Competitive Intelligence Highlight
Sprint is First to Market with AIRAVE Femtocell, Addressing Coverage and Unlimited Calling
Type: Competitive Intelligence Report
Analyst: W. Ho
Report Date: Sep 19, 2007
Module: Wireless Services - U.S.
ID: CIR25273 |
Current Perspective: Positive/Neutral
Vendor Importance: Very High
Market Impact: High |
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Event Summary
September 17, 2007 - Sprint introduced AIRAVE, a femtocell-based access point that uses PCS frequencies to provide for unlimited calling in two markets, Denver and Indianapolis. At $15 for individuals and $30 for families, it is an add-on option to voice plans. The AIRAVE femtocell hardware unit is priced at $49.
Analytical Summary
• Current Perspective: Slightly positive on Sprint’s launch of AIRAVE, a hardware-based service solution that provides full in-building signal coverage and unlimited calling for $15 a month for individuals and $30 for families. AIRAVE adds to Sprint’s value proposition for wireline voice calling replacement, allowing Sprint to go directly after wireline services from competitors such as AT&T, Verizon and Qwest. It also provides a more flexible and mobile alternative than wireline services from bargain VoIP providers Vonage or Skype. The launch of AIRAVE is only tempered by limited market launch, and the knowledge that full national availability won’t be until 2008.
• Vendor Importance: Very high to Sprint, because the carrier needed to continue to roll out differentiated offerings from larger rivals. As the carrier has been on an ‘unlimited’ roll with Unlimited Access Packs in trial markets, unlimited plan launches in Puerto Rico and Unlimited by Boost plans, attacking MetroPCS and Leap, a femtocell unlimited calling offering fits into the trend. Additionally, it also solves a difficult problem of in-building coverage without resorting to the scarier (for Sprint) WiFi solution that minimizes cellular/PCS assets.
• Market Impact: High on the wireless services market, because Sprint has rolled out femtocell, a technology that has gained a lot of buzz and all carriers have considered or are still considering. Invariably, comparisons will be made against T-Mobile’s HotSpot @Home offering in both technology and pricing. Larger competitors are mulling over whether this technology complements or cannibalizes wireline parent voice access lines.
Recommended Competitor Actions
• T-Mobile should position its HotSpot @Home product in the Denver and Indianapolis markets as a less expensive service than Sprint’s, and one that has no geographic limitations.
• T-Mobile should note that if a HotSpot originated call is transitioned to the cellular network, the call continues to be rated as a free unlimited call, saving anytime minutes to the benefit of the consumer. Therefore, it’s more consumer friendly than AIRAVE.
• Verizon Wireless and AT&T should look into femtocells as a component of a fixed mobile convergence strategy with their wireline parents. Providing an unlimited calling option to wireline unlimited calling plans will have a place in the customer base.
• MetroPCS and Leap Wireless should note that unlimited calling is what their brands promise without the need of any additional hardware.
• Aside from also considering the above AT&T/Verizon Wireless recommendation above, Cincinnati Bell Wireless should continue to stimulate its CB Home Run offering with another handset.
• Alltel should continue to promote My Circle with unlimited calling as a built-in component of the My Circle plans. It should also promote the strength of its network that is based on its 800/850 spectrum assets in lay terms to highlight the lack of coverage issues.
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