler not taking a quick jaunt overseas to pick up an old unlocked GSM phone and sticking with T-Mobile.  Or they could just use that unlocked GSM phone with local SIM cards.  

As America enters harder economic times, more consumers may try to beat the high cost of living by answering the call to cheaper cellular services.

h/t: The Joy of Tech

FreedomPop's First Foray in Cheap Cellular Service

FreedomPop is an internet service provider started by Skype co- founder Niklas Zennstrom with a motto "The Internet is a right and not a privilege".  FreedomPop seeks to expand its reach in providing "Free access for all" with its first foray in cheap cellular phone service.

FreedomPop is operating as a Mobile Virtual Network Operator (MVNO) based off of Sprint's network, primarily using the CDMA and WiMax capabilities and eventually using LTE.  FreedomPop is structuring its consumer cellular offering on a freemium model.   A basic consumer receives 200 voice minutes, 500 texts and 500 MB of 4G data along with free calls to other FreedomPop customers for the amazing low price of free!  And there is no contract to boot.

FreedomPop's CEO Stephen Stokols proudly proclaimed that a customer paying $1,500 for cellular service could cut their bill by 2/3rds with FreedomPop.  Stokols said: "That is real value, real savings and a real meteor to the current market dynamics."

How can FreedomPop give consumers gratis basic cellular service?  The Freemium model is designed to entice subscribers to pay a little for more.   Based on its experience offering Freemium service for hotspots, FreedomPop expects 45% of its customers to pay a little more for their low cost monthly plans.   A customer paying $7.99 a month gets 500 anytime voice minutes, unlimited texting and the 500 MB of data.  A customer "splurging" by paying $10.99 a month gets unlimited voice, unlimited texting and 500 MB of data.

Another aspect of the Freemium model is engaging customers in social media.  The FreedomPop hotspots gave consumers opportunities to get more service by speading the word to their friends and participating in sponsors offers.  This is useful for customers who do not mind peer-to-peer marketing or spending their time to save money. 

Much like the shifting spectrums in the cellular communication industry, where FreedomPop will rack up fees is on data.  The basic 500 MB is sufficient only for checking e-mails or viewing static, text based websites. A FreedomPop phone consumer who opts for the Premium data plan gets 1 GB for $10 a month (first month free).  After a consumer uses their alloted monthly data, it is $0.01 a MB, or around $10 a GB. 

As an MVNO, FreedomPop is maximizing Sprint's over-capacity.  Sprint has migrated from the slower 4G WiMax  service to 4G LTE data, which allows MVNOs to utilize the inchoate WiMax mobile data until Sprint stops servicing WiMax data.  Sprint had planned to keep WiMax going through 2015, but Sprint's total acquisition of ClearWire (which provided the WiMax backbone) might change those plans.

Another means which FreedomPop offers value for consumers while providing a profit center is with the handsets.   FreedomPop is selling refurbished Sprint smartphones.  During their beta phase of phone roll-out, FreedomPop is selling refurbished HTC Evo Design phones for $99.99 (but will eventually cost $149.99)  but without contract. 

From a price standpoint, $100 for a no contract smartphone sounds like a good deal.  But the HTC Evo Design is a smartphone with 4.0" inch screen, a single core processer running Android 4.0 OS (Ice Cream Sandwich) with 3G/4G WiMax.  When the HTC Evo Design premiered in October 2011, it was a considered mid range smartphone.   FreedomPop will be selling a two year old refurbished cell phone for $100/$150 when it sells for much less on Ebay.

As a cellular phone consumer, I am not  someone who needs to have the latest and greatest handsets.  I have bought and been happy using some refurbished cellphones.  However, I am chary about paying more than street value for a two year old cell phone without new technology guarantees.  The HTC Evo Design has 4G WiMax which is fine (where available), but a cost conscious consumer should be mindful that his handset may only have a usable shelf life of just over a year, presuming that Sprint does not turn off WiMax prematurely.

FreedomPop hopes to have more handsets for sale later in 2013, some with 4G LTE data capability.  FreedomPop always intends to have a $100 handset available.   FreedomPop may allow for Bring Your Own Devices (BYOD) from Sprint.   There is some speculation that FreedomPop could follow the incremental purchase plans for expensive smartphones, like T-Mobile, AT and T, Verizon Wireless and now Sprint have done, charging perhaps $30 a month to effectively rent a handset.

Another way that FreedomPop's Phone service can offer their inexpensive cellular service is to have Voice Over Internet Protocol (VOIP) voice calls.  Some may fear that VOIP sound quality may be inferior.  However, Verizon Wireless is gearing to start switching  their voice service to Voice Over LTE (VO-LTE) in late 2014.  FreedomPop Phone minimizes data strain to their MVNO system by prompting handsets to use WiFi whenever available.

For cell phone users who are heeding the cellular call for change, if someone plans to switch to FreedomPop Phone, be aware that WiMax phones may have to be replaced in a year. If a cellular phone customer uses mobile internet for more than occasional  quick peeks on the world wide web, it would behoove them to get more data from FreedomPop, either through the Freemium offers or purchasing an additional data plan.

Personally, I would be quite interested with FreedomPop cellular phone service if they allow BYOD, as I have a perfectly good Sprint HTC Evo to use.  If I can be assured that I have hotspot capability, I would certainly pay for premium data services. 

For cost conscious cellular consumers who use little to no data, FreedomPop cellular service would be an excellent choice rather than Pay-Lo or Assurance Wireless.   FreedomPop's Premium plan would be around 1/3 of the cost of Ting's Medium Plan (500 voice minutes , 1000 texts and 500 MB data), but Ting offers excellent weekday phone support and allows for hotspots. 

Sometimes free is not always the right choice.  Determine whether one is willing to buy a refurbished smartphone for virtually no monthly cost of commitment.  Then discern what sort of mobile data usage one will be comfortable with on your cell phone.  

Cell Phone Early Upgrades– Next, Edge, Jump?

American cellular phone companies originally structured their service to entice new customers with heavily subsidized handsets in exchange for a nearly iron clad two year contract.  If a consumer wanted to ditch their contract early, they faced an Early Termination Fee (EFT) of between $175 to $350.  This EFT sought to recover losses from the subsidized handsets, but also acted as an incentive to stop churning customers.  This practice did not always settle well with consumers stuck with lemon phones or if cellular coverage was wanting so a consumer wanted to stop service

There was some legal ambiguity as to whether the EFTs were considered “rates charged” and “other terms and conditions”, which would make it subject to the Federal Communication Act and thereby preempt state lawsuits.  In 2005, the Cellular Telephone and Internet Association requested a declaratory ruling from the FCC on the matter.  Alas there was not regulatory clarity on this multi-million dollar linguistic interpretation, but many carriers started to pro-rate their fees.

In 2009, Verizon Wireless, the nation’s largest cellular provider, doubled its EFT to $350 for "advanced devices” (i.e.  smart phones), at which point the Federal Government exhibited agitation. There were Congressional hearing and the chairman of the independent Federal Communications Commission Julius Genachowski spoke about the sticker shock of EFTs and vowed to step up consumer protection about early termination fees while ensuring that carriers were adequately compensated for their subsidized handsets.

Cellular service providers got the message that both Uncle Sam and consumers were unhappy, so they figured out other ways to cut their losses.  Recently, T-Mobile tried to co-opt a European approach by not offering subsidized handsets with supposedly lower monthly plan rates.  Not being locked into a contract offers the illusion of freedom, but full freight for a smart phone can be $600 up-front and consumers could walk away with their GSM phones and go to ATT or a Mobile Virtual Network Operator (MVNO) such as Wal-Mart’s Straight Talk to get lower rates.

While many cellular consumers like the notion of not being bound by an iron clad contract, what they really want is to feed their fetish for a constantly current cell phone.  Whether a consumer is locked into a two year contract or paying the full sticker price for a smart phone, there are still ties to a handset which makes a consumer chary to switch. 

Several of the major cellular carriers are accommodating the consumer desire for constantly current cell phones with new programs.  

T-Mobile’s Jump program is a no-contract cellphone customers who pay an extra $10 a month for insurance and Jump plan participation.  T-Mobile typically runs a credit check on prospective new customers in order to determine how much of a down-payment is required for a phone purchase in 20 monthly installments on top of your phone plan (although T-Mobile stresses that everyone eventually pays the same price for the handset). But if you are a Jump plan participant, after six months a consumer can trade in an old handset and purchase another on a 20 month installments, but the consumer is no longer responsible for payments on the old handset. Of course, if a customer wants to keep the handset, he must pay the remainder of the balance of the installments.  

There are two caveats to T-Mobile’s Jump Plan.  Firstly, a consumer needs to pay the tax on the full phone (e.g. with a 6% tax a $600 phone would cost $36 tax on top of whatever down-payment is required).  Moreover, the Jump Plan trade in phone needs to be in working and in good condition. But since the Jump Plan also has built in insurance so one could make a claim with the Premium Handset Security Protection Plan and pay the up to $175 and trade in the fixed (or more likely refurbished) phone which T-Mobile returns to you.   Currently, T-Mobile is offering a zero down on many handsets (eliminating the down-payment) but check with T-Mobile to determine if this promotion is still available to you.

AT and T Next is a way for an AT and T customer to get a new phone every year. When a customer chooses AT and T Next, the price of their technology is broken into 20 monthly installments (with no finance charges).  At the time of purchase, the customer does not have to make a down-payment but must pay the full sales tax.  After 12 monthly payments, a customer can trade in his device and receive a new one, and no further payments are required on the old device and the customer starts over on a new installment plan with no activation or upgrade fee.  After 20 months, a customer does not need to make more monthly payments and the superannuated telephonic toy is yours to keep. 

For AT and T Next, a customer must remain in good standing and the trade in must be in good working condition. Of course AT and T reserves the rights to change terms and conditions.   A savvy consumer not committed to one major cellular carrier should closely scrutinize what the sticker price is on a cell phone.  Mac Rumors noted that AT and T needed to lower the monthly installment price for an Apple i-Phone 5 by $5.50 a month to undercut Verizon’s price. 

Now Verizon seeks to cut into this anxious upgrade consumer segment with Verizon Edge on August 25th 2013.  The Verizon Early Upgrade Program entails a consumer purchasing a phone on a month to month plan and the full retail price is broken up into 24 installments.  When purchasing the phone, the consumer makes the first equipment payment and presumably pays sales tax on the full retail price of the device. 

With Verizon’s Edge,  after six months, a consumer can choose to upgrade if he has paid 50% of the full retail price of the handset and returns the working handset. A consumer need not pony up supplemental cash to upgrade after making 12 monthly installments and also surrendering the device.  There are no upgrade fees or finance fees attached.   The other catch is that a Verizon Edge consumer still pays the high phone plan rate which other consumers have subsidized handsets with a two year contract.  

For the electronics addict who craves the latest and greatest technology, the T-Mobile Jump, AT and T Next or Verizon Edge might seem like an attractive offer.  T-Mobile’s deal requires insurance which costs extra but could effectively be seen as a $60 early upgrade fee.  The downside with T-Mobile’s early upgrade offer is potentially requiring a down-payment for the handset to less credit worthy customer.   Verizon Edge may allow for an early upgrade after six months, but one will wait a year of installment payments to get to the 50% sticker price which has no fees attached.  AT and T Next requires a consumer to wait for a year to get his “next” early upgrade, but AT and T has a track record of inflating the full retail price of its I-Phone and AT and T has not lowered its phone plan rates like T-Mobile so caveat emptor. 

These early upgrade programs are a good compromise which allows service providers to re-coop costs on handsets without EFTs while effectively locking consumers into relationships with cell phone providers without an iron clad handshake.  Consumers who opt into early upgrade programs can get the latest and greatest (at that moment) technology and not be stuck waiting so long for an upgrade. And these plans did not require government mandates or Uncle Sam engineering the marketplace. 

But this cell phone flexibility does come at a cost. CNET notes that a customer upgrading every year would pay $55 extra for the privilege of AT and T Next. But if a customer held on to the phone for 20 months, he paid full retail for a phone which others received as a subsidized handset.  So it is crucial for consumers using these programs to be sure that they actually want to do early upgrades.

Personally, I am more worried about having favorable cell phone plan rates and coverage rather than periodically having a shiny new telephony toy.  However, I appreciate that I am in the minority in the marketplace.  As for those who have a phone fetish to always have the latest and greatest, my tongue in cheek advice is : “Next, Edge, Jump”!

h/t: Mac Rumors
   George Washington Law Review
   CNET
   

Shifting Spectrums in the US Cellular Industry

Although the radio waves are not physically realigning themselves, cellular companies have been to stead themselves for the future.

T-Mobile, which escaped from an AT andT acquisition by the FCC blocking the merger, grew by acquiring MetroPCS.  Although the “T-Metro” merger added 9 million subscribers to the  Deutsches Telekom holding company’s 34 million base, it remains the fourth  largest US cellular company.  But size isn’t everything.

T-Mobile did not acquire MetroPCS just to grow. T-Mobile wanted the MetroPCS spectrum.  Currently, MetroPCS is a CDMA carrier.  T-Mobile plans to phase out CDMA by 2015 and migrate customers to a HPSA+ system, which is not considered problematic as 60% of MetroPCS switch handsets each year.

 But T-Mobile USA will then utilize that spectrum for 4G LTE service.  This is crucial as currently T-Mobile boasts that their plans have “Full Speed LTE *”, however if you read the fine print, it is only for the first ½ Gigabite, then the data is throttled down to "Edge"-like 2G speeds. In a data hungry consumer environment, this is not real enticing to those who have graduated from feature phones. Perhaps Metro-PCS’s could help a bit in data coverage, as T-Mobile’s data coverage is scant outside of major metropolitan areas, and who has the patience for 1G connections?

What remains to be seen is if T-Mobile USA will support the agressive Metro-PCS plan to have Voice over LTE (VoLTE). Some industry speculation is that T-Mobile USA will wind down MetroPCS VoLTE naturally over a couple of years as customers shift to GSM/HPSA+ handsets.  Then T-Mobile USA would roll out their own VoLTE platform.  But will that be too late?

The 78%  acquisition of Sprint by Japanese Softbank for $21.6 billion  was delayed until this June 2013 to allow  Sprint completed its acquisition of the remaining 50% of Clearwire.  There was a clear synergy when Sprint’s 4G service was premised on Wimax like Clearwire.  But Sprint clearly wanted Clearwire’s spectrum.  Clearwire’s bankruptcy would have forced Clearwire to auction its large spectrum holdings and left it’s partner Sprint with worthless holdings.  In an auction environment, deep pocketed cellular rivals Verizon Wireless and ATT would have cost Sprint more to acquire the up for grabs spectrum rights.  So the $7 billion acquisition cost for internet wholesaler Clearwire made sense.  Now Sprint can allocate the 160 MHz of spectrum to bolster the third ranking US cellular provider’s  LTE data roll out.  The added spectrum may allow Sprint to be a cellular mecca for truly unlimited data consumers.

One might wonder why AT and T  was willing to pay $1.2 billion to acquire Leap Wireless subsidiary  Cricket Wireless?  AT and T  had just launched IO pre-paid phone subsidiary so it did not need another Mobile Virtual Network Operator (MVNO).  Cricket only added 5 million subscribers to second largest US carrier’s 96 million subscriber base.  So why did AT and T  pay nearly a 90% premium for Leap Wireless stock?  Clearly, the answer is spectrum.  Cricket has a 60% under-utilization of spectrum.  After the FCC blocked the ATT-T-Mobile merger in 2011, AT and T was hungry for spectrum.  Sprint’s completion of the Clearwire acquisition denied other opportunities for cheap spectrum.

While it is only anecdotal, there was a marked migration from AT and T after the carrier lost I-Phone exclusivity in 2011 was data coverage.  Recent speed tests showed that AT and T’s 4G LTE network was speedier than Verizon Wireless, but Verizon’s LTE footprint is much larger.  Gaining more bandwith may allow AT and T to broaden its LTE coverage with an added benefit of gaining another prepaid distribution network.

Cellular consumer activists, such as Harold Feld of Public Knowledge, condemned the proposed AT and T acquisition of Cricket Wireless, claiming that AT and T already has enough wireless capacity and thinks that low-income and poor credit customers would be adversely effected.  Perhaps it should not be surprising in the class envy age of Obama when community organizers dictate when companies "have enough" and should pay "their fair share."  But such animus is disconnected from reality.

Carriers seek more spectrum to keep up with customer demands.  The cellular industry has shifted from stingily selling voice minutes to essentially making them ubiquitous, but carriers make their money on data.  Verizon Wireless hopes to shift all of its voice calls to VoLTE by the end of 2014 as it is a more efficient conveyance of voice calls and then use the freed up spectrum to meet data needs.

In the MVNO market, Ting, FreedomPop and TextNow are set to offer extremely inexpensive cellular service which is made possible by employing VOIP (and VoLTE) technology.  Such services are built upon the backbone of excess capacity from major carriers (e.g.- Sprint).  Certainly, community activists should take cheer from the fact that these aspiring cellular carriers allow for Bring Your Own Device (BYOD) from older Sprint smartphones with clean ESNs, which is green and cost conscious.  Walmart's Straight Talk cellular service can give a second life to AT and T and T-Mobile GSM phones and old Verizon CDMA handsets. 

Sprint owns both Virgin Mobile USA and Boost Mobile, which have full smartphone services at half of the end cost of their parent company, albeit demanding pre-payment.  Then Sprint has Pay-Lo which offers very inexpensive Voice and Texting feature phones (dumb phones)  with limited cellular web access.  And of course, Assurance Wireless  et ali. provides the Obama-phones to provide cell service to those below the poverty line.  So do-good NGOs like Public Knowledge should not be worried that the poor are being underserved by the cellular industry. 

Even as the cellular industry figuratively shifts towards data spectrum, most consumers just care about getting a new handset and give little consideration to the details of a major household expense--their cellular bill.

Scrutinizing Software Subscriptions

Adobe has announced that it will stop selling its popular Photoshop program.  But Adobe is not abandoning its Creative Suite software, it is evolving into a subscription model on the Creative Cloud.  While Adobe will continue to sell Adobe Creative Suite 6, it plans no future releases on store shelves, but one will have to subscribe on a monthly or annual basis.  Despite Adobe’s  Creative Cloud conceit, subscribers will still have to download the software and run it locally but a subroutine will check to make sure the subscription is current every 30 days. 






Microsoft started marketing in this direction with in 2011 with Office 365, which included host versions of MS Office 2010, Share Point, Exchange, Lync and Office Apps.  The difference is that Microsoft still allowed consumers to purchase the software rather than rent it. Microsoft’s office productivity software does not have as many third party plug-as as Adobe Photoshop and Illustrator. 


Adobe offers an array of pricing, depending upon which version of Abobe Creative Suite Sofware one currently owns, how many Creative Cloud programs a prospective subscriber wants to use, whether one springs for the annual payment and if you are a student or educator.  It is reasonable to expect that a consumer will pay $30 a month for the privilege of using Adobe Creative Cloud Photoshop software or $240 per year.  But by paying full freight of $50 a month or $600 a year, photogs get access to the newest versions of Photoshop, Illustrator, Lightroom, Dreamweaver and Premiere Pro

It is a reasonable surmise that most software consumers upgrade every three years, either prompted by an update with killer new features or in conjunction with an Operating System upgrade.  Keeping this informal update cycle in mind, a dedicated Adobe user would pay slightly more on a three year basis for the sticker price for the current price of Adobe Photoshop and have access to many other creative suite programs and have immediate updates.  This sunny scrutiny ignores that few individuals actually pay the MSRP for software, as there are upgrade discounts, volume discounts etc.  If one opts for a month-to-month payment plan, the frugal consumer inclinations are costly and will cost around 1 ½ times the cost of a current version of Photoshop.

It should be noted that Adobe is not going entirely in the software subscription track.  Adobe Photoshop Elements and Adobe Lightroom will still be sold.  But both of those products are geared for consumers and certainly would not be suitable for professionals and may seem inadequate for the prosumer market.

When a consumer discontinues an Adobe Creative Cloud subscription, their handiwork does not disappear, but they lose access to the web storage and they become unable to further edit their photos.  

Other technology companies are trying to change their payment model.   Xanga is a social media/blogging site which has operated on a Freemium model since 2000.  But in June 2013, Xanga announced that it needed an infusion of $60,000 in cash from Xanga-philes and if it survived in six weeks, that it would evolve into a pay $48 a year to blog hosted on Wordpress with an ad free experience .  While many appreciate the community that Xanga has fostered, it is unclear if this tactic will work and how many Xangans will remain, since there are so many free social media sites nowadays.

 T-Mobile is trying to wean cell phone subscribers from expecting a subsidized handset in exchange for a two year iron clad contract, but no contract T-Mobile subscribers get to own a shiny new telephonic toy with their “subscription”.  T-Mobile tried to capitalize on its synergy as a GSM based carrier to try to poach former AT and T i-Phone users with their Unlocked and Unlimited campaign.  Adobe Creative Cloud subscribers get nothing tangible for their subscription aside from 20 GB cloud storage, immediate access to new apps along with the privilege of using Photoshop et ali. The tangible part of technology may make the difference.  If Adobe was offering true cloud computing, it might make a cognitive difference as you are being licensed for a cloud service.  But as it stands, subscribers  still needs to load Adobe programs onto the computers where they want to use the Creative Cloud, but have no expectations of ownership.


Another wrinkle about switching to a software subscription model with Adobe’s Creative Cloud is that there may not be future version numbers or spotlighted updates.  Since Photoshop is complex software for serious photographers, it takes time to educate an Adobe user to fully exploit the imaging software.  It is unclear how Adobe will educate users with software prone to be instantly updated.

As Adobe Photoshop is an expensive piece of software, its market niche is professionally driven with some prosumer outreach.   Professionals swear by Adobe Photoshop and be resistant to switch from the tried and true unless Adobe outprices itself or the software abilities denigrate.  Shutterbugs who are not professionally invested in Adobe Photoshop may find the monthly or yearly fees may start to find other photo-editing alternatives like ACDSee or Corel PaintShopPro, both of which can work with RAW photos. 

Photoshop fans who are upset about the Adobe Creative Cloud software subscription have organized an online petition which has gathered over 35,000 signatures in protest.  New York Times Technology Reporter David Pogue believes that the protest is an effort in futility because Adobe will make money off of the software subscription scheme, even if it loses customers as it banks user fees on a monthly or annual basis and precludes some Photoshop users from skipping a version upgrade.

While photography is an enjoyable avocation for me and its results are useful when blogging, I would balk at paying $30 a month for the privilege to use Adobe Creative Cloud software.  Adobe’s decision to change to a subscription software model makes me appreciate choosing to familiarize myself with other photo editing software.  It will be curious to see how the photo editing software market reacts when Adobe’s subscription only model goes into effect. 
 

Patching Over the Disconnect on Cell Phone Savings

After becoming fed up for a high cell phone bill, I researched strategies when issuing a Cellular Call for Change in saving on mobile telephony bills.  Granted that people have different needs and one plan does not fit all.  But while the notion of economizing on cellular charges has an abstract appeal, many are called but few choose to mitigate mobile communication costs. 

It was clear that one impediment from consumers heeding a call for cellular change was the US cycle of receiving subsidized handsets in exchange for an iron clad two year contract.  Someone was interested in upgrading their iPhone 4S to an iPhone 5.  The cellular customer would likely stay with Verizon because of their excellent coverage but she is pressed to upgrade as there is only a limited period that the “new every two” is applicable. 

Sometimes, the desire for a shiny new techno-toy overrides everything.  A nephew got tired of using his feature phone to text so he wanted to splurge on a Google Nexus 4 from T-Mobile.  But in order to satisfy this techno sweet tooth for Android Jelly Bean meant walking away from a grandfathered $25 per month pre-paid plan through Mobile Virtual Network Operator (MVNO) Virgin Mobile.  After the sugar rush from Jelly Bean, he may be surprised that not only did his monthly bill double, but he also is responsible for taxes and fees which often add an additional 20%.

Another friend who would be  inclined to economize on cellular costs feels that switching cellular providers is impossible because of the family plan.  Nights and Weekend and mobile-to-mobile minutes cut down on metered usage.  And big buckets of shared data has a mystique.  Sprint prides itself on truly unlimited data.   But how many cell phone users consistently stream Titanic on a 4" screen?  It might well be cheaper to get separate plans with an MVNO but it pays to check your usage yourself first before switching.

There is a strange bias in the cellular industry about prepaid plans, which is epitomized in a mock Apple i-phone ad.  Sprint’s Customer Retention Represenatives employed a  strange selling point when trying to break up with them as they denigrated Sprint’s own MVNOs of Virgin Mobile and Boost Mobile as being “just a prepaid plan” was supposed to be a selling point, when those MVNOs could cut my bill in half.   In response to this built up consumer bias, some prepaid cellular providers like Cricket Mobile have migrated away from branding their handsets so that others do not look scornfully at their consumers.

As I was migrating to Virgin Mobile , my beloved wife hesitated because of her love of a sliding keyboard smart-phone.  Some MVNOs like Boost Mobile and Ting (both running off of the Sprint network) allow for Bring Your Own Device (BYOD) but  that “white list” can be short list as new phones are excluded. Alas, sliding keyboard smartphones have gone out of vogue so she will either have to adjust or lovingly cradle her handset for the foreseeable future.

Aside from overcoming the unwarranted bias against prepaid plans, stifling the urge to get new subsidized phones in exchange for a two year contract and feeling that a consumer NEEDS to have unlimited minutes, the wise cell phone shopper should discern what they need based upon experience and inclinations.  If you have to have coverage everyone, then pay a premium for Verizon’s excellent cellular coverage.  If you find that you unlimited data is sine qua non, then look to Sprint,

Other carriers claim that they have unlimited data but they have different understandings of the concept than a plain reading of the words. For instance, T-Mobile’s base smartphone plan touts “Unlimited Data at 4G speed”.  But in smaller print, this unlimited 4G data is only for the first half gig, after that you are governed down to 1G speed (more or less 128kbs.   For comparison purposes, think back to dial up internet, where you could surf via telephone at 54 kbs.  Today, it might work at a plodding pace for e-mails, but forget about downloading graphics much less video. 

There are some new and lesser known cell providers which might be the right choice.  Ting is a cellular phone service by Tucows using the Sprint network has a pay for what you use approach and they allow customers to have multiple devices on the same account and to use use old Sprint devices.  Another attractive feature is bundling in features like HotSpots gratis, while other carriers charge a premium (e.g. Sprint charges $19.99 for 2 GB Hotspot).  








FreedomPop is another prospective MVNO celluar provider which operates on a “Fremium” model.  When FreedomPop launches its phone service in August or September, they will offer 200 voice minutes, unlimited texting and 500 MB of data for FREE.  Moreover, FreedomPop will allow customers to use old Sprint phones.





 How can FreedomPop expect to charge nothing and give away their base plan?  They have found with their mobile hotspots and wireless home internet that about 40% of their customers pay for some upgrades.   FreedomPop’s calls will be made using 3G VOIP, which should have good sound quality.  FreedomPop’s Freemium model also relys upon social networking for advertising, so customers can earn more data or minutes by taking surveys or recommending friends.  FreedomPop also economizes by not having humans staffing their customer service outreach.  


Several parents in “my circle” have considered getting their tween children cell phones to keep in touch after school etc..  For techie involved parents, Kajeet might be a good provider.  Kajeet is a Sprint based no contract MVNO created especially with kids in mind with plenty of parental controls.  While Kajeet offers pay-as-you-go plans which start at $4.99, a worried parent might want to get the $24.99 plan, which includes 300 anytime minutes a month, unlimited texting along with a GPS locator.  The GPS Phone locator allows parents to find their kids at any time, as well as allowing parents to schedule e-mail updates on their childrens’ whereabouts.  Kajeet allows for BYOD but only for Sprint phones.   The fine print indicates that Kajeet adds a 10% transaction cost to all service plans supposedly to defray administrative costs. 

Another approach for kid communication might be thru a PayLo plan from Virgin Mobile, which can be as low as $20 a month for 400 minutes, but texts are 15 cents each and very expensive web access at $1.50 per MB.   The PayLo $30 plan has unlimited calling and unlimited messages but the very expensive $1.50 per MB for internet.  Frankly, it would make more sense to go with a low end Virgin Mobile plan which offers 300 voice minutes, but unlimited texts and unlimited internet (but after 2.5 GB, the user is throttled back to 3G speed).   Virgin Mobile USA does not allow customers to port their phones.  Most of Virgin Mobile’s  non-subsidized phones are popularly priced (as they are older handsets) but they are currently offering their non-contract  i-Phone 4S and i-Phone 4 (selling for $382 and $279 respectively).

A Cellular Call For Change?

An important aspect of living in the Twenty-First Century is mobile communications.  Many have severed their ties to landlines.  People use the internet for e-mail, entertainment, information and productivity.  And cellular telephony allows people to take their pocket computers disguised as smartphones everywhere, with the expectation that the devices can be used ubiquitously.

Although the advances in electronics allow for incredible capabilities, the reliability is not perfect and seemingly every option of cellular providers has some disadvantages.


The American mobile telephone market has been dominated by a couple of corporate carnivores spawned from the breakup of Ma Bell in 1984.  Verizon Wireless (comprised of Baby Bells Bell Atlantic and NYNEX) and AT andT Inc (which started out as Southwestern Bell, but gobbled up Bell South, AT and T, Ameritech and Pacific Bell et ali).  



The nation’s third largest cellular telephony provider is Sprint, which started to deliver long distance as part of Southern Pacific (Railroad) Communications in 1978.  Sprint grew through successful  mergers with GTE and Nextel and soon be bought by Japanese Softbank.  The last of the big four cellular companies is T-Mobile which is a holding company for Deutsche Telekom AG.  The US Department of Justice blocked a merger with AT and T in December 2011.  Now T-Mobile is in process of acquiring MetroPCS.  

This colorful corporate history of American cellular companies can offer a bit of perspective on the carriers.  Verizon’s and AT and T’s lineage stem from Ma Bell.  It is not coincidental that Lennie Bruce once likened communism to being like a big phone company, as an all powerful Leviathan is not known to be responsive to consumers or have competitive tendencies.  Sprint has cobbled together disparate technologies (CDMA, iDEN) and is trying harder but does not have the leverage to break out of the third place showing.  T-Mobile’s European parent may influence the GSM technology (the international standard technology) and it explains why T-Mobile was the first cellular company to try to stop subsidizing handsets which required a two year contract. 

To compound confusion on choosing cellular providers, there are Mobile Virtual Network Operators (MVNOs) which are companies that do not own radio spectrum or wireless network infrastructure but still can provide service by piggybacking on other cellular network’s overcapacity. In the U.S., these are generally prepaid plans which offer more economical rates without some of the frills that customers locked in a contract have.  For example, Virgin Mobile (a wholly owned subsidiary of Sprint) can offer a generous 1200 minutes a month for $45 with unlimited 3G data (and 2.5 GB full speed 4G data) and texting.  But a similar Sprint plan costs $20 more, but includes free nights and weekend voice minutes and unlimited data and texting.

It is unwise to think that there is only one answer for everyone on choosing a cellular provider.  Cost can throttle choice.  Coverage can vary widely.  People also use their phones differently.  The best advice is to know yourself and investigate thoroughly.




So many people are seduced into being locked into a carrier with the “New Every Two” mentality.  While wear and tear and technological improvements can make this replacement cycle appealing, the shiny new “toy” comes at a cost of another two year commitment and possible changes in contractual terms.  A couple of years ago, AT and T alienated I Phone owners by altering the “all you can eat” data plans.  New customers had a cap.  Some old AT and T I-Phone customers  also complained that when they wanted to upgrade that their grandfathered unlimited data plans not convey.  

One other calculus which consumers need to consider is convergence.  Cellular technology can act as a phone, a credible camera, a GPS system, a reading device, a mobile computer etc.  When calling for a cellular change, the savvy consumer will explore how his chosen plan and his handset can take advantage of convergence.  For example a usable hot spot capability can connect a laptop or a tablet making a separate device a redundant expense. 

Verizon has the best voice and data networks, but you pay a premium for that privilege and it is notorious for extras (e.g. texting and data tiers) and some hard nosed business practices.   AT and T used to have an I-Phone monopoly which has ended, but they brag that they have the largest 4G network (though AT and T is storied for complaints about coverage).   The big two’s data advantage might increase as they have leverage over low band WiFi. 

T- Mobile used to be know for their calling circle promotion.  Now they want to be considered the Simple Choice, which is an option to stop subsidizing phones in return no contracts and lower monthly costs.  But their network is spotty outside of major metropolitan areas.  Perhaps the MetroPCS will increase their network’s footprint.   

Even though Sprint completed its acquisition of Clearwire (which provided their 4G WiMax data), Sprint has declared that it will fully convert to the US standard of 4G LTE.  Which means that even the best cared old Sprint handset will need to be replaced to get 4G coverage.  But Sprint has been slow in rolling out the LTE by not making promised deadlines.

Personally, my household has been a contract customer with several of the big four cellular carriers, but we dote on the terms of the contract and will not take the phone upgrade temptation track.  As the market has changed, I am developing an openness to pre-paid models that have lower monthly costs but lack the subsidized phone.  Recently,  I was almost ready to switch, but I noticed that my chosen MVNO had a limited selection of phones which had LTE capability.   While I was willing to wait for LTE to officially arrive shortly in the District of Calamity (sic), the limited phone choice prompted me to investigate further.  

It was a good thing that I studied the details, as the only LTE phone did not provide a hotspot option, which was a deal breaker for me.  I was willing to pay $15 a month for a Hot Spot with 2.5 GB full 4G LTE, as I could drop a NetZero low capacity Hot Spot and get better service.   This plan has not been ruled out but tabled for better choices.

In the cellular industry, things can change pretty quickly.  It may be that Amazon puts out a Kindle Phone in which Amazon acts as a MVNO.  Like the Kindle, Amazon may sell their devices at near cost and bank on the ease of future purchases through Amazon to pull out the profitability.  This option is appealing as Amazon’s customer service has been top rate (unlike certain phone companies) and my prior Kindle ownerships have hooked me into their system.  But opting for Amazon would still require scrutinizing the calling plans and handsets and correlating  hem to my household’s needs. 

Choice is great but it can be confusing and requires some sacrifices.  Then again, there’s always  the  Obama phone.  

But Lifeline program is rife with abuse and Congress is considering cutting back on the program, which has tripled in size since 2009 to cost $2.2 Billion per year.   Considering President Obama’s troubles with surreptitiously seizing phone records of scores of Associated Press employees, cutting back on the Obama phones might be prudent.