U.S. Regulator Files Cramming Complaint Against T-Mobile

The Federal Trade Commission (FTC), a U.S. regulatory agency, filed a complaint on Tuesday against T-Mobile, alleging that the U.S. operator placed “bogus” charges for third-party or “premium” SMS subscriptions on customers’ bills, earning hundreds of millions of dollars of revenue in the process. The FTC claims that the charges—for services including “flirting tips, horoscope information or celebrity gossip”—in many cases were billed without the customers’ consent or knowledge, a practice known as “cramming.” The FTC further alleges that the premium SMS charges, typically US $9.99 per month (of which the operator received 35 to 40 percent), were included on difficult-to-understand bills that were up to 50 pages long. Other elements of the FTC complaint include that when consumers who claimed the charges were unauthorized sought refunds, T-Mobile failed to refund their money or told them to seek refunds directly from the third parties, without providing the customers with the necessary contact information. FTC Chairwoman Edith Ramirez said in a statement, “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”  Considering that T-Mobile’s “Un-carrier” campaign to take business away from Verizon, AT&T and Sprint is based on the idea that it is more customer-friendly than its competitors, these charges from the FTC are potentially very damaging. A swift and aggressive response is strategically sound in such circumstances, and T-Mobile CEO John Legere issued one immediately: “We have seen the complaint filed today by the FTC and find it to be unfounded and without merit. In fact T-Mobile stopped billing for these Premium SMS services last year and launched a proactive program to provide full refunds for any customer that feels that they were charged for something they did not want.” On June 10 the operator stated that it “would no longer allow third-parties to bill customers for Premium SMS services through T-Mobile,” adding that such services were “waning in popularity with our customers.” Regardless of the particulars of the present case, third-party billing has been under attack in the U.S. for some time now. In late November 2013, AT&T, T-Mobile and Sprint entered into an agreement with 45 U.S. states to end the practice, and Verizon separately said that it would also stop billing for premium SMS. Making these intentions correspond with the reality on customers’ phone bills may still be a work in progress. As for T-Mobile, it of course remains to be seen whether it will end up having to repay its customers for third-party SMS charges.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes two noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week :  http://www.tarifica.com/storyoftheweek.aspx

Telecommunication Plans Scored Using Propriety Model.

In today’s competitive mobile markets, consumers are faced with an array of choices when it comes to mobile plans.  Complicating matters is the fact that operators are constantly adding features, offering special deals and introducing new plans to the market as they vie for market share.  In an attempt to promote these new offerings, advertising expenditures grow each year.  But in the end, all this results in is a more complex and confusing decision-making process for consumers.  What is required is a tool that allows operators to clearly communicate the value of their offerings in such a way as to allow consumers to easily understand and perceive it. 

The Tarifica Score is such a tool.  It enables objective, numeric, apples-to-apples comparisons of mobile plans among operators and markets using a consumer value based approach.  Plans are scored through the application of a proprietary mathematical model that takes into account the various key components of mobile plans such as plan allowances (minutes, data, SMS and MMS), data speeds and value added elements.  The end result is a score for each plan that allows it to be compared with other plans in that market, regardless of plan features.  The Tarifica Score also makes possible comparisons of plans across markets.

·     The Tarifica Score allows operators to evaluate their offerings in comparison to those from competitors – even prior to launch – and then make adjustments as necessary to improve scores

Tarifica has drawn on its years of industry knowledge and expertise, along with its many relationships with mobile operators and regulators, to develop the Tarifica Score.  We are confident this tool will deliver considerable value to operators in today’s intensely competitive mobile services market. 

 The Tarifica Score represents a potent method for promoting plans via the media and directly to consumers.  Companies can receive validation as an attractive plan from an independent third party and communicate value to customers in a simple, easy to understand manner.   It's a unique market planning tool - compare plans against competitors prior to launch and make adjustments  to improve scores.

If you are interested in learning more about the Tarifica Score, please contact Tarifica to schedule an online demo that will explain it in detail.  http://www.tarifica.com/contactus.aspx

U.K. Prime Minister Unhappy With Mobile Coverage

U.K. Prime Minister David Cameron has recently instructed his cabinet ministers to find ways to improve mobile coverage in the country’s rural areas. This directive follows a meeting that was held between the chief executives of the U.K.’s mobile operators and the country’s former culture secretary, Maria Miller, in Q1 2014 to start planning for an increase in rural mobile coverage. The new culture secretary, Sajid Javid, will take on the project and meet with MNO executives for a progress update. The operators were asked to explore, in particular, the costs of adding coverage to the A and B roads in the villages of Shropshire, Dorset and Norfolk. As part of these discussions, the U.K. government has asked that the prospect of national roaming be considered—an idea that the operators are resisting. They argue that revenues lost through national roaming could prevent them from investing in their own networks and infrastructure and that a better way to help increase coverage would be to decrease the amount of bureaucracy and cost involved in erecting masts (towers) in rural areas.

Over the last few years, the U. K. government has launched several initiatives to help bring increased mobile and broadband coverage to areas of the country where there is minimal coverage or none at all—known as “notspots.” Among these initiatives are the mobile infrastructure project (MIP) and Broadband Delivery UK (BDUK). However, both of these programs have received criticism. For example, BDUK has been accused of mismanaging funds, operating in an inefficient manner and favoring BT over the country’s other operators. This new order from the Prime Minister is separate from the previous endeavors, and although the country’s four largest MNOS are all increasing their investments in 4G services, the operators fear that the reasons behind the regulation have a number of different bases—the areas in which the government has asked for increased coverage are core Conservative Party voting territories.

 

“Although the U.K. communications regulator Ofcom must act within the powers and duties set for it by Parliament, and its principal duty is to further the interests of citizens and consumers—which include increased coverage in underserved areas—regulators also need to try to work with operators. Any undue pressure—possibly politically driven in this case—on the regulator to implement changes under the guise of increasing service in the telecom industry may be met with resistance by the operators.”

Kamely Hayes,

Managing Editor,

The Tarifica Alert

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Free International Roaming in Asia

Malaysian mobile operator U Mobile has launched free international roaming services for postpaid consumers traveling across Asia. Travelers to Cambodia, Hong Kong, Indonesia, the Philippines, Singapore, Thailand and Taiwan will receive a 50 MB international roaming data allowance free of charge. Usage beyond this limit will be charged at pay-as-you-go rates, with a maximum of MYR 30.00 (US $9.33) per day. Travelers will have to manually select the partnering mobile networks, which are CamGSM (Cambodia), PCCW (Hong Kong), Telkomsel (Indonesia), Globe (Philippines), StarHub (Singapore), Taiwan Mobile (Taiwan) and True (Thailand). This promotional offer is valid until 30 November 2014.

As free international roaming offers go, this one is limited in scope. It  provides an allowance of 50 MB per day of roaming data in select countries, on select partner networks only. In addition, at a pay-as-you-go rate of MYR 7.50 (US $2.33) per megabyte (which applies to all of the countries where roaming services are provided, except Vietnam), the roaming cap means an excess data allowance of 4 MB per day, which is very small.

However, this offer must be examined in light of other factors. It is the first free international roaming data offer to be launched in Malaysia. Market leader Maxis offers a data roaming plan for 100 countries with a cap of MYR 38.00 (US $11.82) per day. This offer is meant to promote U Mobile’s Unlimited 50 and Unlimited 80 plans, which were launched in January 2014, a month after U Mobile became the second operator to launch 4G services in Malaysia. These plans, priced at MYR 50.00 (US $15.55) and MYR 80.00 (US $24.88), respectively, provide unlimited on-net calls, unlimited data with a throttling threshold of 2 GB and 3 GB, respectively and allow sharing of minutes and data between up to three SIMs with a charge of MYR 10.00 (US $3.11) for each additional SIM. While 4G services are currently limited to small portions of the country, U Mobile’s 3G radio access network sharing agreement with Maxis is enabling it to provide 3G speeds across the country. This latest promotion, though limited in nature, adds some value to a competitive offer and indicates an aggressive strategy on the part of U Mobile, which aims to increase its market share from its current level of 10 percent to between 15 and 20 percent in the next five years.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Etisalat to Sell West African Assets to Maroc Telecom

UAE-based MNO Etisalat has reported that it will sell its operations in West Africa to Moroccan MNO Maroc Telecom for a sum of US $650 million. The deal will include the sale of Atlantique Telecom, a wholly owned subsidiary of Etisalat with operations under the Moov brand in Benin, Central African Republic, Ivory Coast, Ghana, Niger and Togo. It also includes Ivory Coast-based Prestige Telecom, which provides IT services to Etisalat’s operations in all of these countries. The operator’s subsidiary in Nigeria will not be part of the transaction, which requires competition and regulatory approvals in the six West African countries. The deal has been contingent on Etisalat’s planned acquisition of Vivendi’s 53 percent stake in Maroc Telecom for €4.2 billion (US $5.7 billion), which was completed on 14 May 2014.

Vivendi, which is the parent company of French MNO SFR, has been in exclusive talks with Etisalat since July 2013 about the sale of its stake in Maroc Telecom after other bidders, including Qatar’s Ooredoo, dropped out. This sale is part of a larger move by Vivendi to focus on its more profitable media assets and has been viewed as a means to raise enough cash to write down its debts and sell SFR.

The deal has several positives for Etisalat. While the operator has a presence in 15 markets across the Middle East, Asia and Africa, its main source of revenue (at 66 percent of group revenues in Q1 2014) continues to be its home market. The UAE is a highly saturated market, which ranks highest in the world in terms of smartphone penetration (over 72 percent as of 2013). Competition is intensifying in the wake of the regulator’s elimination of the tariff approval requirement and introduction of mobile number portability in 2013. Saudi Arabia, the other Middle Eastern market in which Etisalat operates, has nearly as high a rate of mobile penetration and also will see the entry of three MVNOs. Therefore, diversification away from the Middle East makes sense.

However, some of Etisalat’s biggest international markets in terms of revenue generation, Egypt and Pakistan, have been affected by issues such as political instability and currency devaluation. Through the acquisition of Maroc Telecom, Etisalat not only gets an entry into Morocco with the leading market share of 47 percent (totaling 18.3 million subscribers), it also adds four other African countries (Burkina Faso, Gabon, Mali and Mauritania) to its portfolio and can leverage synergies that exist between operations in that region. Furthermore, placing its West African operations under the management of a successful regional operator may prove beneficial to Etisalat. 

However, it is worth noting that Maroc Telecom’s profitability in its home market has been hit by soft consumer spending and increasing competition. Bringing innovative offers to the market by leveraging the strengths of the two operators will be key to Etisalat’s future success with this acquisition.

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:  http://www.tarifica.com/TarificaAlert.aspx

Easily Access Mobile Telecom Prices from Around the World

Tarifica's new interactive analysis tool empowers users with the ability to easily sort telecom pricing data from around the World.

This preview shows exactly how the Pricing Database analysis tool works.

http://www.tarifica.com/MobilePricingDatabase.aspx

Powerful Insights into the Pricing Strategies of Mobile Operators

Competitor Intelligence Graphic 2013

Tarifica’s Competitor Intelligence Report is a comprehensive quarterly report that provides powerful and clear insights into the offerings and pricing strategies of mobile operators, serving as an invaluable guide to trends in operators plans, prices and offers. Tarifica can produce this report on more than 300 mobile operators it tracks worldwide.

The Competitor Intelligence Report tracks and graphs every consumer and business offer from a selected mobile operator, examining all of its plans by price, service features, device type and other metrics.  In addition to the numerical and graphical data, each report includes an Executive Summary containing Tarifica’s analysis of noteworthy trends and developments in the operator’s offerings.  These insights are combined with the data to provide a deeper understanding of the factors driving the numbers and the strategy/thinking of each operator.

Plans and prices are presented in local currency — so there is no need to perform any conversion.  Subscribers receive four quarterly reports.  Each report contains data from the previous four quarters, resulting in a trend analysis covering a total of seven quarters in an annual subscription.

Each subscription includes access to the Tarifica Analyst responsible for producing the report. This analyst is available to interpret the data and to answer any follow-up questions.  In addition, every report is accompanied by Tarifica’s current rate file for the operator, which provides in-depth details on each of its plans and can be used to dig deeper into the data for more analysis. 

Each Competitor Intelligence Report is an exhaustive study that covers the full scope and evolution of a mobile operator’s consumer and business offers, providing operators, regulators and other industry participants with actionable intelligence on the competition.

Each Competitor Intelligence Report answers critical questions about a mobile operator, including:

 Competitor Intelligence Graphic 2013

¨ How many plans of each type are offered (Consumer/Business, Prepaid/Postpaid, Device Included/No Device, No Data/Data Only, etc.) and how is this changing?

¨ How does the operator price all of its current plans and services and how have these evolved?

¨ What new services are being rolled out and how extensively?

¨ How many device-specific plans are being created/modified and for which devices (e.g., Smartphone, Tablet, USB Modem)?

¨ How is the operator designing data only plans? For instance:

− Data Allowance

− Connection Speeds

− Price per GB

¨ What types of bundles are being designed, how are they being priced, how has this changed and what is driving these changes?

¨ What types of plans are being emphasized/deemphasized?

To Contact Tarifica's Research Team:  http://www.tarifica.com/contactus.aspx