Sprint is turning out to be the prettiest girl at the ball. Or at least the most available, anyway.

Following Japanese mobile carrier Softbank's bid to acquire Sprint, the No. 3 mobile operator in the United States now has a new suitor looking to dance: Dish Network. The satellite TV operator has come up with a bid to buy Sprint that is several billion dollars higher than Softbank's offer - and cliams that it can provide a better experience for consumers and a better return for investors.

(See also What's The Real Impact Of Sprint's Japanese Lifeline?)

According to The Wall Street Journal, Dish is offering Sprint $25.5 billion, about 13% more than the Softbank offer, which is for only 70% of the company. The business dynamics of the merger are fairly complex (with a fair amount of spectrum up for grabs, especially through spectrum wholesale operator Clearwire, which Sprint is the primary owner and Dish tried to acquire earlier this year).

But to us, there is just one truly pertinent question: Would this deal be good for consumers?

The Dynamic Of A Sprint-Dish Network

Sprint is a mobile carrier. As such, it owns and operates wireless spectrum, builds infrastructure, distributes hardware (such as smartphones) and dabbles in media, applications and entertainment. Sprint is in the same situation as the rest of the U.S. carriers: watching its market position turn into “dumb pipe.” Thats why it wants to expand its revenue sources into areas like video and audio, application ecosystems and services. The broader its product portfolio, the more attractive Sprint might be to consumers choosing a carrier.

On the other side, Dish is a satellite pay-television operator. That is about it. It offers programming, television hardware and subscriber packages to consumers and businesses. The problem with Dish is that the pay television market is growing slowly (and could soon begin contracting if cord-cutting becomes rampant) and highly competitive. 

What would you get if you combined the two?

• A mobile network that can push premium video to smartphones, tablets, televisions and computers.
• The ability to, perhaps, give consumers the ability to use satellite connectivity for their data connections (in addition to terrestrial-based mobile networks based on GSM or CDMA technologies).
• A full range of consumer and business services, opening up opportunities for other companies and entrepreneurs to build on top of.

The combination would also look a lot like Sprint's two biggest competitors, AT&T and Verizon.

Both Ma Bell and Big Red have television capabilities to the home. AT&T has U-Verse for television, which it bundles with its Internet and landline voice offerings. Verizon has its fiber-based FiOS network, which it has been building for most of the last decade. In one fell swoop, Dish could create a similar company profile and market it aggressively. 

Let’s Not Forget Who We Are Dealing With

Dish Network does not have the most sterling of corporate reputations when it comes to dealing with consumers. This is the company that dropped AMC and other prominent cable channels (through AMC’s former owner Cablevision) from its roster - the subsequent lawsuit led to four years of litigation that concluded in October 2012. Dish Network is also locked in a battle with CBS over its Hopper DVR's ad-skipping capabilities.

Dish is the kind of company that doesn't shy away from lawsuits with other media heavyweights, consumers be damned. Sprint, meanwhile, is seen as relatively consumer-friendly (at least compared to the other major U.S. mobile carriers). It offers some of the most competitive wireless plans with (almost) truly unlimited data for smartphones and tablets. It's hard to say what kind of company Sprint-Dish might turn into, but Dish Network would be the surviving company in this deal, so you might expect its corporate culture to dominate.

A third major player in the mobile/television market could be a good thing for consumers. Despite its pugnacious reputation, Dish shares Sprint's commitment to being a low-cost leader. If that adds up to lower prices for consumers, great. Unless it all gets tangled up in endless lawsuits. 

With two major deals now on the table, it seems clear that Sprint is going to bought by someone relatively soon. Both suitors claim to have big plans for the carrier, but it's too soon to be sure which one will win out and how the successful bidder will change the carrier.  

Images courtesy Shutterstock.

Shopping for wireless data plans for your smartphone can be an exercise in banging your head against a wall. Over and over. Does AT&T have the fastest data? How much does Verizon charge for overages? Where, oh where, is my "unlimited" plan? Do these new T-Mobile plans save me money? 

Good luck figuring it all out. At the end of the day, your bill is probably not what you thought it was going to be anyway. But, there are general baselines that we can follow from carrier to carrier that can give us a good idea on where to start. WhistleOut, a website that tracks wireless plans among the top cellular carriers in the United States, United Kingdom and Australia, wants to make it easy for you. The WhistleOut team created an infographic that compares plans among the top U.S. carriers. Check it out below.

Top image: Samsung Galaxy S4 by Dan Rowinski

In the United States, the smartphone contract is king. T-Mobile, the smallest of the major American wireless carriers, wants to end the reign of two-year contracts, phone subsidies and early termination fees. It even argues it can save you money in the process.

Well, at least part of that is true.

T-Mobile is instituting its plan to kill the subsidy-and-contract model for U.S. smartphone buyers. Instead of paying one lump sum for a smartphone and 24 months worth of contract, consumers can pay a minimal upfront cost of a smartphone and then a monthly fee as part of their bill.

For instance, if you want to buy a Samsung Galaxy S3 with 16GB of storage from T-Mobile, you can pay $69.99 up front and then $20 a month on top of your phone bill for 24 months. If buyers prefer, they can pay the full amount of the phone up front and skip the monthly installments. 

T-Mobile’s wireless plans start at $50 for one line and 500 MB of data. Users get 2GB of data for $60 and unlimited data for $70. Add the monthly smartphone fee into the equation and users are still going to get cellphone bills between $70-$100 on a monthly basis. 

How The Numbers Break Down

On one hand, consumers will be happy with the fact that they are not on a contract. Ostensibly, that means they can leave whenever they want. But that still have to have to pay for the smartphone they bought. One way or another, users are going to pay for the entire unsubsidized portion of your new smartphone.

For instance, if you choose to get a Samsung Galaxy S3, you are going to eventually pay $550 for the phone. You pay $70 up front plus the $20 fee per a month. If you get the get the unlimited data plan at $70 a month, your total cost is $2,230 for the life of the phone. If you look at the fine print in T-Mobile's contract, it will start throttling users back to "2G" speed after 5GB of data use. If you go with the bottom-tier plan at 500MB of data, the total cost of ownership is $1,750. The most popular tiered plan will likely be the $60/month for 2GB of data. That will run you a total $1,990.

For a comparison, the averages users consume about 2.3 GB of data per month. That includes moderate to heavy usage without playing an excessive amount of videos or using your smartphone as a hotspot (which usually requires a separate charge from the carriers).

T-Mobile does have cheaper phones available. The Windows Phone 8X from HTC costs $0 at checkout and $18 a month for a total of $432. A Nexus 4 will cost you a down payment of $49.99 and $17 a month for a total of $457.00.

Let’s compare T-Mobile to AT&T, which uses the "traditional" subsidy model. If we go with the baseline plan for AT&T, we are paying $40 for 450 minutes of voice time and unlimited texts (an unlimited voice plan will go for $70). Then you add in a data plan tier and messaging. The most popular is 3GB for $30 and $20 for unlimited texts. That is $90 a month, or $2,160 over a 24-month contract. Now, assume that you paid for a $200 subsidized iPhone or brand-new Android. That shakes out to $2,360. So, the difference between the most comparable plans on AT&T and T-Mobile are about $100 in favor of T-Mobile. Good, but not exactly earth shattering.

So, if we look at the baseline plan plus cost of device between AT&T and T-Mobile, you actually pay less on a contract with Ma Bell than you do with Big Pink over 24 months. Depending on the smartphone you buy, you can end up paying more per month and over a 24-month period with T-Mobile.

Does that contract really look so bad now?

T-Mobile’s Motivations

If you ever listen to a quarterly earnings call from the executives at AT&T or Verizon, they often lament the damage to their bottom line that smartphone subsidies do to them. You may pay $199.99 for a new Samsung Galaxy device from Verizon but the carrier is paying the full $550. That is millions of dollars in upfront costs that the carriers absorb.

The iPhone is especially cumbersome on carriers’ bottom lines and the more smartphones the carriers sell, the worse for wear their quarterly earnings are. AT&T, Verizon and Sprint (and yes, T-Mobile) make up the money through the life of a contract. If a user wants out of that contract, they have to pay an early termination fee. 

T-Mobile is doing away with the subsidy by passing on the cost of the phone directly to the consumer. You may not be on a contract, per se, but you are still going to pay a termination fee (the remaining cost of the device plus any other T-Mobile fees) if you want to leave. 

T-Mobile will also allow users to bring their own smartphones with them. So, if you have an unlocked iPhone from AT&T, all you need to do is get a $10 T-Mobile SIM card and activate it on T-Mobile. That way T-Mobile doesn't have to deal with the smartphone manufacturer at all and can just make money providing data. Too bad it is currently illegal to unlock your cellphone. 

The aim for T-Mobile is to take over the bottom of the smartphone market in the U.S. Users that do not need a lot of data and want a very cheap phone can do very well on T-Mobile’s plan. If you want an older phone, like the Samsung Galaxy Exhibit, you will pay $240 for the phone and $1,200 for 500MB of data a month over 24 months. Unless you want to get a straight pre-paid plan from the likes of Cricket, that is about as cheap as it gets among the four major carriers.

The fact of the matter is that, one way or another, you are going to pay both the carrier and the smartphone manufacturer. There is really no way around it. The wireless carriers in the U.S. will always try to convince you that their service is better, faster, cheaper. The fact of the matter is that you will pay nearly the same (within a couple hundred dollars) no matter which carrier you choose. 

If you want a new, top-end smartphone, you are likely better off with the two-year contract from one of the larger carriers. 

Update: Article updated to reflect $20 text messaging per month charge from AT&T.

Legislators have introduced bipartisan bills in both chambers of Congress to reaffirm consumers' right to unlock their smartphones once they're off contract. But the bills stop well short of any serious, permanent change.

The Senate version of the legislation is S. 517, the Unlocking Consumer Choice and Wireless Competition Act, which was introduced March 11 by Sens. Patrick Leahy (D-VT) and Al Franken (D-MN), along with Sens. Chuck Grassley (R-IA), Orrin Hatch (R-UT), Michael Lee (R-UT) and Amy Klobuchar (D-MN), all members of the Senate Judiciary Committee.

The provenance of the bill is important, as the involvement of so many Judiciary Committee members means the bill is much more likely to actually get a vote on the Senate floor. The bipartisan (yes, it's still a real word) backing should help grease the wheels as well.

The bill is also very short, as bills go -- just 289 words. That's both good, in that there won't be much to argue about, and bad, because the bill won't actually do all that much. Here's how it breaks down:

• Section 2(a) repeals the specific interpretation of the Digital Millennium Copyright Act (DMCA) made by the Librarian of Congress on October 28, 2012. That ruling let an exemption that permitted consumers to unlock their phones without legal retribution expire on January 26, 2013.
• Section 2(b) of the bill, though, sets a one-year limit on the repeal of the cell-phone unlocking exemption. So assuming this measure gets passed,  one year later the Librarian of Congress would again be free to let the unlocking exemption expire, thus bringing us right back to... where we are today.
• Section 2(c) emphasizes that nothing in the law usurps the overall authority of the Librarian of Congress.

That's the whole thing, in just 182 words less than the actual bill.

The issue at hand is really the Digital Millennium Copyright Act, the 1998 law that Leahy helped create. This sweeping copyright protection law criminalized any efforts to bypass copyright protections and device access control. And buried within it is the authority given to the Librarian of Congress to periodically review new and existing technologies to make sure the DMCA is properly applied.

The Librarian's 2012 DMCA review allowed the unlocking exemption to expire, which in turn inspired a White House petition calling for the its reversal. The petition seemed to resonate, and received 14,000 more signatures than the 100,000 required to get an official response.

(See also: The White House Agrees: Unlocking Your Cellphone Should Be Legal)

Instead of a classic carefully worded response, the White House offered a blast at the Librarian's interpretation of the DMCA rule. U.S. carrier AT&T then responded that it never had any problems with customers unlocking cell phones, just so long as no one broke any contracts.

The White House's explicit call for unlocking legislation means this bill has a good chance to be a law. Plus, in the House of Representatives, House Judiciary Committee Chairman Bob Goodlatte (R-VA) and Ranking Member John Conyers (D-MI) are also backing similar legislation.

(Check out: AT&T: You Can Unlock Your Cellphone, Really)

There is a chance, albeit a small one, that a one-year extension of cell phone unlocking will give the Librarian pause the next time the DMCA review rolls around. But it's hard to buy that this bill is anything but political theater, a quick spoonful of pablum to make voters happy for a while and perhaps dispel the perception of Congress as something than hyper-polarized.

Good luck with that. The fact that no one seems opposed to cell phone unlocking, even the carriers that could stand to lose a little business if a customer takes their device elsewhere once a contract is done, is likely why Congress is all gung-ho on these bills. No lobbying? No problem.

There is also an inherent problem with all of this unlocking discussion: many users won't care about unlocking. When their contract runs out, consumers are usually craving the latest new and shiny devices on the market. Even if they are looking to switch carriers, the thought of getting a new phone is compelling enough they won't even bother with trying to take their old phone with them.

Unlocking will be great for those users who need it, but thanks to the power of marketing, holding on to phones for as long as you can seems to be a bygone practice.

BlackBerry’s newest smartphone is finally coming to the United States. 

According to a press release from wireless carrier AT&T, the BlackBerry Z10 will be available to consumers in its store on March 22. Pre-orders for the Z10 will start tomorrow, Tuesday March 12. The BlackBerry Z10 will be available for $199 with a two-year contract.

The timing of the release aligns with what the company said during the BlackBerry 10 launch event at the end of January. The first wave of BlackBerry Z10 first hit consumers in the United Kingdom, Canada and United Arab Emirates the week after BlackBerry announced the devices. BlackBerry said that U.S. consumers would see the BlackBerry Z10 “in March.”

It is nice to see BlackBerry (the company formerly known as Research In Motion) actually hold to its promises these days. The BlackBerry 10 devices were already pushed back from the company’s original launch dates three times in 2012 before settling on Jan. 30, 2013. Due to complicated review processes that the U.S. carriers impose on new smartphones (which complicates coordinating a single release date on multiple carriers), the U.S. was not part of the first wave of countries to get the Z10. But, BlackBerry said March and it has actually lived up to its word. At least on AT&T. 

The Z10 will also be available to U.S. consumers on T-Mobile and Verizon. T-Mobile is expected to ship devices starting this week while Verizon has not verified when it will begin selling the smartphone. Sprint is not expected to carry the device. 

AT&T said that it will also be serving the BlackBerry Enterprise Server 10 to its enterprise and government clients.

We will soon be witness to the death of 3G. At least, we will from Verizon. 

Speaking at the Deutsche Bank Media, Internet and Telecom conference, Verizon chief financial officer Fran Shammo said that Verizon could start phasing out its 3G CDMA chips by the beginning of 2014. The goal, ultimately, will be to lower subsidies that carriers pay to smartphone manufacturers to carry new devices.

As it stands in the United States, the big carriers pay full price for smartphones like the iPhone or Samsung Galaxy S 3 then retail them at a reduced cost tied to two-year contracts. This subsidy costs the carriers a lot of money up front and is a drain on their quarter-to-quarter revenue. The carriers end up ahead if a user stays for the life of the contract (or pays an early termination fee), but anything a company like Verizon can do to lower its subsidy prices is good for its bottom line.

“Then if you look out into late 2014 then you start to think of things like, okay, so now I can start to take the CDMA chip out of the phone and just have a pure LTE handset. That also starts to reduce subsidies. So over the next two to three years I think we will start to see subsidies come down,” said Shammo, according to a transcript of the interview from Thomson Reuters (PDF).

What is stopping Verizon from phasing out its 3G CDMA network and moving to LTE permanently now? The answer lays with an overlooked aspect of smartphones that users tend to forget exists: voice.

The Coming Of Voice Over LTE

As it stands now, smartphones running LTE cannot make calls over the 4G network. LTE is a big, fat data pipe and it is indeed very fast. Yes, you can use some IP-based services to make calls (Skype, for instance), but the traditional phone call is not available on the newest wireless standard.

The challenge is that LTE is an IP-based system (akin to Wi-Fi) and does not handle traditional voice. When you make a call with your 4G LTE Verizon phone, you are actually still using the 3G network. Most people do not know or care how that works, but it forces companies like Verizon to keep expensive chipsets in their smartphones to handle voice calls. 

Verizon’s CDMA network is also why devices like the iPhone 5 cannot simultaneously make calls and browse the Web. The standard just does not allow it. 

This will change when Voice Over LTE (VoLTE) is available, likely near the end of 2013 or the beginning of 2014. 

“So I am a believer that over the next two to three years subsidies will start to decrease just because of the ecosystem. Then, for us, I think – for Verizon Wireless one other important ingredient for us is obviously we are investing in all this LTE technology. We will ultimately get to Voice Over LTE, probably end of this year, beginning of next year,” said Shammo.

What Does It Mean For You?

More than any other industry, the mobile operators play a very fluid game of ARPU – average revenue per user. As we have seen in the past, the supposed “deals” we have seen from the carriers are really just rearranging how the language and structure of contracts are made. For instance, with Verizon’s “Share Everything” plan, you are going to pay basically the same as you were under the previous plan for data plus a couple extra dollars per device you add. It remains to be seen if Verizon will actually pass on savings from lower subsidies to consumers buying devices. 

So, Verizon cutting out CDMA in the next year for the sake of lower subsidies is not likely to lower your own data bill. If there is anything that consumers can count on it will be that companies like Verizon will always be looking for ways to squeeze the ARPU out of them. 

Depending on where you live, using the wrong mobile carrier can be an expensive, frustrating nightmare. And if you listen to the anecdotal evidence, it seems like a whole lot of mobile users live in crappy-service hell.

But there's more to the story than all those complaints. To find out what's really going on, ReadWrite recently ran a survey of our readers to see how they really felt about their mobile carriers, and how open they were to change.

(See ReadWrite Mobile Carrier Survey: What Would It Take For You To Switch?)

The 179 responses we got do not represent a scientific sampling, but they painted a clear picture of a world where most people are surprisingly okay with their mobile carriers, and not inclined to jump ship without a good reason.

Undeserved Bad Reputations?

Despite the sketchy reputation enjoyed by many mobile carriers, the vast majority of respondents were either Very Satisfied (23%) or Somewhat Satisfied with their service. Only 13% were Somewhat Unsatisfied, and a paltry 4% were Very Unsatisfied.

And they had lots of reasons for staying put - ironically, the very same reasons that mobile users seem to complain about the most.

Just over half (50.3%) actually cited Network Coverage as a reason not to switch carriers, followed by Service Rates and Plans (45%). Some 27% were convinced to stay by their carrier's device selection, and 21% cited the benefits of sharing a carrier with family, friends and co-workers. A significant minority (37%), though, said they weren't switching because of the hassles involved.

Money Talks

So, what would make you switch? Money, mostly.

65% said they'd dump their carrier for a better deal, and 24% were looking for more inclusive Network Coverage. Note that those are also the top two factors helping to keep people from switching as well. Obviously, those two factors trump everything else when choosing a mobile carrier.

Perhaps because the iPhone 5 and most of the top Android models are now avialable at a variety of carriers, only 4.5% said they'd consider moving for a better selection of mobile devices.

Finally, fewer than 1% were interested in sharing a carrier with others - I guess those family plans and free calling to other users of the same carrier don't carry much weight.

Ultimately, it seems, only network coverage and cost really make a difference. And a surprisingly high percentage of survey respondents are relatively happy with what they've already got in both areas.

(For more surveys, see ReadWrite Survey Results: What A Typical BYOD Program Really Looks Like)

Lead image courtesy of Shutterstock.

Tinkerers, open source ideologues, mobile developers and enthusiasts and even plain old mobile consumers who want a bit of choice, you got some bad news earlier this year: It is now illegal to unlock your smartphone. 

Through a decree from the Library Of Congress through the Digital Millennium Copyright Act, as of Jan. 26, 2013, the exception explicitly allowing consumers to unlock any new smartphones they purchase has been ended.

Unlocking smartphones is a way for consumers to change the SIM cards in their devices so they can use it on a different carrier. For instance, if you unlocked your Samsung Galaxy S 3 you could then change carriers from AT&T to T-Mobile by replacing the SIM card.

What Is The Unlocking Petition All About?

A petition has been presented to the White House on its “We the People” website, which allows U.S. residents to entreat the U.S. government to address particular concerns. The White House is committed to respond to any petition that gets 100,000 signatures.

Here is the text of the petition:

The Librarian of Congress decided in October 2012 that unlocking of cell phones would be removed from the exceptions to the DMCA.

As of January 26, consumers will no longer be able unlock their phones for use on a different network without carrier permission, even after their contract has expired.

Consumers will be forced to pay exorbitant roaming fees to make calls while traveling abroad. It reduces consumer choice, and decreases the resale value of devices that consumers have paid for in full.

The Librarian noted that carriers are offering more unlocked phones at present, but the great majority of phones sold are still locked.

We ask that the White House ask the Librarian of Congress to rescind this decision, and failing that, champion a bill that makes unlocking permanently legal.

The petition is now nearly a month old, having been started on Jan. 24 this year. It has until Feb. 23 to garner 100,000 signatures. As of the afternoon of Feb. 20, the petition was still about 12,000 votes short of obliging the White House to respond. 

Why Is Unlocking Important?

Consumers can face financial hurdles and loss of choice if the unlocking ban remains in effect. The most obvious problem is for overseas travelers who want to unlock their phones so they can use a local SIM card and avoid the exorbitant voice and data charges that domestic carriers like AT&T charge for foreign use. Consumers may also want to unlock their phones to switch carriers or if they want to sell their phones to independent third parties. 

The carriers and manufacturers, meanwhile, stand to benefit from the unlocking ban. If consumers are forced into contracts when they buy their phones, they cannot easily switch carriers without hefty early termination fees. Manufacturers benefit because if somebody wants to join a new carrier, they have to buy a new phone. Wireless trade groups like the CTIA look out for the interests of manufacturers and carriers (especially the carriers) and have endorsed the unlocking ban.

Who's Behind The Unlocking Petition?

One of the petition’s organizers is Sina Khanifar. He started a website while at college in 2004 called Cell-Unlock.com that sold software that unlocked consumers’ cellphones. Shortly thereafter he was hit by a cease-and-desist letter from Motorola alleging that he was circumventing DMCA rules that prohibit unlocking phone.. With the help of the founder of Stanford's Cyberlaw Clinic, Jennifer Granick, an exemption was created in the DMCA that specifically allowed consumers to unlock their phones. That exemption expired on Jan. 26.

Khanifar does have some incentive to make cellphone unlocking legal. The Cell-Unlock website is still active and is being run by his brother, Sohail. 

The other organizer of the petition is Derek Khanna, a former staff member of the Republican Study Committee who was infamously terminated from the group after releasing a memo on copyright and intellectual property legislation that was not well received by the Grand Old Party. Before his termination, Khanna was regarded as a tech-savvy young member of the Republican party. He is now a visiting law fellow at Yale University.

Want to end the unlocking ban? Sign the petition by Friday to ensure the White House responds. 

Choosing the right mobile carrier is a big decision for everyone from individuals to small and large corporations. There are lots of factors to consider in making the right choice, from coverage areas and reliability to speeds and technologies to what handsets are available. Just as important, the choices you make can make a huge difference in the cost of your mobile service.

For individuals, you could be talking differences of $40 per month or more. Multiply that by every mobile worker in your company, and pretty soon you're talking about real money.

That's why ReadWrite wants to know about how satisfied you are with your current mobile carrier, and what might entice you to switch. And that's why we put together this little 9-item questionnaire: the ReadWrite Mobile Carrier Survey. (There are also a few demographic questions included at the end, so we can better analyze the results.) Once we have enough responses, we'll put together a post detailing the insights we gained, so if you'd like to share additional thoughts about your mobile carrier choices in the comments, we'll be listening.

Take the ReadWrite Mobile Carrier Survey now!

Image courtesy of Shutterstock.

We’ve all been there. You are at a crowded event, taking pictures with your smartphone and trying to share them on Facebook or Twitter but the damn photo just won’t upload. The data network you are using is clogged because too many people are trying to do the exact same thing you are: making phone calls, sending texts, uploading pictures and streaming video. With everybody trying to do the same thing at the same time, nobody can actually do anything.

The Big Arena Problem

Like other mobile carriers, AT&T has been working on solving this “big arena” problem for a while. It has been working to improve its DAS – Distributed Antenna System – for several years and has been moving to place it in venues across the country, including Lucas Oil Stadium in Indianapolis and the TD Garden in Boston. For the Super Bowl at the Mercedes-Benz Superdome Sunday night, AT&T had its DAS system up and running with 11 temporary COWs (Cells On Wheels) towers to help the data flow.

So, when the lights went down on the Super Bowl, fans were still theoretically able to make phone calls and tweets to their heart’s delight.

Blackout Boosted Data Usage

According to AT&T, the busiest data traffic came during the halftime show when Beyonce was performing - and during the blackout itself. AT&T users consumed 78GB of data on the in-stadium network during the hour, more than twice what they did during the busiest hour of last year’s Super Bowl in Indianapolis. 

During the 34-minute power outage, AT&T users sent twice as many texts, consumed 10GB of data and made more phone calls than they did at any other hour during the game. This makes perfect sense considering that the users were living in the middle of a live news event and had nothing to do but putz around on their phones while the stadium lights returned. 

Total data usage for the entire event was 388GB on the in-stadium network. That is a lot of photos, even for the 71,024 officially in attendance at the game (many of which were likely not AT&T users). That was an 80% increase in traffic from the Super Bowl in Indianapolis. In addition, AT&T users made more than 73,000 calls during the Super Bowl. Even if everybody in the stadium was an AT&T user, that is more than one call per person. In likelihood, it was probably more like three or four per AT&T user.

Of course, many of these numbers are artificially high because of the extended delay in the middle of the game. Judging data from the Super Bowl or any other singular event can lead to suspect conclusions. But if there is one thing to take away from the Super Bowl in New Orleans in relation to AT&T’s cellular traffic - it is that more and more people have smartphones and they are using them more and more. This was the dominant theme of mobile in 2012 and it continues into 2013 and beyond. 

Top image: Mercedes-Benz Superdome, New Orleans, Louisiana, courtesy Wikipedia.

AT&T just had its biggest smartphone sales quarter in history. In an announcement today, Ma Bell said that it sold more than 10 million smartphones over the fourth quarter, including  record sales for both iPhone and Android sales. 

If you are an iPhone or an Android fan, there are definitely things to like about AT&T’s announcement. Yet, if you look closely, you will note that there is more for iPhone fans to enjoy than for Android.

Of the three major carriers in the United States that carry the iPhone (AT&T, Verizon, Sprint), AT&T has long had the highest rate of Apple users. This is a lasting effect of the fact that AT&T had exclusivity on iPhone sales in the U.S. for nearly four years (July 2007 until March 2011, when Verizon came out with its iPhone 4S). In the second quarter of 2011, 72.5% of smartphone purchases on the carrier were of the iPhone variety. In the third quarter, the iPhone constituted about 70.1% of its AT&T’s smartphones sales. 

We can reasonably assume that AT&T’s sales rate of iPhones will be approximately 68%-70% for the fourth quarter, given the historical trend of Apple sales at the carrier. Yet, if AT&T is saying that Apple sales were a quarterly record, then the number should be higher than the 7.6 million iPhones it sold in Q4 2011. 

The leftover AT&T sales presumably went to Android, though it is curious that AT&T did not mention Windows Phone sales in today’s release. Nokia released the Lumia 920 exclusively to AT&T in Q4 and HTC released its Windows Phone 8X to the carrier in the quarter as well. It is likely that AT&T sold between 2.1 million and 2.4 million Android devices during the holiday season, if we taking the “record” Android sales claim from the carrier seriously. 

As companies give final reports on 2012 numbers, we note that each successive story shows that last year was the year that mobile truly exploded. Look for more record breaking numbers to come from other manufacturers, carriers, app developers and services as companies continue to report their numbers from last quarter. 

The mobile payments industry is stuck in neutral. The ability to pay for your goods and services at brick-and-mortar locations from your smartphone is a dream of technologist and financial companies, but the realities of a complicated industry with billions of dollars at stake and too many moving parts has stymied progress. 

Well, almost.

No Momentum For Big Mobile Payments Players

The companies with the biggest vested interests in mobile payments are all multi-billion-dollar, publicly traded behemoths. This group includes the payment processors like Visa, MasterCard and American Express as well as giant technology companies like Apple, Google and PayPal. The banks of the world do not want to be left out in the cold to become the “dumb pipes” of the payment industry (places where money is merely stored and transferred). And the mobile carriers - Verizon, AT&T, Sprint and T-Mobile - want their slice of the mobile payments pie. Every one of those companies has some derivation of a mobile payments system that could be seen as ill-conceived (PayPal), immature and un-deployed (Isis from the carriers), stuck in the maelstrom of competing interests (Isis as well as Google Wallet) or illogical (various mobile payments systems from the payment processors). When it comes to the top of the so-called mobile payments market, there are too many moving parts, too many squabbles and not enough infrastructure or actual solutions. 

But the very mess being created by the big boys in mobile payments is opening opportunities for fast- moving startups that understand that the best way to make mobile payments work is to place their services inside as many physical retail spaces as possible. Right now. Not preparing for some theoretical future where everything is all of a sudden ripe for success.

The leaders in the mobile payments space are not MasterCard or Google. The real leaders are little startups like Square, ShopKeep, Dwolla and LevelUp. These companies see an opportunity and are rushing to fill it, leaving behind the big bureaucracy and striking real partnerships with real business.

LevelUp's Small-Time Approach

LevelUp is a good example of a small mobile payments provider creating traction at the bottom of the market. The Boston-based startup (which is a derivative of social location app SCVNGR) provides QR-code-based payments for local merchants by providing businesses with Android-smartphones to act as scanners that process payments from the LevelUp smartphone app. It now has 500,000 users and just completed its first 2 million transactions. Those numbers are small potatoes compared to the big payment processors, but in many ways LevelUp is the bellwether for the progress of the mobile payments industry in the United States. 

LevelUp thinks outside the box, thinks big thoughts, makes significant partnerships, and perhaps most importantly, actually finds its way into actual businesses. LevelUp has expanded to several cities in the U.S. and its growth is accelerating. It took LevelUp 424 days to reach its first million transactions and about 100 days to reach the next million. Unlike the big payment processors (or even startups like Square), LevelUp does not charge an interchange fee (taking a percentage of each transaction) for every payment it makes. LevelUp makes money by offering deals to consumers within the app. For instance, the app will take $3 off your burger the first time you visit a restaurant and pay with LevelUp. You come back enough times and pay with the app and you get better rewards. Fundamentally, it is an advertising and data business model that LevelUp believes will be central to the future of mobile payments.  

LevelUp has gone from an app that makes payments to a platform that provides payment capabilities. In addition to its apps on iOS, Android and the mobile Web, it also partners with companies that wish to have a mobile payments presence themselves. These custom-branded mobile payments apps can be used by merchants to provide deals to its customers as well as process the transactions themselves. LevelUp says that it has sold many of these custom-branded mobile payments apps but so far it has announced only one, with Washington, DC-based eatery Sweetgreen. 

The startup is now looking to expand, announcing on Wednesday a partnership with a mid-tier bank – First Trade Union Bank – to create a mobile payments app for its customers. The app will integrate First Trade Union banking features with LevelUp’s payment and loyalty functions to provide an app that will likely be able to check your balance and make a payment at the same time.

At first blush, this may seem like a shrug-worthy event for both LevelUp and First Trade Union. A middling startup and a middling bank just made an app. Great. So what?

Tackling Mobile Payments Without The Innovators Dilemma

The fact of the matter is that LevelUp and its kin (Square, ShopKeep etc.) are going after a key segment of the American retail market – small businesses and small banks that make up a giant swath of the American economy. One bank or one eatery chain may seem small compared to Visa or MasterCard’s footprint, but when you put all of those pieces together they can become a powerful force. And one that the biggest so-called players are not penetrating while they argue amongst themselves and wait for inertia to begin moving in their direction.

“In my opinion it's not just that they're big and thus slow, it's that they have the mother of all innovator's dilemma's. They all make money in the wrong ways (and huge sums of it) so taking advantage of this new market is really tricky. My belief is that mobile payments and the next-gen of [point-of-sale systems] are all driven by data and advertising,” said SCVNGR and LevelUp founder Seth Priebatsch. 

The innovator’s dilemma, as far as the payment processors go, is a big one. American Express, Visa and MasterCard want to move aggressively into the emerging mobile payments industry - but cannot do so without significantly disrupting their existing business models. That's why they seem to drag their feet - and force the rest of the payments industry get down on their knees and crawl with them. Companies like Google are blocked because they are forced to deal other companies’ innovators dilemma and do not have the resources or motivation to attack the bottom of the retail industry piecemeal the way Square or LevelUp do. 

“It's easy for me, ShopKeep, CloverOS to go after that because we don't make any money off of anything else and so forgoing those other rev streams is easy. But for [American Express], giving up $10 billion in interchange is too tough a pill to swallow on a gamble that data/advertising is a bigger market. For Isis, their parents make money off of data and wireless plans, so it's just not a key priority or easy thing to shift the model to be competitive in the new mobile payments space,” Priebatsch said. 

Eventually, the large companies will get their act together and make a concerted push towards actual, ubiquitous mobile-payment solutions on the ground level. But that process is taking longer than many pundits and consumers hoped it would. In the meantime, the startups of the mobile payments world are taking advantage. 

Lead image courtesy of Shutterstock.

Guest author Tim McCormick is a product developer & writer in Palo Alto, CA interested in publishing, learning technology, and urban innovation.

Over the last six months, I’ve made an experiment of giving up my $90/month cellular + data plan, and exploring alternative ways to use my smartphone (iPhone) costing as little as $5/mo. The key point is that you don’t need a contract or a subscription to use a smartphone, contrary to just about everything you ever hear.

RFR IPhone Next, concept by Fabio Merzari / RFR Designers I’ve come to think that it is not only often possible to largely cut out phone costs via these methods, but they actually provide a helpful path to other goals such as better prioritizing your time and attention, lowering stress and disruption, improving online reading patterns, and making you more connected to place and local community.

This isn’t about dropping smartphones or nostalgically longing for a pre-cellphone era or an uncontaminated, unplugged, “In Real Life.” It’s about using smartphones in smarter ways, exploring their amazing potential while limiting their cost, intrusiveness, addictiveness, and other problems. It’s about making our tools serve our goals, rather than accepting, as Marshall McLuhan said, that “First we build the tools, then they build us.”

I admit there is some hacking and rough spots in this, as I am piecing together various tools and workarounds. Also, it is more useful to those not locked in to a phone contract, and it’s oriented to the U.S. environment, which has some particular issues such as unusually high costs, pervasive carrier-locked phones and contracts, whereas the service landscape is different in other places. However, I believe much of this applies broadly, the potential benefits are powerful, and this is really a proof-of-concept: in future providers will put these pieces together into seamless, user-friendly, marketable services.

So here are the steps. Actually, almost all can be done independently and each has its own benefits, but done together they can add up to nearly cost-free smartphone service:

1) Set up or find wi-fi (wireless internet) networks

at home, work, or any place you spend time. Suffice it to say that if you have Internet at home, or go to libraries, Starbucks, McDonalds, Whole Foods, most coffeeshops, etc., then you can get wi-fi access fairly easily for free.

2) Turn off your phone’s data service.

(On an iPhone, go to Settings > General > Network > Cellular Data -> off). Now, instead of using your cellphone’s data plan, your phone will start using free wi-fi (when available) to browse the Web, check email, etc. Check how and where it works.

3) Set up VOIP calling software on your phone

such as Skype or Talkatone or Google Chat. These are free apps that let you make and receive phone calls via an Internet connection such as the wi-fi you’re now using.  Typically you can call free to other users of the program anywhere, or call to any number for a relatively low fee.  For example, I use Skype and pay $2.99/mo for unlimited calling to any # in U.S./Canada, with cheap rates to call other countries.

(c) 2011 Sigfrid Lundberg, CC-BY-SA-2.0

4) Set up a virtual number, and voicemail transcription, e.g. with Google Voice.

Various services, including the free Google Voice, let you set up a number that can redirect to whatever other phone or phones you want. This is helpful for various reasons, such as letting you switch easily between phones and locations without having to update the people who might call you. For present purposes, it can help you transition from your current cellphone plan to a plan-free, low-cost alternative.

First, sign up for Google Voice and pick a number. Then set it to redirect to your current number, and test it. Then, set it to handle voice mail for that number, and you have an extremely useful new feature that will store any voicemails in your Gmail, transcribe them, and email + text you the transcript. Admittedly, the transcription is often quite faulty, but I find that 90% of the time it is sufficient to get the gist of the message e.g. tell you whether you need to call back, pick up milk on the way home, or sometimes actually listen to the message to get the details right. If you use Google Voice for texting, you also get all texts sent/received nicely archived in your Gmail, and you can text from a Web browser, a very convenient alternative to your phone if you happen to be sitting at a computer.

5) Unlock your phone, and switch out the SIM card for a pre-pay card

“Unlocking” means changing settings on a phone so it is not limited to working on a specific carrier’s network, and can for example be used while traveling abroad. Some carriers now offer phones unlocked by default, or will let and help you unlock them if they are off-contract. You can also buy phones that are unlocked and no-contract (usually at a higher price than the subsidized, with-contract price). I expect that unlocked, inexpensive, Android-based smartphones will become increasingly pervasive here before long, though, as they already are outside the U.S.

Once your phone is unlocked, you can replace the “SIM card,” a small plastic chip stored in a retractable tray or under the phone battery. Putting in a different SIM card will associate the phone with a different number and (possibly) carrier.

Find out what prepaid SIM cards are available for your phone (note, it may depends on which carrier you got the phone through), and order a card with, say, $25 credit to test it out. Pop out the old SIM card, put in the new one, and add the new card’s phone number to your Google Voice setup so that GV will send texts to it and (optionally) route calls to it.

If this all works to your satisfaction, you are now ready to completely bypass your old cellphone carrier. You can now cancel your mobile subscription (typically for a fee, if you are still within contract, of course).

(c) 2011 Sigfrid Lundberg, CC-BY-SA-2.0

7) Consider getting a mobile hotspot, especially via Clearwire or Freedompop.

Mobile hotspots are small devices that pick up cellular networks (3G and/or 4G) and use them to create portable wi-fi networks. Clearwire, an upstart telecom infrastructure provider, offers 4G hotspots for $35 or $50/mo that have bandwidth caps but (unlike incumbent carriers plans) neither data limits nor contracts.

Clearwire also provides much of the infrastructure for hotspots offered by other companies such as Sprint and Freedompop. Freedompop is an intriguing new entrant, a LA-based startup backed by Skype co-founder Niklas Zennstom that offers mobile hotspots for no monthly fee at low data volumes (up to 500MB/month), $49 for a USB stick hotspot, $89 for MiFi-style multi-device hotpot, $10 for 1GB, and other options up to $60 for 10GB/mo.

Particularly with an unlimited-data hotspot such as Clearwire’s, a great option is to use the hotspot for all of your Internet access, at home and away from home. This might help you fully cable-cut, i.e. entirely get rid of your cable/DSL provider such as Comcast, Time Warner, or AT&T. Also, incumbent telcos’ home internet service is frequently suspected of deliberately degrading 3rd-party, VOIP phone services; in my tests, I’ve often had difficulty with VOIP on incumbents’ lines, and hardly any problems with Clearwire or commercial wi-fi such as at Starbucks.

Commentators typically say that the Achilles Heel to mobile hotspots is requiring users to carry another device with them, to get phone access on the go. I actually have found this to be a very minor issue — I just habitually put the hotpot + charger in my bag when I go out, because I use it for phone, laptop, and tablet (Nexus 7), and I almost always have my bag with me when out. The hotspot is only the size of a matchbox, so if I want to put it in my pocket, it’s quite easy.

So that’s how you set this up. Overall it’s a bit “under the hood,” probably more than a typical phone user would want to try currently, but it points out future possibilities.

Lead image: (c) 2009 Vox Efx, “Me and Me – Day 89″, CC-BY-2.0 

There is nothing like a disaster to bring people together. In a rare show of decency, AT&T and T-Mobile have teamed up to provide their networks to people affected by Superstorm Sandy this last week. How long will the partnership last and what does it mean for the future of cellular collaboration - during natural disasters and otherwise?

AT&T and T-Mobile will combine networks to offer non-roaming calls and data on whichever network happens to be available in a given area of the Sandy-ravaged East Coast. Consumers will not notice the difference as the service will be managed by AT&T and T-Mobile on the back end. All consumers of T-Mobile and AT&T need to do is dial out, and the carriers will take care of the rest. 

AT&T and T-Mobile can achieve this temporary integration because the carriers share a common standard for their 2G/3G cellular services. Both are built on the ubiquitous GSM/UMTS standard and their networks are very similar from a tower and spectrum standpoint. Those similarities are one of the reasons that AT&T bid $39 billion to take over T-Mobile in 2011 before the Department of Justice and Federal Communication Commission expressed reservations and AT&T withdrew its offer. 

Something Needed To Be Done

According to the FCC, a quarter of cell towers in 10 Mid-Atlantic to North Eastern states from Virginia to Massachusetts were knocked out due to Sandy. Some were damaged by wind, while others, such as several from Verizon in New York City, were affected by flood waters. For its part, Verizon has deployed four Wireless Emergency Communication Centers in New York (on Staten Island) and New Jersey. Verizon also has several mobile “stores on wheels” in the area. The company is offering device charging and free domestic phone calls to local residents. Verizon said that as of this afternoon that 96% of its service sites in the area of Sandy are operational.

The collaboration between AT&T and T-Mobile could present a blueprint for how mobile carriers handle future natural disasters. Verizon and Sprint also share a common cellular standard and could team up when needed to strengthen network coverage during emergencies. 

A Painful Case Study

Hurricane Sandy provides an interesting case study in how the cellular infrastructure of the U.S. can withstand disaster situations. The good news is that most of the carriers’ towers and infrastructure survived - providing a semblance of coverage for most people. In addition, the carriers have mobilized quickly to repair service outages. The collaboration between T-Mobile and AT&T shows that, for at least a couple of days, the carriers can put aside their differences for the common good.

The bad news is that the parts of the carrier’s networks that did not go down, quickly became congested with voice and data transmissions. So even many people with serve got  “circuits busy” messages or loss of data connections during and after the storm.

It is hard to imagine a storm much worse than Sandy, stretching out over such as wide and populated area. If there was truly a storm to test the carrier’s capability to provide service during times of distress, Sandy was it.