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October 28, 2014

I HATE TO SAY ‘I TOLD YOU SO’, BUT…

Predicting the future is a funny thing. Sometimes, I am entirely useless at it (I’m looking at you, lottery picks and sporting events), and sometimes I’m right in a way that is so unusual, I may as well have been wrong. In the last post, I suggested that reports of the SIM card’s death at the hands of Apple might be a bit premature, and in fact that they might have a bit of a struggle on their hands in the coming months. Well, I was incorrect - they couldn’t even make it a week without things starting to go wrong.

First to break was the news that AT&T have decided not to play nice with Apple’s network-hopping SIM. The SIM is designed to allow users to change networks whenever they want. So, say for example, a customer on T-Mobile in the US is headed to a region where coverage is not that great, or is travelling across the Atlantic to the UK (where providers EE have signed up as well). Not a problem for the Apple SIM, you can just switch networks. A fantastic idea in theory, but it seems that the US providers were not quite as on board as everyone thought. For example, if you register on AT&T with the Apple SIM, you immediately receive a message that states: “Once activation completes, this Apple SIM can only be used with AT&T. You will need a new Apple SIM if you change carriers in the future.” Oh dear.

Controversial T-Mobile CEO John Legere provided further evidence that all was not quite as it should be with the new SIM. His victorious tweet this weekend showed evidence that AT&T were locking SIMs so that they could only be used on AT&T, attempts to contact on Sprint were leading to an error message, and Verizon were missing altogether – leaving T-Mobile as the only network able to demonstrate that things were working as they should. It is, however, a small victory – if the Apple SIM only works as advertised with one provider, then you may as well just use that one provider’s SIM in the first place. (UPDATE: Legere has gone on to explain further in one of his 'tweetstorms')

There was more bad news to come. Back in September, Apple announced another revolutionary feature, Apple Pay. Using NFC (Near Field Communication) technology, users could store credit card details on their phone and use it to make payments. Once you are at the till with your purchase, you simply wave your iPhone at the scanner, and the payment is processed. It’s attractive to customers because it makes life easier, and attractive to retailers because it avoids the extra fees that credit card companies levy on purchases using their cards. This sort of advancement that makes so much sense, you start to wonder why no one else had thought of it until now. It turns out that actually, they had.

Several major retailers in the US are already starting to disable the NFC features on their terminals, including Wal-Mart and Best Buy, in a deliberate attempt to stop Apple Pay. This is because they, along with over 100,000 other US retailers, are already signed up to a similar initiative known as CurrentC, and there are other such payment systems planned and appearing all over the world. Unfortunately for the US, CurrentC is not due to be launched until 2015, which means that everyone loses out in the meantime.

So what does it all mean? Have Apple underestimated the market, or are they so confident in their brand and market power that they believe that the other guys will blink first in this epic game of corporate chicken? Do Apple care that a few US companies are resisting them (after all, they have twice the number of retailers happy to use their systems), or do they have greater global ambitions? I’m certainly ruling myself out of the prediction game after this, but I think attempting to guess at how things will pan out is missing the point.  What we should be asking are questions like: do we really need to be tied to SIM cards for mobile calls, or is this merely the networks attempting to retain control? And is it right that credit card companies charge 2% to retailers per transaction, or is there a better way of doing things? This is part of why Apple are as successful as they are – they ask the hard questions and their innovations force all of us to consider the future.

October 22, 2014

THE END OF THE SIM CARD?

If you have been paying attention to the online tech news, there’s one story that everyone is talking about: how Apple just killed the SIM card. The news broke at the launch of their new iPad, the Air 2, which they announced would ship with an ‘Apple SIM’ pre-installed. This SIM can switch between providers, giving the user a choice of which service to use without them having to swap the SIM out each time. AT&T, T-Mobile and Sprint have all signed up in the USA, and more will follow around the world following the Air 2’s launch. It’s believed that this innovation will eventually lead to the SIM becoming obsolete. After all, if you no longer need a separate SIM card to pick up a signal from any given network, then you may as well take the microchip off the SIM card altogether and just make it part of the device.

People seem to be taking this possibility very seriously. Gemalto, one of the world’s largest SIM card manufacturers, saw their shares drop in price by a fifth since Apple’s demonstration last week. Here at Telestial, however, we’re not  ready to pack up our things and go home just yet. This technology is not exactly new, after all. Our SIM cards offer a choice of provider and will switch automatically when you cross a border. It’s the result of years of hard work, including our own technical innovation and countless agreements with network providers. And this is where we think Apple may run into a few problems on their way to world SIM domination.

First of all, the people with the most to lose from this new innovation, namely the network operators that currently provide their own SIM cards, are also Apple’s biggest distributors. Very few people can afford to buy a brand new iPhone direct; they would much rather spread the cost over a period of months or years as part of a phone contract. It’s a model that has worked well for both parties so far, with customers getting access to the most modern smartphones for a relatively cheap upfront sum. If Apple do plan to get rid of SIM cards altogether, they may find themselves at war with the very people who have helped them get this far in the first place.

Apple have skirmished with providers already, and for the same reason. In 2011, they were fighting operators on several fronts, including how the App Store would be managed and whether they could remove SIMs altogether in order to make more space inside the handset for functionality. Back then, the networks all came together to gently suggest that doing away with SIM cards was not something they were particularly interested in. Even Apple’s compromise, a smaller SIM (known now as the microSIM) was very slow to be adopted. It was not until it was clear that the iPhones were a hit and in huge demand that networks relented and began to manufacture smaller SIMs. This success carried over into Apple’s next change, the nano-SIM, which was adopted by the network operators with very little fuss at all.

It is not just network operators that need to be wary. Customers should also be on their guard, and for one very simple reason: Apple have never done anything that could be described as ‘cheap’. Being expensive is a part of their brand attraction  (and part of what has made it the most recognisable brand in the world). You know that when you buy an Apple product, it has been designed to the highest possible standards and the price reflects that. If Apple are looking to cut network operators out of the SIM equation, it seems very likely that they will step in to take their place in some way. How they plant to monetize this opportunity remains to be seen. They might levy a small fee each time a user switches operators. They could charge for access to certain networks in certain areas, or even add a fractional amount to each data session you start on their SIM card (the SIM is currently for data only, but this may also change). Whatever they decide to do, there is a huge difference in paying a premium for your device, and paying a premium every time you want to use it.

However this saga unfolds during the coming weeks and months, we at Telestial are confident that the humble SIM card isn’t going anywhere just yet.

October 9, 2014

OUTNUMBERED

There are 7.2 billion people in the world, and more are being added at the rate of two per second. That’s pretty impressive, though not quite as impressive as what we’ve been able to achieve recently. After all, it’s taken us 200,000 years to get here. Mobile phones have been around for only 30 years, and yet in the time it takes us to make a new person, we’re making 5 mobile phones. And for the first time ever, the amount of active mobile phones in the world has overtaken the amount of people. We have just been outnumbered: all hail our new Android (or IOS) overlords!

It’s not surprising that attitudes are changing. We have moved from a world where your phone was static, fixed in place either in your home, on your desk or outside on the street, to a world where everything is portable. The latest advancements seem set to move an object that sits in your bag or pocket (assuming it doesn’t, ahem, bend) to one that you wear about your person in the form of a watch or a pair of glasses. And while it used to be the domain of spies, criminals or cheating spouses to own a second or third device, there are now plenty of reasons why you might want to own another phone.

Take travel, for example. If you’re headed overseas, you might feel that the fee charged by your provider to unlock your current smartphone handset is too expensive when compared with the price of standard cellphones these days. You may wish to travel with something ordinary to deflect attention from potential thieves, or it may be that you’re traveling to a place where recharging your power-hungry smartphone may not be possible every two days, and you want something that will last a little longer. You may even wish to upgrade your phone in order to travel, taking advantage of all the useful apps that are now available, such as maps, online restaurant reviews or translation software.

Here at Telestial, we are happy to be contributing to the world’s overpopulation of mobile phones. We believe in offering the greatest possible choice of options to our customers, at affordable prices.

October 2, 2014

EU ROAMING CHARGES - GLIDING TOWARD A CHANGE In April this year, consumers in the European Union received some welcome news – lawmakers announced that they would abolish roaming fees in all 28 states of the EU by December 2015. This would mean that a traveler from France going to Spain, for example, would pay the same for making calls in either country, an initiative known as RLAH (roam like you’re at home). However, a new proposal revealed in Italy last week makes things a little less clear. For one, there’s no longer any mention of a fixed date for the removal of these charges, and instead, a desire to create what they’re calling a ‘glidepath’. While we’re not entirely sure what a ‘glidepath’ is, it brings to mind network operators as a flock of majestic swans, drifting downstream toward the sea in their own sweet time. Ironically, the reasons behind the push to scrap these charges and operating networks’ reluctance to do so are exactly the same. Former EU telecoms commissioner Neelie Kroes wanted to use the change to encourage operators to invest in faster networks – but the operators are now saying that this expected loss of income would mean that they’re not able to make such investments. So what does this mean for consumers? It’s too early to tell, as nothing has yet been agreed. It does seem that there may be a move to a gradual phasing out of roaming costs rather than abolishment as initially proposed. There may also be a ‘fair use’ calculation, based upon average annual domestic consumption. Under these proposals, an amount of roaming would be permissible under this ‘fair use’ tariff, but once that is used up, higher charges will apply. Discussions are ongoing, but we will be keeping  a close eye on them. Don’t forget to check back here for all the latest news.

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