An Ignoble Experiment

2. BlackBerry Z10 sales get off to slow start at AT&T

T-Mobile USA officially unveiled a key part of its new "Uncarrier" strategy by releasing new pricing for its Value plans (which do not include device subsidies).

The plans break into three options:

$50 per month for unlimited talking and texting and 500 MB of high-speed data. Smartphone hotspot service is included. Speeds are slowed to 2G speeds after 500 MB.
$60 per month for unlimited talking and texting and 2.5 GB of high-speed data. Smartphone hotspot service is included. Speeds are slowed to 2G speeds after 2.5 GB.
$70 per month for unlimited talking and texting and unlimited high-speed data. The plan also includes 500 MB of smartphone hotspot service, with additional data costing extra.

T-Mobile's pricing for families follows a similar pattern. Customers can add 2 to 5 lines of service, and can then select among the 500 MB, 2.5 GB and unlimited data options. The full data allotments are available to each line of service--a notable difference from the shared data plans from AT&T and Verizon, which require family members to share the same pool of data.

As for T-Mobile's network management policies, the carrier said "data traffic of postpaid plans with limited high-speed data allotments greater than 2 GB will be prioritized over other currently offered plans during periods of congestion. Service may be slowed, suspended, terminated or restricted for misuse, abnormal use, interference with our network or ability to provide quality service to other users, or significant roaming."

The carrier made the new plans available on its website yesterday, Just ahead of a media event scheduled for tomorrow in New York City where top executives will likely fill in the details on the company's plans to shake up the industry with new pricing.

T-Mobile's new Value plans are in line with earlier leaks to the website TMoNews.

The key element of the plans is that they do not include traditional subsidies, since customers are not required to sign a long-term service contract. Instead, customers can either buy their smartphone outright for the full cost of the device or they can make a down payment and then pay for the remainder of the cost of the device in monthly installments.

For example, a customer could pay $550 for the full price of a Samsung Galaxy S III, or make a down payment of $70 and then make monthly payments of $20 per month for 24 months. Or a customer could pay $360 for the full price of a Nokia (NYSE:NOK) Lumia 810, or walk out of the store with the phone for free and make monthly payments of $15 per month for 24 months.

T-Mobile's new plans undercut those of its rivals, especially Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T) Mobility. To get unlimited voice and texting and 2 GB of data for a smartphone on Verizon's Share Everything plans costs $100 per month; on T-Mobile it's $60 (though without the monthly cost of a smartphone payment).

T-Mobile also continues to offer its bring-your-own-device plans.

Interestingly, T-Mobile will reportedly continue to offer its traditional Classic plans with device subsidies at third-party retailers like Best Buy, Target and Walmart. That decision is being made because apparently those retailers cannot support T-Mobile's billing system that allows customers to pay the full cost of a device upfront or pay off the cost a device over time. T-Mobile has not confirmed those details.

For more:
- see this T-Mobile site
- see this TMoNews article
- see this The Verge article
- see this CNET article

Related Articles:
Report: T-Mobile will offer rate plans with handset subsidies through third-party retailers
T-Mobile to unveil new 'Un-carrier' strategy at March 26 event
T-Mobile to launch LTE in March, updates Galaxy Note II for LTE
T-Mobile loses 515,000 postpaid subs in Q4, sets sights on iPhone, MetroPCS deal
T-Mobile to offer unlimited prepaid data for $70 per month

Read more about: pricing, Value plans
back to top

This week's sponsor is IEC 61850 Europe 2013.

Further information can be found at: www.iec61850-europe.com

By Phil Goldstein

Comment |

3. MetroPCS: We have no other buyer but T-Mobile

Sales of BlackBerry's (NASDAQ:BBRY) flagship Z10 smartphone got off to a relatively slow start over the weekend at AT&T Mobility (NYSE:T) stores, according to analysts and media reports, but Verizon Wireless (NYSE:VZ) and T-Mobile USA will also start selling the phone by the end of the month.

AT&T is featuring the Z10 on its website.

"This morning we visited and called stores to survey early demand for the BlackBerry Z10," said Hudson Square Research analyst Daniel Ernst on Friday. "We found no lines, no signage announcing the launch and clerks told us they had very few pre-orders."

AT&T started taking pre-orders for the Z10 March 12 and began selling it in stores Friday for $199.99 with a two-year contract. The touchscreen Z10 is the leading edge of BlackBerry's attempt to regain market share with its new platform, which has numerous new software features designed to appeal to both existing BlackBerry users and new customers, many of whom may have switched from BlackBerry to smartphones running Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS.

According to the Wall Street Journal, when a customer asked to see the Z10 at an AT&T store in downtown San Francisco, a retail sales representative had to get the device from the back. The Z10 was not put on display at the store's opening because of trouble in setting it up, a store employee said, according to the Journal.

A BlackBerry spokeswoman did not immediately have a comment. An AT&T spokesman declined to comment.

There are several reasons for the sluggish traffic. One is that AT&T had been taking pre-orders for 10 days, which might have cut down on lines. Another is that BlackBerry is putting a great deal of emphasis on the enterprise market, which would not necessarily translate into long lines at retail stores. Additionally, the Z10 is not an exclusive device to AT&T, which likely led to less prominent displays at stores.

"I think the U.S. will be a challenge for BlackBerry more so than some of the countries where they have already launched," Morningstar analyst Brian Colello told Reuters. "The momentum for iPhone and Android is too strong here. I still think they can win over some enterprise users, but the U.S. is a country where BlackBerry's brand has been greatly diminished."

Research firm comScore found that BlackBerry captured 6.4 percent of the U.S. market in December 2012, down from 8.4 percent in September 2012.

Other analysts were more optimistic. "Our conversations with store representatives indicated some stores saw good demand while others saw limited traffic though overall discussions support our view that Z10 sales were solid within its target consumer installed base," wrote Wells Fargo analyst Maynard Um. "Based on units received by each AT&T store we checked, we believe Z10 shipments could be above our 115k units per launch carrier assumption we initially calculated for the February quarter. This excludes shipments to retailers such as Best Buy, which we believe also saw solid sales."

BlackBerry CMO Frank Boulben told FierceWireless Friday that the company is confident in the support it will receive in terms of marketing at the retail sales level from U.S. carriers. BlackBerry's own TV commercials for the Z10 started airing this weekend and commercials from carriers will be coming in the next few weeks.

"You need a very comprehensive training effort and I'm pleased to report we've done our most comprehensive training program ever with the U.S. carriers," Boulben said.

BlackBerry is also doing something aggressive in its "real-time marketing campaign." According to Forbes, BlackBerry has been working with advertising agency BBDO and several digital agencies from within Publicis group like Razorfish on a campaign to "take over" consumers' PC desktops and iPhone and Android screens to showcase specific features of BB10. The mobile takeovers will start this week.

"I expect [buyers coming from other platforms] to be a substantial minority of sales in every market and I don't see why the U.S. would be any different," Boulben noted to Forbes.

For more:
- see this Reuters article
- see this WSJ article (sub. req.)
- see this separate WSJ article (sub. req.)
- see this Forbes article
- see this ZDNet article

Read more about: Smartphones
back to top

By Phil Goldstein

Comment |

4. AT&T doubles number of Digital Life launch markets to 15

MetroPCS (NYSE:PCS) reiterated its call to shareholders to approve its merger with Deutsche Telekom's T-Mobile USA, arguing that no other company has emerged since last fall to make a counter bid for the company.

MetroPCS has pleaded with its shareholders over the past several weeks to approve the deal when they vote on the transaction at a meeting on April 12. Meanwhile, minority institutional shareholders, including P. Schoenfeld Asset Management LP, whose holdings represent about 2 percent of MetroPCS shares, have said that the deal is unfair to MetroPCS shareholders. The wrangling with the shareholders is significant because the deal has received approval from all the necessary federal regulators and now only needs shareholder approval.

"No other bidders have emerged in the five months since the proposed combination was announced," MetroPCS said in a letter sent today to shareholders, adding, "The proposed combination is the best alternative for MetroPCS to maximize stockholder value." T-Mobile and MetroPCS announced their deal Oct. 3.

P. Schoenfeld Asset Management sent its own letter to shareholders Friday, arguing that MetroPCS CEO Roger Linquist and Kevin Landry, one of MetroPCS' directors, should resign if the deal is voted down. Schoenfeld issued a white paper earlier this month detailing why it believes the transaction is poorly structured and should be voted down. That view has been echoed by Paulson & Co., run by billionaire hedge fund manager John Paulson, which holds a 9.9 percent stake in MetroPCS and is the company's the largest single shareholder.

"Over the past several weeks, a dissident stockholder, P. Schoenfeld Asset Management LP ("PSAM"), has repeatedly painted a grossly inaccurate picture of the proposed combination, including the report they issued on March 18, 2013," MetroPCS wrote in the letter. "Do not allow the embellishments of this dissident stockholder pursuing its own agenda to distract you from the important and compelling facts of this proposed combination."

Under the terms of the transaction, MetroPCS will engage in a reverse-merger with T-Mobile and Deutsche Telekom will own 74 percent the combined company, which will be public. MetroPCS will also declare a 1-for-2 reverse stock split and pay $1.5 billion in cash to its shareholders. Metro's minority shareholders want MetroPCS to retain a greater share of the combined entity than 26 percent and have argued that the new company will have too much debt.

Meanwhile, T-Mobile is staying mum on job cuts that may accompany the deal. The Seattle Times and other news outlets have reported that hundreds of cuts are underway at T-Mobile's headquarters in Bellevue, Wash., but the company has remained silent on the topic, according to the Seattle Times.

For more:
- see this MetroPCS release
- see this Bloomberg article
- see this Motley Fool article (sub. req.)
- see this Seattle Times article

Related Articles:
MetroPCS shareholder slams company, Linquist over T-Mobile deal
FCC approves T-Mobile/MetroPCS merger
MetroPCS urges shareholders to approve T-Mobile deal
Report: T-Mobile to cull jobs at HQ ahead of MetroPCS deal
Democratic lawmakers push T-Mobile not to cut jobs after MetroPCS deal closes
Investors push MetroPCS to update filings ahead of vote on T-Mobile deal

Read more about: Mergers and Acquisitions
back to top

By Phil Goldstein

Comment |

5. Apple pays $20M for indoor-location firm WifiSLAM

AT&T Mobility (NYSE:T) said it will effectively double the number of markets where it will initially launch its Digital Life home automation service from eight to 15. However, the company has not named the markets or said when exactly the service will begin.

The company said in a statement that the offering will launch "this spring," which technically could mean until the end of June. AT&T reiterated its plan to continue to launch Digital Life in new markets across the nation, with plans to reach up to 50 markets by the end of 2013.

In January AT&T announced it would launch Digital Life in eight markets. During AT&T's annual Developer Summit held in conjunction with the 2013 Consumer Electronics Show, Glenn Lurie, president of emerging enterprises and partnerships at AT&T, said that AT&T's Digital Life product will use the company's wireless network and will allow subscribers to customize the service and have flexible price plans. However, he did not provide specifics on that pricing at the time.

AT&T spokesman Mark Siegel told FierceWireless that the company "will share market information when we roll out the service this spring. For competitive reasons, we are not sharing those details today." He also said AT&T will "share pricing information when the specific markets are announced" but did not give a specific timeframe for when that would be.

"Our Digital Life is a nationwide, all IP-based home security, home automation product," AT&T Mobility CFO Pete Ritcher said an investor conference earlier this month, according to a Seeking Alpha transcript. "It's going to launch in eight markets here probably later this month, and up to 50 more markets that we'll launch by the end of the year."

AT&T has said it will have Digital Life centers in Atlanta and Dallas that will manage the product, and the company has been actively looking for developers to make applications for Digital Life to help make the product more robust.

Over the past few months, AT&T executives have repeatedly touted home security and automation as one of the company's new growth opportunities for the future, along with the connected car, mobile healthcare and mobile payments.

For more:
- see this release
- see this AT&T page

Related Articles:
AT&T will go live with Digital Life home automation service in March
AT&T's Lurie talks Mobile Share plans, Amazon's new LTE tablet and more
Hurdles slow wireless home automation, mHealth
Report: M2M connections to soar to 359M in 2016
AT&T brings Digital Life to New Orleans home
AT&T to offer home automation services in U.S. via 'Digital Life' launch

Read more about: AT&T, home automation
back to top

By Tammy Parker

Comment |