Fresh Mown Hay

AT&T Euthanized, Will Be Missed

Quick, Humane End

AT&T’s twenty year death spiral has finally come to an end.  Once the largest company in the world, last week it was acquired by SBC, one of the Baby Bells spin-offs from the government mandated breakup of AT&T in 1984. The child bought the parent.

A shadow of its former self, AT&T was acquired for $16 billion (or roughly a quarter of Google’s current market cap.) It will be interesting to see what will happen to some of AT&T’s forward-looking projects.

Relaunch of AT&T Wireless Now Unlikely

To the great confusion of consumers everywhere, AT&T Wireless and AT&T were separate companies. When AT&T Wireless was purchased by Cingular recently, the AT&T name reverted back to AT&T.

For the past few months, rumors had it that AT&T would relaunch the the AT&T Wireless brand through an MVNO partnership with Sprint. It seems safe to say that SBC, which is a 60% owner of Cingular will kill this project. (If they wanted to do something creative, SBC would relaunch AT&T Wireless as an MVNO for senior citizens, an overlooked segment to whom the AT&T brand holds significance.)

Cloudy Future for AT&T’s Consumer VoIP Play, CallVantage

As a regional bell operated company (RBOC, also sometimes called an incumbent local exchange carriers, or ILECs) SBC does not see voice-over-IP (VoIP) as an imperative. AT&T’s consumer VoIP offering, CallVantage, is actually quite competitive .

However SBC will likely squander the opportunity to embrace their inevitably digital, VoIP future. Instead, they will worry about cannibalizing their high-margin, but rapidly shrinking local phone business.

Om Malik points out another factor confounding SBC’s adoption of VoIP may be AT&T’s willingness to cozy up to cable operators in order to speed the adoption of CallVantage. The RBOCs are sworn enemies of the cable companies, so it is unlikely that these partnerships will continue, thereby clouding the future of CallVantage.

 We Will Miss Their Intellectual Property Firesales

AT&T’s Bell Labs was the premier research and development institution for much of the 20^th century. For a variety of reasons, AT&T repeatedly failed to capitalize on technologies developed by Bell Labs. Areas where Bell Lab’s researchers made substantial contributions include semiconductors, voice-compression and cellular technology.  The invention of the transistor earned Bell Labs the 1956 Nobel Prize.

Instead of commercially exploiting the intellectual property (IP) generated by Bell Labs, AT&T either gave it away or licensed it for a nominal sum. The world was enriched by this intellectual property -- the creation of billions if not trillions of dollars of weath stemmed from Bell Labs. We would not recognize our telecommunications world today had AT&T followed the modern IP strategies of firms like IBM and Microsoft, which many argue hinder innovation.

Senior Citizen MVNO

In all the talk about the Sprint-Nextel (T-mobile? Verizon?) merger, very few of the articles have talked about what Sprint does well (Nextel’s strength – the NASCAR segment – is well documented.) It turns out that Sprint’s strength is a vaguely sad. Sprint is good at renting out spare capacity on its network to other companies.

Mobile virtual network operators (MVNO) are mobile carriers that don’t own a network. They use someone else’s network, usually Sprint’s, and just focus on marketing. It’s a brilliant idea since it enables niche marketing of cellular services. For example, Boost and Virgin Mobile, both of whom focus on getting teenagers hooked at an early age, are MVNOs that use Sprint’s network. 

So I’m in Vero Beach, Florida for the Holidays with my family at my grandparents’ place. In terms of telecommunications infrastructure, all I’ve seen is one of those land-line phones from Radio Shack with the HUGE buttons on them. I can see what number they are dialing from across the room. Without my glasses.

The rest of my family would love for the 90 year old grandparents to have a cell phone.  It would make all of us feel safer since none of us live in Florida, and since, well, they’re 90.

When is someone going to create an MVNO for seniors? It would need to do a few things differently for such a service to catch on with our elders:

Phones:
- completely stripped of fancy features (no Java apps, no games, no ringtones, no camera, maybe even no phone book…)
- HUGE buttons with that “HP calculator feel” so you know you press them (that patent must have expired by now…)
- maybe even an “on” button that gives you a dial tone (a fake one, like some VoIP providers)
- an analog dial on the side for volume adjustment (make the max volume LOUD)
- long battery life and a simple cradle for recharging

Service:
- prepaid (eliminates overage surprises)
- ultra simple plans and marketing (i.e. explain that there is no such thing as long distance charges anymore.)

On one hand, seniors have low monthly usage. But on the other hand, if you can get them a handset they like and a plan they understand, churn would be almost zero.

Mobile Do Not Call Hoax

This is fascinating. Why did 9 million people sign up within a week?

1) to the average consumer, the telemarketers are parasitic ***holes and it just seems like a natural progression that they would move on to mobile phones (like a virus mutating – now it’s airborne!)

2) a lack of faith in the government regulatory bodies (in this case the FCC) to protect consumers from telemarketer harassment. This can be summarized as “well, the FCC has screwed this up so far, so I expect them to screw things up in the future.”

I wish I was more sanguine about the telemarketing industry. As contextual advertising continues to gain momentum (with web and video leading the charge) perhaps the telemarketers will follow by cutting back on their carpet bombing approach and begin to think more carefully about targeting.

Carpet bombing the telemarketers aside, what lessons can be taken from this? What ingredients do you need to mobilize 9 million people to take action?

My (rather pessimistic) guesses are:
1) plays on people’s lack of faith in government
2) plays on people’s lack of faith in the private sector
3) make it an issue people really care about (in this case, privacy)
4) make the “call to action” simple (just click and enter your number)

for reference see Om Malik's post Mobile Do Not Call Hoax