Sunday, July 22, 2012

Mobile broadband hope: Walmart, TruConnect, Netzero, Sprint, Amazon and why I'm waiting on my next iPhone

I recently reviewed the state of American mobile broadband, including mifi, tethering and iPad hotspots. Bottom  line - the Verizon/AT&T duopoly means the market is bleak and getting worse. I can believe Srinivasan's claim that "Mobile service providers are moving towards just one bundle of voice and data at $100 per month.

That's a lot of money, even for the 2%. It's ridiculously expensive for the mass market. If Verizon and AT&T succeed, they'll put immense pressure on Apple's margins -- and wipe out Google's margins completely.

Unless Google acquires T-mobile there's only one option in play - Sprint. The weak, wounded, third rate carrier that desperately needs friends.

Except the option isn't really Sprint, but rather MVNOs [2] that have negotiated access to Sprint's aging CDMA network.

Sprint, and its motley allies like TruConnect Mobile MiFi. It's a "mobile virtual network operator (MVNO) that sells 3G mobile data service for laptops and tablets such as the Apple iPad and the Kindle Fire via the Sprint wireless network" (wikipedia). They've recently partnered with Walmart to deliver Internet on the Go.

'Internet on the Go' seems promising -- buy a data block with, practically speaking, no expiration. There's only one glitch. The web site doesn't mention price.

Yeah, that's weird, but you can find the price listed on Walmart [4]. The current price seems to be $45 for 1 GB [1] That's a lot more than the US-standard monthly charge of $50 for 2GB. The big difference though, is that the 1GB doesn't expire. My wife, for example, does quite a bit on her iPhone and is often below 200MB/month (no video, no software installs, no purchases, etc). With similar usage I wonder if I could stretch that 1GB out to 3-4 months -- at which point it's relatively economical. [3]

Walmart is a potential disruptor. You know that Verizon and AT&T are keeping one eye on them, even as they put their other eyes on Google and Apple (they have lots of eyes).

Amazon is another potential disruptor, it's already a covert MVNO player

Then there are the small guys like NetZero offering a $35/month 2GB plan over the Clearwire WiMAX 4G Network  (alas, this Engadget review doesn't match current pricing). Ok, that's no better than Virgin, but the difference is their $10/month 500 MB plan and $20/month 1GB plan - if you can use ClearWire. [5]. Most importantly, NetZero doesn't have overage fees ...

A. With NetZero 4G Mobile Broadband there are no overage charges. Customers cannot accidently exceed their monthly data allotment. We alert our customers when they reach their data limit and, if they want to continue accessing the Internet, they can either quickly and easily update their data plan, or buy extra data "Top Ups" that are good through the end of their billing cycle.

That's big. NetZero's hard stop puts them in the same league as Walmart's data block plan, and moves then well ahead of TruConnect's capless per MB fee.

So things are more interesting in the US market than I'd thought. I'm going to be researching both Walmart and NetZero; I'm likely to try one of them with my MacBook Air.

This also contributes to a decision to hold off on getting a new AT&T iPhone. I want to wait a few months and see what happens in this rapidly changing world. I'd love to buy an unlocked device ($600-$700) and bet able to, say, get voice and data with tethering for, say, $50/month.

- fn -

[1] The recommended MiFi (Mobile Hotspot) costs $120. I wonder if the Virgin Mobile Broadband2Go MiFi 2200 would work, but I haven't researched that.

[2] It's forgotten now, but prior to Apple's AT&T announcement there was widespread speculation that the iPhone would run on an Apple MVNO. Alas, that was not to be. Watch this US MVNO list for potential disruptors.

[3] We have good Sprint service in most of MSP. Note that when one is paying for each bit fetched, Chrome's prefetch is a bug, not a feature.

[4] TruConnect's own package costs $40 per GB but $5/month. So if one assumes use of 4GB data per year Walmart's and TruConnect's cost are both $180/year. The catch is that that a data accident could run up a large TruConnect charge, but a Walmart credit provides a hard stop. The Walmart plan is a much better deal. 

[5] MSP can. So NetZero's cost could be as low as $120 (plus taxes/fees) for 6GB of data compared to Walmart at $180 for 4GB of data with equal overage prevention. NetZero relies on the quirky Clearwire network, Walmart uses the slowish Sprint network.

Update: I decided to gamble $50 and try NetZero using their 'free' 200MB option. My first experience was using their $#!$@ insane web site registration form, which does not appear to have been tested with Chrome. That led me to do a bit more research, which found sites like this. I couldn't find any reviews from people I trust, just a few 1 star user comments on a PC Magazine review.

On the other hand, while the Internet on the Go site said my area was covered, the web site mifi order form said it wasn't. (I think the first is correct.)

I think I'll give this a bit more time to settle out.

Update 7/28/12: A few similar Clearwire-based potential disruptors...

  • FreedomPop: Similar to NetZero, but less costly. They were supposed to launch in "mid-2012", but are still struggling. They got a wee bit of VC money a month ago.
  • TIng offers a Huawei Hotspot but their monthly rates aren't competitive.

1 comment:

Andrew said...

What about Walmart family mobile (T-Mobile network) for both voice and data? Data falls back to 2g speeds after 250mb a month, but for someone with wifi at home and work, it is pretty sweet.