Did Sprint+Network Vision-Lightsquared = Sprint+Clearwire+Softbank?

I’ve been thinking about why Sprint has now decided to sell itself to Softbank.

It seems to me that one possible answer would be to blame Clearwire and then LightSquared.

Clearwire was to be Sprint’s first (but not last) 4G answer, but WiMax never took off.  In fact, the only thing about Clearwire that took off were some of its major investors, like Google looking elsewhere to invest and actually make money on the investment.

Comes then Lightsquared, with its grand plan to deploy 4G services to various existing carriers using a very odd frequency band adjacent to the widely-relied upon GPS downlink band.   Sprint loved its new 4G provider, especially since Lightsquared was to pay $9 billion-ish to Sprint to use the new Network Vision platform.  While Lightsquared would be free sell its services through other carriers, it would be in a sense captive to Sprint since it would be a major network platform provider for Lightsquared’s services.  It seems clear that Sprint’s Network Vision project moved forward, certainly in significant measure because of Lightsquared’s funding commitment.

Then came that nasty little GPS interference problem and sunk Lightquared, and resulted in a bankruptcy filing.

Sprint was left holding a $9 billion bag looking for another funding source for Network Vision.  Before Softbank, no major replacements had stepped up.  Sprint began shuttering Nextel sites as quickly as they could to reduce that ongoing lease load while pushing new Network Vision sites out into the field.

Not fast enough, apparently.

Now comes Softbank to offer up a huge capital infusion and other goodies for a 70% stake in Sprint.  And, Softbank is eyeing Sprint’s nearly-kaput first 4G love, Clearwire.  Word on the street is that Sprint, tracking Softbank’s longing eye, will try to take actual control of Clearwire, which was something denied it by the original investment agreement that kept Clearwire as a separate entity from Sprint.  That would certainly make Sprint’s current love very, very happy.

One thing for sure: The T-Mobile+MetroPCS and Softbank+Sprint+Clearwire equations equal big trouble for the rapidly-disappearing smaller regional wireless carriers.

It would not surprise me to see virtually no regional carriers, and only four major wireless carriers in the U.S.: Verizon, AT&T, T-Metro, and SoftSprint.  Following, I envision a T-Metro split-up shortly after it figures out that all it did was to replicate the dumb Sprint Nextel technically incompatible deal that started Sprint’s slide into the current Softbank sale.

Then there would be 3.   Then you’ll hear the pin dropping on the table.


LightSquared files for Bankrupcy (Chapter 11)

     To the surprise of very few, LightSquared has filed for Bankruptcy protection under Chapter 11.

Given that the firm has virtually no path forward to use its frequencies to provide 4G-type services in light (no pun intended) of the apparently unresolvable GPS interference issues, Chapter 11 gives LightSquared a way to step back and see what it can salvage of their operations.

In a Chapter 11 bankruptcy proceeding, in most cases, the debtor remains in control of its business and operations as a “debtor in possession.” The day-to-day operations are subject to the oversight and jurisdiction of the federal court (and typically the trustee). The goals of a Chapter 11 proceeding is for the company to find the cash to emerge from bankruptcy having paid its creditors some portion of the amount due, cancelling or renegotiating some contracts, and then resuming normal operations after completing the bankruptcy.

It seems pretty clear to me that the $9B contract LightSquared entered into with Sprint will be a target for cancellation.  That will place even more pressure on Sprint to fund its Network Vision project.

A Chapter 11 bankruptcy proceeding is is very different from Chapter 7 proceeding.

In a Chapter 7 bankruptcy action the business ceases its regular operations.  The court-appointed trustee sells off all of the business’s assets and distributes the sale proceeds to the creditors. If there’s any money leftover after all the creditors are paid, that balance is returned to the owners/shareholders of the bankrupt company, and the company ceases to exist.

Sometimes a firm starting out on a Chapter 11 bankruptcy path can still end up shutting down.  It would not surprise me if that’s the case with LightSquared, especially if they are forced to sell off their licensed frequencies.

Time will tell.


Might Apple buy Sprint?

Okay, it sounds wild, but let’s look at this for a bit…

Sprint has committed $15B to Apple in connection with securing rights to market the iPhone to Sprint’s subscribers (let’s not talk about the newest Apple product, the iHeatingPad). That’s a lot of cash, and I’ll bet that Apple’s contract leave virtually no room for Sprint to get out from under the weight of an 800 pound Apple.

At the same time, the $9B Sprint was expecting from LightSquared seems to drifted away. This raises very serious questions about the future of Sprint’s touted Network Vision upgrade. As a result, Sprint’s plans to shutter some 30,000 cell sites, relying on the Network Vision project to make it possible…must have dropped to ‘maybe’ status, too.

Clearwire. That word has turned into a blackhole of cash for Sprint, and Google just helped further devalue Sprint’s, ah, majority investment by dumping the Google-held shares at a 90% write off. WiMax is not Sprint’s path forward–LTE is. Clearwire may be too late to Sprint’s party.

Sprint’s Board of Directors last month vetoed Dan Hesse’s plan to buy MetroPCS (for a 30% premium, no less). That puts Dan Hesse’s future outlook at Sprint at a 30% deficit (others say that number is even worse). Will there be new blood on the head of the pin, much less new confusions over the direction the pin is pointing? Hey, how about T-Mobile buying MetroPCS?

This month, Sprint seems to have tried…and failed…to get a network sharing agreement with T-Mobile, according to the Wall Street Journal. I guess that shots a hole in my idea about a SprinT-Mobile merger.

Let’s not forget the grandest of Sprint’s Grand Experiments: Nextel. Oh, you want to forget about that? Likely Sprint does, too.

With research firm Sanford Bernstein dropping its rating on Sprint, citing that Sprint might visit BK land, the Bad News Band keeps marching on. For a thoughtful look at this particular issue, see the SeekingAlpha story of March 20th by clicking here.

Now let’s consider Apple.

Apple has attained the status of a ‘mythical creature’ that can seemingly devour all that blocks it path.

Apple has been fanatical about controlling, to the n-th degree, every element of its users experiences with all of the Apple devices. It controls the look and feel of the user experience, and via the App Store all of the applications on iPhones that have not been subject to a jailbreak, as well as iPads of various operating temperatures.

It must peeve Apple that it decided to confine its iPhone and iPad devices originally on an exclusive basis to AT&T to run on that carrier’s less-than-robust and less-than-adequate-capacity network, and one that actually gave up spectrum in the failed T-Mobile love affair.

Now, at least, Verizon subscribers have a better chance at being able to enjoy close to 3G speeds with their iSomethings.

Oh, yes, there’s that cash reserve thing for Apple. It’s sitting on more cash than the U.S. Treasury, and since last Summer it has been the most valuable company you’ll find in the U.S., and maybe anywhere in the entire galaxy.

If Apple thinks about it, it can have its cake and eat it, too: Buy Sprint, fund and complete Network Vision, deploy 4G at real 4G speed, and dump all of the Sprint phones save for Apple iSomethings. Using the software defined radios of Network Vision, Apple can actually build a wireless network that is optimized for data (but still including the voice app that defines LTE). Siri may be the first step to Skynet, albeit with a programmed sense of humor. (How much wood can a woodchuck chuck? See here.)

For Apple, a Sprint purchase would yield it monthly cash flow that can be put back into expanding and optimizing the “Apple Wireless” Network Vision. And given Sprint’s majority ownership in Clearwire (and the 106ish MHz Clearwire controls in the U.S.), Apple would have a real playground to expand data capacity and speeds.

Maybe Apple might make apply the principles of the iTunes Store to Sprint to shift the marketing of Sprint services to the faceless online monolith. Buy a phone and activate service online. Forget about pins dropping.

It just seems right for Apple to continue its quest to control everything its users see and do with the iSomethings now and in the future by controlling its own data delivery network. At the same time, it can keep feeding iSomethings to Verizon, AT&T, and any other carrier that can’t afford to be left in Apple’s iDust.

With the passing of Steve Jobs, the direct minutia-level control he seemed to exert on Apple (at least according to Isaacson) has also passed. This may free up the current management of Apple to take the leap (no, not Leap Wireless) to controlling even more of the user experience, but from a new distance, all without asking “WWSD?”

Of course, Apple might buy T-Mobile instead–or as well–and do more or less the same thing, but that’s a thought best left for a future post.


As LightSquared Fades, What of Sprint?

As you likely know, the NTIA’s Assistant Secretary for Communications and Information, Lawrence E. Strickling  gave LightSquared a big, fat, wet Valentine’s day kiss when he wrote to FCC Chairman Genachowski saying, “…we conclude that LightSquared’s proposed mobile broadband network will impact GPS services and that there is no practical way to mitigate the potential interference at this time.”

You can read the full letter, which goes downhill from the quote above, by clicking on this link:  NTIA Letter to FCC Regarding LightSquared: Feb. 14, 2012.

While everyone else is talking about LightSquared, I’m wondering about the impact of the likely LightSquared disappearance from the arena on Sprint.  Just last June, Sprint and LightSquared announced that they had entered into a 15-year agreement for Sprint to promote LightSquared as its 4G solution (hey, does anyone remember a company called ClearWire who was promoted by Sprint to be its 4G solution?  I’m just ask’n…).

Under the Sprint deal, LightSquared was to pay $9 billion dollars and give Sprint another $4.5 billion in credits for LTE and satellite services.  Shortly thereafter, Sprint kicked the Network Vision project into high speed.

Side note 1: Network Vision, for those of you who have not yet seen the vision, ahem, is Sprint’s project to replace its BTS cabinets that do one thing on one band with shiny new BTS cabinets that can be easily adapted to provide multiple services on multiple bands at the same time.   That’s actually a smart thing from an engineering perspective, but it sure looks like Sprint was betting on LightSquared’s payments to fund a good portion of Network Vision.

Side note 2: The Network Vision project is connected with Sprint’s recently-announced plan to shutter 30,000-ish of its current leases as the new multiband BTS cabinets go in.  Shuttering that many site leases should save Sprint something on the order of $400 million per year, and make cell site landlords wary of entering into new leases that don’t have early termination fees (huh? Your lease doesn’t?  Too bad; so sad.)

So, what’s next for Sprint?  Certainly it has wisely given up on WiMax as a real, long term 4G solution.  It looks like everyone agrees that LTE is the real answer, so the sinking of LightSquared’s ship is hardly likely to re-float ClearWire’s boat in Sprint’s eyes (or any other sets of eyes for that matter).  Since Sprint recently missed out on the “Buy Your Next Band From The Cable TV Guys” deals, its even farther down the spectrum rabbit hole.  Sprint needs frequencies, and it needs them last week.

This brings me full-circle back to an earlier blog post, from last September, when I mused on the idea that Sprint and T-Mobile would make a mighty fine look’n couple, and I even worked up a possible wedding announcement:

See: SprinT-Mobile?

T-Mobile has kept a nice dowry of cash (and better, spectrum) from when the DOJ forced AT&T to leave T-Mobile at the alter.  So like Sprint, T-Mobile has a pressing need to get married.  If not to each other, then to others, but marriages are on the horizon.

See you at the wedding(s).  I’ll be at the bar.



Sprint to Clearwire: Sink or Swim

From the relevant portions of a Sprint news release issued today:

OVERLAND PARK, Kan. (Business Wire), October 07, 2011 – At its 4G Strategy/Network Vision Update event today in New York, Sprint Nextel (NYSE: S) updated the financial community on its plans to accelerate deployment of Network Vision and its plans to roll out 4G LTE on its licensed spectrum. Network Vision, originally announced in December 2010, is Sprint’s plan to consolidate multiple network technologies into one seamless network with the goal of increasing efficiency and enhancing network coverage, call quality and data speeds for customers across the United States.

Dan Hesse, Sprint CEO, said, “Our progress deploying Network Vision enables Sprint to extend and evolve our 4G leadership and to improve the experience for 3G customers. Our next-generation network and cutting-edge device lineup, combined with the industry’s best pricing plans, give Sprint customers the best experience in wireless.”

Sprint will begin a rapid national rollout of LTE on its 1900MHz spectrum.  Sprint plans to launch 4G LTE on its 1900MHz spectrum by midyear 2012 and complete the network build-out by the end of 2013. By the conclusion of 2013, Sprint’s 4G coverage footprint is expected to cover more than 250 million people.

Sprint expects to launch CDMA-LTE devices by mid-2012, with approximately 15 devices coming throughout the year – including handsets, tablets and data cards. Additionally, CDMA-WiMAX 4G devices, like the award-winning HTC EVOTM 4G, Samsung EpicTM 4G Touch and Nexus STM 4G, will continue to be sold throughout 2012.

What was missing from the press release?

Any mention of Clearwire.

Clearwire was positioned for years to be Sprint’s 4G service provider.  Sprint owns more than 50% of Clearwire, but only at arm’s-length.

Now it looks like Sprint has all but abandoned Clearwire to allow that firm to sink or swim on its own.  Sprint has effectively turned into one of Clearwire’s biggest competitors.

Adding insult to injury, Sprint recently inked a deal with LightSquared to allow that firm to come on to Sprint’s Network Vision platform as yet another 4G LTE provider.  LightSquared will also be a direct competitor to Clearwire via its retail outlets, which will in turn compete with Sprint.  If you’re confused, don’t worry: some of these deals don’t make sense, but hey, it’s wireless…

It’s been a tough time for Clearwire, and the times are only getting tougher.

My own experiences with Clearwire, if any indication, do not bode well for the chances for that provider.  Last May I signed up for its business class wireless service, which includes a static IP address (required to run web servers, mail servers, etc.).  When the equipment arrived, I was told that Clearwire had run out of static IP addresses in the Los Angeles area.  I ended up returning the equipment and cancelling the service.  It’s really too bad since their over-the-air speeds were great, beating DSL hands down, and giving Time Warner’s cable modem a real run for the money (and Clearwire’s cost for business grade service is less than half the cost of TW’s Business grade service).

I’m hoping that Clearwire can keep swimming, but there are a lot of sharks in the water starting to circle.




Sprint’s Network Vision Project – A Game Changer

I’ve already typed a bit about Sprint’s Network Vision project from the perspective of landlords, but this topic certainly deserves much more coverage.

Certainly, Sprint’s initiative to deploy a new technology scheme that allows others to sublease transmission capacity at Sprint sites changes the game for everyone, especially site landlords with legacy leases that don’t bar non-physical subleases.

With the confirmation that Sprint and LightSquared have inked a deal for Sprint to use Network Vision sites to deploy LightSquared LTE transmissions (for $9B, thanks so very much), and the in-place deal for Sprint to host Cox’s PCS services, the Network Vision project is turning out to be the vehicle that will transmute Sprint into a carrier for carriers, as as well as a competitor to its carrier customers.

I’m betting it’ll be interesting to see how the law suits pan out if Sprint’s network ever crashes for its carrier customers, but not for its own Sprint and Nextel customers.

From a planning perspective, how this type of collocation is permitted will be interesting, if it’s even disclosed to the local government.  This new deployment scheme will have a huge impact on significant gap determinations and least intrusive means analysis, since it’s foreseeable that the carriers won’t want to disclose (all) relevant information about this type of shared use.

We’ll see…


AGL Bulletin: With GPS Complications, Short-Term Site Growth May Elude LightSquared

From today’s (4/15/11) AGL Bulletin.

With GPS Complications, Short-Term Site Growth May Elude LightSquared

The tower industry’s dreams of being a part of LightSquared’s plans to deploy 40,000 high-power transmitters may have to wait. Given the potential for interference to its spectrum neighbor, GPS, the proposed nationwide broadband network may not trigger significant site leasing activity in the near term, according to RBC Capital Markets.

LightSquared’s system proposes to operate in the 1525-1559 MHz band, right next to the GPS downlink frequencies in the 1559-1610 MHz band.

“Given LightSquared’s current spectrum impairment (GPS interference in one of its L-band slots, and Inmarsat clearing requirements in the other slot that are not slated for resolution until 2013) and the availability of spectrum in other bands, we believe a conservative stance is appropriate with respect to LightSquared actually building out a significant network, even if it were to reach an agreement with Sprint,” RBC Capital Markets wrote in its April Equity Research Industry Comment.

In January, RBC first voiced uncertainties about LightSquared, even though it had its funding in place, because it noticed the carrier was slowing its build out. Then the National Telecommunications and Infrastructure Administration sent a letter to the FCC warning it about possible GPS interference.

“LightSquared significantly slowed its network planning and site acquisition activities near the turn of the year, and we are aware of continuing progress in only three markets,” RBC noted.

The aviation industry is very concerned about the possibility of interference to GPS receivers, which provide planes with navigation, according to Aviation Week. Manufacturers and users are currently testing GPS receivers for susceptibility to interference from the planned nationwide broadband wireless network. The FCC’s waiver grant required LightSquared and the U.S. GPS Industry Council to work together to investigate the possibility of interference and to identify ways to prevent that interference to GPS, if necessary.

However, in an ex parte teleconference presentation to the FCC on Jan. 19, the U.S. GPS Industry Council already presented the potential for LightSquared service to cause severe interference to GPS users.

“Simply put, the U.S. GPS Industry Council’s testing discloses that LightSquared’s very high output power from its planned 40,000 sites, coupled with its proximity in frequency to the very weak GPS downlink band, forms a witch’s brew for catastrophic interference to GPS receivers,” Jonathan Kramer, principal, Kramer Telecom Law Firm, wrote in his blog. “LightSquared has stated that it can take care of the potential interference to GPS users using filters. It’s unclear whether the filters are sufficient, or who would be expected to pay for the cost of the filters.”

All eyes will be on that receiver testing with those filters, which will be completed at the end of May with a final report due to arrive at the FCC on June 15.

If you don’t already subscribe to AGL Magazine and the AGL Bulletin and you’re a wireless professional…you’re not really. Subscribe today.


The GPS World Lines Up Against LightSquared

In yet another bold step to block LightSquared from initiating its high-powered terrestrial wireless service on a band adjacent to the GPS weak signal downlink band, a consortium of GPS manufacturers and industry users have formed the “Coalition to Save Our GPS” (on the web at SaveOurGPS.org).

This site has various news clipping and documents related to the anticipated interference to GPS from LightSquared’s planned operations.

Presently, the consortium members include:

Aeronautical Repair Stations Association
Air Transport Association
Aircraft Owners and Pilots Association
American Association of State Highway and Transportation Officials
American Rental Association
Associated Equipment Distributors
Association of Equipment Manufacturers
Case New Holland
Caterpillar Inc.
Deere & Company
Edison Electric Institute
General Aviation Manufacturers Association
National Association of Manufacturers

This is a very public ‘front’ for this fight.  Can print ads and radio spots be far behind?  I think not!

LightSquared has a report due to the FCC tomorrow (March 15). That was a particularly bad day for Julius Caesar; how will it turn out for LightSquared?


LightSquared v. GPS Users: We’ll know on June 15, 2011

At the direction of the FCC on January26, 2011 (See: http://tinyurl.com/lightsquared-fcc-file for all of the filings), LightSquared and the GPS Industry Council have formed a working group. The working group will conduct tests of LightSquared’s transmission system to determine whether LightSquared’s proposed filter solution will resolve the demonstrated potential for interference to GPS users within miles of each proposed LightSquared site.

The potential for LightSquared service to cause severe interference to GPS users was made clear in an ex parte teleconference presentation made on January 19, 2011 to the FCC by members of the GPS Industry Council.

Simply put, the GPS Industry Council’s testing discloses that LightSquared’s very high output power from its planned 40,000 sites, coupled with its proximity in frequency to the very weak GPS downlink band, forms a witch’s brew for catastrophic interference to GPS receivers. LightSquared’s system is to operate in the 1525-1559 MHz band, while the GPS downlink frequencies are in the 1559-1610 MHz band. You can read the ex parte notice and the presentation by clicking here.

LightSquared has stated that it take care of the potential interference to GPS users using filters. It’s unclear whether the filters are sufficient, or who would be expected to pay for the cost of the filters.

On February 25, 2011, Light squared submitted its first report to the Commission regarding its work with the GPS Industry Council. That report is linked here. The group’s next report is due on the Ides of March. The final report showing the results of the filter testing is due to the FCC on June 15, 2011.

To frame the uses and users who could be negatively affected by GPS interference, or the outright loss of GPS coverage, here’s an abbreviated list of users and uses:

Military: Locations; targeting; timing; network synchronization; stuff we don’t know about

Aviation: Precision landing systems; aircraft location; timing; network synchronization

Transportation: Vehicle location; timing; network synchronization

Local Governments E911; Vehicle location; timing; network synchronization

Industry E911; Vehicle location; timing; network synchronization; precision measurements; stuff we don’t know about

Non-Government Users Location; rescue; timing; network synchronization

Yeah, this is a big deal


LightSquared Turning Into LightQuartered

LightSquared, based in Reston, Virginia, is a nascent  provider of 4G services to wireless carriers.  Or, they’d like to be.  They are looking at some difficult times ahead in their initial roll-out.

The NTIA has expressed concern to the FCC that LightSquared will cause interference to GPS receivers, degrading or blocking location information for wireless handsets.  You can read that letter for yourself by clicking on the link below.


The government agencies concerned about GPS interference are  Departments of Defense, Transportation and Homeland Security.


Today, the aviation industry joined in expressing concerns regarding GPS interference.  The FCC has posted letters it has received from Hawker Beechcraft Corp., Diamond Aircraft Industries GmbH, and the National Business Aviation Association (a aviation-industry trade group).


This should be interesting!