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Jennifer Lopez's Viva Movil stores not doing so good

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July 5, 2014

Singer and actress Jennifer Lopez put in all the effort and glamor she could hope in the May 2013 launch of her new retail chain Viva Movil, which specializes in selling Verizon Wireless products to the Hispanic community.

But a little over a year later, her stores are not doing so good, however. Lopez unveiled Viva along with then-Verizon Wireless Chief Operating Officer Marni Walden in May of last year at the end of a painfully uneventful wireless trade show.

Draped in a chic and slinky white dress, Lopez stood in front of a giant display and flashing lights talking about the opportunity she saw in catering to the Hispanic market with family-friendly stores, more attentive services and 'J-Lo-inspired' smartphone cases.

Then in June 2013, Lopez, who serves as chief creative officer for Viva, attended the ribbon-cutting ceremony for the first Viva store in Brooklyn, New York.

But any hype garnered at the launch has since long faded. While Viva did manage to expand to 15 stores in the Hispanic-heavy markets of New York, Los Angeles, and Miami, awareness of the brand remains low.

We visited two Viva stores, one in the Los Angeles area and the original Brooklyn flagship location, where employees acknowledge some people walk in not even realizing it's a wireless store.

"More than one customer has come in asking for coffee," said a Viva employee who wished not to be named.

That Viva remains under the radar for consumers appears to be a missed opportunity for both Lopez and Verizon, which is eager to search for new areas of customer growth at a time when the industry is starting to slow.

Overall, Hispanics make up the fastest-growing demographic group of people in the United States and are a bunch of consumers very ripe for a more personalized experience when it comes to technology products and services.

Hispanic data usage is sixteen percent higher than the national average, according to a Nielsen survey, with 49 percent of Latino respondents saying they planned to replace or upgrade their smartphone within the next six months.

Members of the group are also twice as likely to upgrade their tablets within the next six months.

And of course, Verizon and Lopez aren't the only ones who have taken notice. In May of this year, T-Mobile partnered with Univision to create a Hispanic-centric wireless service, Univision Mobile, sold through Walmart and dealer stores.

"There's just certain things I get because I am one of those people, that maybe other people don't get," Lopez said in an interview last year. "I think being in the entertainment business, and that combined with building my own brand and being who I am, I come at it from a creative perspective that's a little bit different," she added.

Viva's campaign has largely been online, and is part of Verizon's "omnichannel" strategy of being able to sell services and products both at physical stores and online, according to Kim Collins, director of multicultural marketing for Verizon.

"The brand has been sustained by social media, and is very targeted," Collins said in an interview.

Now despite the big launch and high-profile face of Viva, Verizon treats it like any other indirect retailer. That also means when a high-profile device such as the iPhone 5S launches, Viva won't get the device for a week, with priority given to Verizon-owned stores.

The iPhone 5C, however, was there on Day 1, and that's interesting. It's not that Verizon Wireless actually ignores Viva. The employees were universally pleased with the support provided by Verizon, which certainly helps with sales training.

"Any issues that we could potentially have get fixed immediately," said Amed Gaitan, manager of the Viva store in Baldwin Park, California.

Overall, many of the Viva stores have actually flipped their logos so the Verizon name takes precedence over Viva.

"When we first started, people asked us if this was a clothing store," Gaitan said.

Located in a strip mall, the store does get decent traffic after work, Gaitan said, and he'll sometimes keep it running after the 8 p.m. closing time to accommodate some late customers.

Customers who do take the time to learn about Viva appreciate the different touches, Gaitan said.

"And we also get a lot of regulars," he said, noting that some people will come in monthly to pay their bills.

In other mobile news

The U.S. Federal Trade Commission is accusing T-Mobile of overcharging its subscribers with hundreds of millions of dollars in bogus fees.

The FTC has filed a lawsuit late yesterday alleging that T-Mobile earned an illegal windfall in recent years from 3rd-party merchants offering bogus text message subscriptions for things like flirting tips, horoscopes and celebrity gossip, among other things.

Those charges frequently weren't authorized by T-Mobile subscribers. The fees were allegedly concealed on customers' monthly bills.

As many as 40 percent of those customers hit with these monthly charges sought refunds, a fact that the FTC says should have been "an obvious sign to T-Mobile that the charges were never authorized."

The complaint alleges that the charges took place between 2009 until December of 2013, and that T-Mobile already had the documentation of very high complaint levels as early as 2012 but never did anything to correct the situation.

"T-Mobile knew about these fraudulent charges and failed to stop them or take any action," FTC consumer protection director Jessica Rich said on a conference call with the media.

The Federal Communications Commission is also investigating T-Mobile's alleged overcharges, she added.

T-Mobile CEO John Legere fired back yesterday, calling the FTC complaint "sensationalized, unfounded and without merit."

In a statement, Legere claims that T-Mobile stopped billing for premium texting services in 2013 and created a program for customers to receive full refunds.

He called on the FTC to hold the nefarious text subscription services responsible-- not T-Mobile.

"T-Mobile is fighting harder than any of the wireless carriers to change the way the mobile industry operates and we are very disappointed that the FTC has chosen to file this action against the most pro-consumer company in the industry rather than the real bad actors," he said.

The FTC doesn't yet have precise estimates for the number of customers affected or the total amount of bogus charges. Those issues will be settled in court.

The FTC engaged in settlement talks with T-Mobile before Tuesday's announcement but failed to reach an agreement, Rich said. The agency hopes to secure refunds for all consumers affected.

The FTC lawsuit comes as T-Mobile engages in an aggressive marketing campaign dubbed the "un-carrier" strategy.

"The goal is to turn the wireless industry around and in a meaningful manner, and T-Mobile's been doing that by eliminating contracts, dropping international roaming charges and offering to pay competitors' customers $650 to switch over," added Legere.

Speaking at a press event in Seattle in mid-June, Legere said with disdain about the billing practices of larger rivals AT&T and Verizon.

"They see everything as an opportunity to tell customers what to do and to gouge them," Legere said.

T-Mobile is itself in the process of finalizing a $32 billion merger with Sprint, according to various reports posted in June. If approved by regulators, the deal would unite the nation's third- and fourth-largest wireless carriers into a combined entity with subscriber numbers comparable to Verizon and AT&T.

In other mobile news

The German government said that it will cancel its contract with Verizon, citing some spying fears.

"The pressures on wireless networks as well as the overall risks from highly-developed viruses or Trojans are rising rapidly," Germany's Interior Ministry said.

"Furthermore, the ties revealed between foreign intelligence agencies and firms in the wake of the U.S. National Security Agency (NSA) affair in June 2013 reveal that the German government needs a very high level of security for its critical networks," it added.

The decision comes following several reports that U.S. intelligence agencies have been monitoring German communications networks, even to the point of tapping the mobile phone of German Chancellor Angela Merkel.

Last month, Germany said it didn't think it had enough evidence to pursue legal action over the Merkel affair, but that didn't stop German officials from condemning U.S. activities based on reports in the magazine Der Spiegel, which cited documents leaked by Edward Snowden among its sources.

Merkel herself has lent her support to the concept of the European Union building new telecommunications networks that would be more difficult for the U.S. to spy on, something she has discussed with French President François Hollande.

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And Germans aren't alone in their outrage. Upon hearing about the Merkel affair, U.S. senator John McCain called for the resignation of then-NSA chief General Keith Alexander.

That was largely lip service, though-- Alexander retired from military service in March 2014, to be replaced by Navy Vice Admiral Michael Rogers.

German carrier Deutsche Telekom will reportedly pick up where Verizon leaves off after getting the boot, and Reuters notes that Deutsche Telekom already has a contract with the German government for carrying its most sensitive phone calls and data on wireless as well as land lines.

In a statement, Verizon protested the German government's decision and said that there was nothing to fear from U.S. spy agencies.

"Verizon Germany is a German company and we comply with German law," Verizon spokesman Detlef Eppig said. "The US government cannot compel us to produce our customers' data stored in data centres outside the US, and if it attempts to do so, we would challenge that attempt in a court."

In other mobile news

Google just gave us a small preview of its upcoming 'L Release' of its Android operating system, due to be released sometime in the fall.

At Google I/O, vice president Sundar Pichai said that the next iteration of the mobile operating system, featuring more than 5,000 new APIs, is designed for form factors beyond mobile.

To be sure, Pichai outlined a few but new principles for the redesign of Android and Chrome OS, including contextually aware, voice enabled and seamless.

Engineering director Dave Burke highlighted some of the new features of the revised OS like personal unlocking that uses voice recognition, Bluetooth connections, and other custom options for skipping the PIN lock.

He also said that the new L release will run entirely on Android’s new 64-bit compatible runtime, ART, that provides performance improvement without developers needing to update any code.

Android design head Matias Duarte described the new look as “one consistent vision for mobile, desktop and beyond.”

“Material design,” as Duarte explained it, was the inspiration for the expanding and reforming user interface design inside the new Android release.

Developers will now be able to assign different elevations for design aspects and Android will illustrate that depth with shadows and lighting.

For example, Android TV is an extension of the Android SDK designed to fit bigger screens.

The user interface compiles streaming services, games and relevant information while enabling voice controls, search, and Google Cast support.

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Source: Verizon Wireless.

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