South Central Wireless Bites the Dust

A few days ago South Central Communciations (SCC) of southern Utah stopped offering cellular service. This means their customers have been set free and their employees have gone home. SCC operated a good network and they were the only cellular service in several remote corners of Utah. Their Internet, phone and video services continue to operate as usual.

It'ss distressing that SCC could find no takers for their wireless network...it looks like they couldn't give it away. This did not come as a complete surprise as South Central notified their 7,000 wireless customers in advance and helped them switch to another wireless carrier. Part of that assistance was keeping those towers where they were the only cellular service in town operating, with the assumption that their CDMA operating partners (Verizon, Sprint, etc.) can still roam on those towers. Who operates those towers now and in the future is not clear.

This may reflect the plight of small carriers all across the US, even those with other strong communications departments. So far we haven't received any official announcement from SCC. Most of our information comes from those directly affected by the changes. This reduction in service also affects some of the tiny carriers in Utah and surrounding states that helped each other with intersystem roaming, and will affect our coverage maps for those systems. We will release additional information as we get it.

Chicago Loves US Cellular

Chicago is the largest city in the US Cellular network and residents of the Windy City should consider themselves lucky. They are among the ones who can choose US Cellular as their favorite carrier, and many of those that have, love it. By the end of this year, US Cellular will offer 4G over much of its network with a whole bunch of new Android devices.

It's great to see a company that is pretty much ignoring the inroads of the larger cellular carriers and making wireless user-friendly and competitive in several US markets. There's no reason to avoid US Cellular and they can only lose to the louder markeing efforts of the larger carriers. Winning rave reviews at Mountain Wireless, in consumer magazines, and among savvy users, is no small fete. With 98% of their network already 3G, with 4G right around the corner, Chicago-landers, and all users in US Cellular markets are lucky indeed.

While the financial winds may not be blowing in their favor, the owners of US Cellular are treating their network like it will operate independently forever. Considering that the Carlson family still enjoys the job, it just may. Enjoy it while we can.

Are Your Wireless Costs Going Down?

In response to fears that wireless prices will rise after the AT&T/T-Mobile merger, Ralph de la Vega, CEO of AT&T Mobility, responded that after 5 big mergers in the past 10 years, "Telecom prices have dropped by more than 50 percent." and that "AT&T's price for one megabyte of data has dropped by 90 percent over the past four years." He added customers are paying more because they're using more. So it was time to get out my calculator.

Most members of my family are not big wireless users and the cost of a minimum number of minutes over the past 5 years has risen from $30 to $40. Adding a few useful App's has added an additional $2 to $6 a month. These Apps formerly just used minutes, now they're a separate charge. Next is the use of data. Data was also allowed at a per minute rate but are now charged in blocks from $2 to $60 per month. How about 411 calls? They were once .69 per call, now they can be $2 each.

I agree we are using more Apps and other services but the carriers have found a way to make more money from our desire to choose other than just chocolate and vanilla. Those of us at the bottom of the wireless food chain who take small bites of these additional services are now easily paying more than double what we were paying as few as 3 years ago. Our prices have not dropped 50% even though our usage has changed very little. Of course, those of us using gobs of broadband are indeed watching the price drop, but it's competition that's keeping these top-paying customers around. By my calculations, the lower and middle classes appear to be paying 50 to 100% more.

Where is Ralph getting his data? By looking at the bills of his top wireless users? We'll do what we can: watch for more articles here on how to get your wireless costs back under control, hopefully with a choice of 4 major wireless carriers in the years to come.

AT&T's Full Court Press

This past week has been a busy one for AT&T in their efforts to gain Federal approval of their acquisition of T-Mobile. As expected, AT&T is applying pressure for the deal, and other entities are d0ing what they can to oppose it. Here are a few highlights:

• Several states, including California, have started a 'review' of the deal. They can't stop the deal but they can ask the feds to do so.


• AT&T gained (strong armed?) the support of a handful of state governors in favor of the deal, uh, all are Republicans except one. Who's getting the most new cell sites this year?


• Support comes from the AFL-CIO who might assume that T-Mobile employees would need to become unionized as AT&T employees. What are the chances anyone from T-Mobile will actually wind up working at AT&T, or even in the wireless business?


• AT&T had the great timing to apply for additional 700 MHz spectrum. Why would they need additional spectrum if the T-Mobile deal will provide them with "enough?"


• AT&T has over 100 registered Washington lobbyists. 'nuff said.


• While Congress has no direct role in approving the acquisition, some members have stated extreme opposition with words like, "I see no redeeming reason” for federal regulators to approve the transaction, "Not one."


• (Added at 4:15pm ET) The FCC has requested that AT&T must show why there is a need for so much additional spectrum and 49 other questions like how many "thousands of jobs will be created by the acquisition." This should lawyers in clover for months.

We expect this to actually become humorous as we hear even more extreme positions. I'm waiting for Sarah Palin to chime in, "Don't all the phones belong to AT&T?" You watch.

The End of the Regional Plan

Everybody wants their wireless phone to have National coverage even if they never stray more than 100 miles from home. We want what we want, not what we need. During last week's Senate hearing for the AT&T/T-Mobile acquisition, it was brought out that AT&T competed with various wireless carriers at the local level providing a significant level of competition. The CEO of Cellular South, a carrier based primarily in Mississippi, argued that all cellular is now national based on customers no longer buying Regional plans. All carriers compete nationally and that puts smaller carriers at a disadvantage.

I checked with the top 15 wireless carriers and found that indeed none of them offer Local or Regional plans any longer. Too bad. That was a great way to save on a wireless plan when your carrier needs to pay fewer roaming charges. Nobody cares. We all want universal coverage.

Among the smaller carriers, "Unlimited" and "Data" plans are usually limited to a certain coverage area, either to their own network, or to that of a 'preferred' roaming partner's network. As an example, nTelos, a regional carrier based in Virginia and surrounding states shows their voice coverage with a map of the US with most of the country colored in. If you select "Data" or "Unlimited" services you get a very different map. You get what looks like the Sprint network map, shown here. Yes, it is not Regional, but it isn't quite National, either. It's OK if it works for you.

Many of the Unlimited wireless operators offer a value-priced plan with limited coverage, but even then, they normally need to include adjacent areas. There's no more interest in Regional and Local plans. After all, we want what we want.

What Happens to Sprint?

Dan Hesse, CEO of Sprint/Nextel testified last week before the Senate committee investigating the AT&T/T-Mobile acquisition that if the deal goes through, Sprint will become a takeover target. Of course our biggest fear is that Verizon Wireless will be the most likely acquirer. But political winds just may prevent that from happening. So, who gets Sprint?

Bloomberg Business reported Monday it will most likely be CenturyLink. CenturyLink is the 3rd largest wireline player and they need a wireless outlet and they have the money. This leads us to question why can't Centurylink be the knight in shining armor to ride in and pick up T-Mobile?

A review of T-Mobile's part of the application to the FCC gives a strong clue. T-Mobile wants to remain a strong wireless player in the world and intends to improve their global position not just with the $39 Billion that AT&T will give them, but also with the 5% ownership stake in AT&T with all the technical and financial perks that come with it. T-Mobile doesn't want to become the wireless arm of a smaller wireline company, they want a piece of the action at the Big Boys table, and hooking up with AT&T gets them admission to the Big Game.

The good news is that Centurylink would probably be a good steward of Sprint's spectrum and could be a good value among wireless players. Centurylink's pricing philosophy follows an 'everyday low prices' avenue and may set its pricing to more compete with MetroPCS and Cricket. It will take time for conditions to be ripe for anyone to acquire Sprint, and in that time it might, gulp, be financially prudent for Sprint to make a few acquisitions of their own. Say it isn't so.

T-Mobile Needs to Be Sold

OK, here I am jumping over to the other side of the fence. As much as I do NOT want just 2 big wireless carriers in this country, T-Mobile's demise may be inevitable. Their owner, Deutsch Telekom, wants out of the business in the US and AT&T may be the only possible buyer. We can't force Deutsch Telekom to keep the business intact (although $6 Billion in AT&T penalty money might help), so who, if not AT&T?

Sprint hasn't got the money to pay what AT&T is offering and the funds necessary to convert the network to CDMA. It's the same story for the next 2 largest carriers, MetroPCS and Cricket, both CDMA carriers. US Cellular is another company on the edge and can't buy it without giving up the company's unique ownership structure, and smaller carriers can't count their funds with a "B" in front of their "-illions". Selling off in pieces would still probably go to the only players able to afford "pieces."

That leaves the foreign carriers like China Mobile, Telefonica or the richest man in the world, Carlos Slim, owner of America Movil, parent of TracFone and Mexico's TelCel. Would these companies be more likely to gain approval than AT&T? What would stop a German company from selling to a Mexican company? A few dozen AT&T lobbyists, maybe? This may be the story of one Mexican being asked to please cross the border.

Sprint Will Pay Your ETF

Sprint is offering up to $175 to customers who switch from other wireless carriers. The credit will "give customers a chance to try Sprint without having to worry about fees or charges for terminating their contracts with their current carriers," Sprint spokesman Lloyd Karnes said in an e-mail. The offer is $175 for business customers who switch and buy any Sprint phone; $125 for individual customers who buy a smartphone; or $75 for individuals who buy a low-end "feature phone."

To get the credit, accounts must be ported from existing contracts, and they must remain active for 61 days. A two-year contract is required. The offer began May 4, Karnes said, but it wasn't widely reported until Thursday, when blog Spantechular posted an "ad." The blog said Sprint was targeting only T-Mobile customers, but Karnes said the offer is valid for those switching from any rival carrier. Sprint's consumer offer is good until June 23, and the corporate offer runs through July 23.

Sprint has offered credits like this before, but they don't deny that the looming merger helped inspire the timing of this promotion. We would have hoped they would offer the average wireless user more, but with pro-rated ETF's, it may be worth it. Actually, after listening to Sprint CEO Dan Hesse at the Senate hearings, they should be encouraging people to join T-Mobile. Hesse called T-Mobile a partner in the trenches against the Big 2. He wants T-Mobile to survive. So do we, but we'll explain why they may not be able to on Monday.