#TBT: Competition impacts pricing; T-Mobile International is born; Gearing up for WRC-2000 … this week in 2000

Editor’s Note: RCR Wireless News goes all in for “Throwback Thursdays,” tapping into our archives to resurrect the top headlines from the past. Fire up the time machine, put on those sepia-tinted shades, set the date for #TBT and enjoy the memories!

More features offered free as carriers compete for customers

It is a generally accepted fact that today’s dollar doesn’t buy as much as it used to, but in the case of wireless airtime, it may actually buy more. “Since the introduction of PCS, there is a whole new paradigm of wireless pricing. In most markets there are at least four providers, and that’s not including Nextel (Communications Inc.). Competition and enhanced technology are forcing prices downward,” said Charles Mahla, senior economist at Econ One Research Inc. in Sacramento, Calif. Mahla said he has seen a consistent drop every month in the cost of cellular service. The increased number of providers has sparked a pricing war where subscribers are not only getting lower per-minute rates, but are also receiving features such as voice mail and caller ID for free. The average price of wireless service in the top 25 markets in the United States dropped an average of 3.2 percent between November 1999 and December 1999, according to a survey conducted by Econ One that analyzed 1,799 calling plans, including personal communications services plans. The survey looked at 30-, 150-, 300- and 600-minutes-per-month plans. In the 150- and 300-minute categories, Los Angeles’ rates ranked the highest, with each plan costing $41.58 and $50.81, respectively. The average price of wireless service in Los Angeles also ranked the highest at $47.51 per month. Seattle had the lowest average rates at $35.55 per month, according to the survey. … Read more

Cellular prices drop in competitive European markets

LONDON-The successful market entry of new players in Western Europe caused cellular prices to drop 15 percent to 25 percent last year. However, in the duopoly markets of Ireland and Norway, prices barely moved, according to “European Cellular Pricing Strategies,” a new study conducted by Strategy Analytics. New entrants to markets such as Austria, Italy, Spain, Portugal and the Netherlands inspired a new round of price competition, with some Dutch users seeing expenditure levels halve during the year, the report said. By contrast, cellular prices have remained relatively static in the duopoly markets of Norway and Ireland, as well as in Sweden, where no new players have entered the cellular market since 1992. “There is little incentive to compete on price when you only have one competitor,” said Phil Kendall, senior industry analyst at Strategy Analytics. “The Norwegian cellular operators may have done much for consumers through the development of more and more advanced services and applications, but pricing levels are starting to become expensive by European standards,” Kendall said. … Read more

DT creates T-Mobile International

BONN, Germany-Deutsche Telekom announced it will bundle its cellular phone activities into a new holding company called T-Mobile International AG. Kai-Uwe Ricke, currently head of Deutsche Telekom’s German wireless operator T-Mobil, will become chairman of the management board of the new company and act as interim managing director of One 2 One, the UK wireless operator Deutsche Telekom purchased last year. Tim Samples, the One 2 One chief who is credited with helping revive the smallest of the four British mobile carriers, is leaving the company at the end of this month. … Read more

Holiday season cellular sales are hot

New sales records of all kinds were set during last year’s fourth quarter, reinforcing the importance of the last three months of the year for the wireless industry. “In the cellular market, the battle for market share is won and lost in the fourth quarter, with Christmas sales being a critical benchmark for network operators and handset vendors alike,” said a Strategy Analytics report, which noted fourth-quarter sales continue to account for more than 40 percent of annual unit volume. “Strategy Analytics expects US cellular and (personal communications services) operators to report dramatic fourth-quarter results over the next few weeks,” said the report. “Overall we can anticipate Q4 net addition gains of 15 percent to 20 percent or higher for the leading US wireless operators.” Strategy Analytics said holiday promotions centered around three main themes last year: two-for-one phone promotions, free evening and weekend airtime, and bonus minutes. During the fourth quarter: Sprint PCS was expected to add more than 1 million subscribers compared with the 836,000 subscribers it added during the same quarter in 1998. The company plans to release its fourth-quarter earnings report Feb. 1. … Read more

Looking ahead to WRC-2000

WASHINGTON-The Clinton administration, still struggling to craft a third-generation mobile phone spectrum position for this spring’s World Radiocommunication Conference in Turkey, has organized a 15-member industry-government committee and directed it to come up with recommendations by the middle of next month. The decision to set up the committee, made by WRC-2000 Ambassador Gail Schoettler at a State Department meeting recently, appears to reflect the frustration-and possibly even desperation-of a situation in which the administration and US wireless industry find themselves in less than six months before WRC-2000 opens in Istanbul. For months, many in the wireless industry have been pressing a reluctant administration to push for global 3G spectrum harmonization at WRC-2000. The United States, for the most part, has been opposed to 3G spectrum harmonization for both philosophical and practical reasons. Last November, the FCC decided to reopen negotiations. The United States historically has not been keen on service-specific global spectrum allocations, figuring such allocations give telecom policy-makers little flexibility and may turn out to be competitively harmful to American firms. The administration also realizes there are domestic spectrum conflicts inherent in the 3G spectrum allocation options. US wireless firms argue global commerce and transborder mergers change everything; that is, carriers and manufacturers need common blocks of spectrum around the world to compete in the emerging and potentially multibillion-dollar 3G broadband market. … Read more

NextWave fights to keep licenses through bankruptcy

WASHINGTON-NextWave Telecom Inc. at RCR press time was expected to file papers with the bankruptcy court asking Judge Adlai S. Hardin Jr. to explicitly state that any attempt by the Federal Communications Commission to cancel and/or re-auction its 90 personal communications service licenses without first seeking relief from the bankruptcy court violates federal law. On Wednesday, the FCC cited a federal appeals court ruling and canceled the 63 C-block and 27 F-block licenses and scheduled a re-auction for July 26. [U.S. Court of Appeals for the Second Circuit’s] ruling has confirmed the FCC’s authority over these licenses. To ensure swift service to the public, our rules require that C-block licenses cancel when a licensee fails to pay its obligations on time. Allowing a company to keep its licenses despite its failure to pay on time would be unfair to others who played by the rules and would undermine the integrity of our auctions process. This spectrum has laid fallow for too long. Now it is time to act swiftly to auction this spectrum and put it to productive use for US consumers,” said FCC Chairman William Kennard. NextWave believes that since the FCC did not seek relief from the automatic stay (which protects debtors from their creditors) that the FCC cannot take back an asset that is part of the bankruptcy proceeding. The C- and F-block licensee filed for bankruptcy in June 1998, rather than participating in an FCC C-block restructuring effort. The case went to trial last April. In a win for NextWave, Judge Hardin reduced the value of NextWave’s licenses from $4.7 billion to $1 billion. Hardin said the FCC erred when it transferred the licenses, which Hardin said was a fraudulent conveyance. … Read more

Check out the RCR Wireless News Archives for more stories from the past.

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