Verizon, AT&T, Others: How the Wireless Industry Changed in 2012
Everyone Makes LTE Progress
Long Term Evolution (LTE) networks offer users faster speeds and carriers more efficient and cost-effective use of their networks. Without one, a carrier is toast. Consequently, in 2012, all the major carriers made progress in covering their 3G footprints with LTE. Verizon Wireless leads the way, with LTE in 470 cities. Meanwhile, T-Mobile lags farthest behind, but in December officials announced the company is ahead of schedule and by mid-2013 will be where it expected to be at year's end.
Verizon Wireless Initiates a Shift
In June, Verizon Wireless became the first carrier to offer shared data plans. After roughly two decades of focusing on a device and pairing it with a contract, Verizon turned its focus to data buckets, from which up to 10 mobile devices can grab. Verizon officials insisted that current subscribers wouldn't be forced to use the new plans, but new customers have only a choice between the Share Everything and prepaid plans.
In August, AT&T launched similar plans, calling them Mobile Share. The primary goal of the plans for now is that more people attach tablets to them instead of relying on WiFi. The more devices people begin to attach, the more data used and the more money the carriers make. In the first five weeks that the plans were offered, 2 million users signed up, AT&T CEO of Mobility Ralph de la Vega said during an Oct. 24 earnings call. He called the uptake rate "outstanding" and said that average revenue per user on the plans turned out to be "actually higher than we expected."
T-Mobile Merges With MetroPCS
In October, the nation's fourth- and fifth-largest carriers merged. T-Mobile didn't yet have an LTE network, but MetroPCS did. The smaller carrier also brought to T-Mobile spectrum, customers and a solid position in the prepaid market—an exciting, lucrative market that grew 12 percent year-over-year while the postpaid market was flat. Together, these two are determined to grab every customer put off by the high-priced shared-data plans and looking for a bargain.
Sprint Gets the iPad
Sprint finally got the iPhone in late 2011, but it wasn't until the introduction of the iPad Mini and the fourth-generation iPad that it was able to begin selling Apple tablets—the best-selling tablets on the market. With its iPad, Sprint—the only carrier to pair the iPhone with an unlimited data plan—introduced tablet data that started at $14.99 per month for 300MB of data.
Sprint Sells Itself to a Japanese Carrier
In October, financially strapped Sprint sold a 70 percent share of itself to Japan's third-largest mobile carrier, Softbank, for $20.1 billion. Suddenly, Sprint had money to accomplish what it needed to, and officials soon announced new LTE deployments, purchased spectrum from U.S. Cellular and bought additional shares of 4G partner Clearwire, giving it the majority share.
Sprint Buys Clearwire
The majority share turned out to be not all that; Sprint still didn't have the decision-making control it needed over Clearwire's spectrum. It December, it announced plans to buy out the entire company for $2.97 a share or $2.2 billion. Sprint CEO Dan Hesse said it was critical that Sprint made the buy when it did—before Clearwire began rolling out LTE or selling off portions of its spectrum. Likening the latter's unique spectrum to a pair of shoes, Hesse said its total was worth more than the sum of its parts.
New Carriers Come on the Scene
In November, Republic Wireless began accepting customers. Looking to throw a wrench in the industry status quo, the carrier has a unique strategy that includes unlimited smartphone use for $19 a month. The fine print is that subscribers promise to use WiFi as much as possible. (When out of range, the phone defaults to Sprint's 3G network.) Additionally, there's only one phone option for now, the Motorola Defy XT. FreedomPop also introduced a home modem that offers 1GB of free 4G data use a month, via Clearwire, with a one-time rental fee of $89 for the modem.
AT&T Introduces Project VIP
On Nov. 7, AT&T introduced Project VIP, a three-year, $14 billion initiative for expanding and enhancing its networks. This included transitioning its copper-based networks to IP—a move that will force the nation to reconsider its telephone-related legislation, as current laws apply specifically to the copper networks. Consumer interest group Public Knowledge has said it hopes the new rules will be as firm as the old ones in insisting that all Americans—or 99.999 percent—have the right to telephone services at very affordable prices.
T-Mobile Finally Sells an iPhone
T-Mobile's financial woes were largely attributable to its being without an iPhone. During parent company Deutsche Bank's Capital Markets Day Dec. 6, T-Mobile CEO John Legere announced that T-Mobile will soon begin selling the iPhone and will do it in a way unlike what the industry has seen before.
T-Mobile as Disruptor
T-Mobile also has big plans to be a market disruptor, said Legere. It's going to do away with iPhone subsidies—the albatross of its peers—in a way that benefits subscribers as well. It also plans to offer only its Value Plans and to allow subscribers to upgrade at any time. "Customers are really still pissed off at the very unpredictable billing, very unclear pricing, restrictive and confusing upgrades, and unfair treatment of loyal customers," said Legere. "We think there is huge room for a challenge to change some of that in a way that the larger players will not be able to, or will choose not to, respond to."
FTC Expands COPPA
Adults aren't the only ones cruising the Web and downloading apps. Trying to keep its legislation up to date with the mobile world, the Federal Trade Commission added amendments to the Children's Online Privacy Protection Act (COPPA) that included the need for third parties to be clearer about the data they collect on users under 13. The Interactive Advertising Bureau protested, saying the FTC rules go too far and that data transfers of information in many games are "benign."
FCC Approves AT&T's Huge WCS Spectrum Buy
Wireless Communication Services (WCS) spectrum has been found to interfere with satellite radio connections, and so has been something of a dirt lot in the high-end real estate world of wireless spectrum. AT&T, however, figured out how WCS—or enough of it—might be used for LTE and went around trying to buy up as much as it could. In December, the FCC gave those sales the green light, and in 2015, AT&T plans to begin building on it. While its current network is a cobbled-together (often complained about) mishmash of spectrum, the new WCS licenses will give it an enviable swath with which to work.