Category: Wireless Carriers

Buddy, can you spare $9B?

Posted on by Dr. Jonathan L. Kramer
Please feed the T-Mobile Kitty. (Photo illustration by Jonathan Kramer)

So T-Mobile, recently left at the alter by AT&T, is now looking for $9B to build out a LTE network that can compete with AT&T.

T-Mobile has a great start towards its goal when you consider that AT&T gave it $4B as a parting gift.  If you have some loose change or small bills, please drop it in Carly’s cup.  Heck, all she needs is another $5B.  Easy!

$9B’s a lot of investment money simply to split the market even more than it is, today.  It’s also interesting that T-Mobile seems determined to join the rest of the world by going to 4G via LTE rather than via its current industry-isolating path of HPSA+ (also known as “it’s 4G if we say it’s 4G”).

I continue to believe that T-Mobile will either join forces with Sprint (can you say “SprinT-Mobile”?) or T-Mobile will acquire one or several smaller regional carriers.  How about “Hello…Hello…Hello” for example.  A dark horse: Maybe Deutsche Telekom, T-Mobile’s German parent will sell off its entire worldwide wireless network to some small country…or maybe to Microsoft.

Only time…and money…will tell.

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The Spectrum Dilemma: What’s a Carrier to do?

Posted on by Dr. Jonathan L. Kramer

AT&T’s intended takeover of T-Mobile was supposed to give AT&T access and control of badly needed spectrum. The demands on spectrum are growing faster than Apple can sell iPhones. Unfortunately, while AT&T was busy trying to consume the 4th largest wireless provider in the United States and fighting with the Department of Justice, Verizon was quietly moving to buy up the undeveloped spectrum held by the major cable providers (a completely different bedtime story for the DOJ to dream about…as they apparently are starting to do).

The result? Verizon’s spectrum purchases have gobbled the available spectrum that might have otherwise been available for an AT&T purchase.

T-Mobile, the long-suffering ‘we don’t have enough spectrum’ player, also missed out on the opportunity to buy spectrum from the cable providers.

Both AT&T and T-Mobile are desperate for spectrum, so what are they to do?

The DOJ, as we have all learned, has a big problem when the number 2 and number 4 providers attempt to merge (something having to do with a little thing called Antitrust).

Might the next baby step for AT&T be to acquire MetroPCS? Maybe that’s T-Mobile’s next bid, too.

It makes sense for both AT&T and T-Mobile to be interested in acquiring MetroPCS because it has a nationwide PCS footprint that is only growing with its all-you-can-eat, no contract approach.

Or maybe the next step is more of a LEAP (Wireless, that is, which has been rumored to be an acquisition target).

Two things are for sure: First, AT&T needs more paired frequencies, and they need them yesterday Second, T-Mobile either has to mate with one or more smaller regional carriers, or try mating with Sprint. AT&T’s parting gift to T-Mobile of $4B for the failed marriage would make a lovely trousseau.

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Is Clearwire Heading to Bankruptcy?

Posted on by Dr. Jonathan L. Kramer

Five days ago I wrote about Sprint effectively casting off Clearwire to sink or swim on its own.  Perhaps I could have said, “sink or sink.”

Yesterday, October 11th, David Sterman (writing at SeekingAlpha.com) strongly suggested in a well-reasoned piece that Clearwire could go bankrupt by next year.

Mr. Sterman’s arguments about a possible (if not likely) Clearwire bankruptcy ring true in my ears.  He said in part,

In 2011, things got messier. Clearwire had always counted on generous financial support from its largest customer, Sprint Nextel (NYSE: S). (Sprint has made serial capital injections in Clearwire and now owns 48%, controlling 54% of the voting stock.) But Sprint has begun to express regret about pinning its 4G hopes on Clearwire’s network. Once Sprint started to make its own 4G network — using the stronger LTE technology — it was almost a matter of time before it announced a public divorce. In a meeting with analysts on Friday, Oct. 7, Sprint said it would soon stop selling phones that work in conjunction with Clearwire’s 4G network. This caused Clearwire’s stock to fall 30% that same day. And the selling may just be beginning…

Mr. Sterman’s focus on the numbers tells the test of the (sad) story:

Where does this leave Clearwire? The company had 7.7 million customers at the end of the second quarter, of which 80% came through Sprint’s enterprise-level relationships. Clearwire has also been pursuing retail customers through its direct sales efforts (at a cost of about $300 per subscriber in marketing expenses). This summer, management spoke of a full-year target of 10 million customers. But now, after Sprint’s  announcement, it’s not clear how Clearwire intends to draw the additional 2.3 million customers. In addition, the retail wireless business is fiercely competitive, which is why other Clearwire partners such as T-Mobile are also looking for an exit strategy.

Well, at least Clearwire’s frequencies will have some value in a buy-out before BK, or to an auction winner in BK.

Go read Mr. Sterman’s post.  Make up your own mind.

(Thanks for John Pestle, Esq. of the Varnum Law Firm  for pointing me to Mr. Sterman’s article.)

 

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Sprint to Clearwire: Sink or Swim

Posted on by Dr. Jonathan L. Kramer

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.

Jonathan

 

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TWC Deploys WiFi in SoCal

Posted on by Dr. Jonathan L. Kramer

Coming to (or already arrived at) a utility pole really near you in Southern California…  Time Warner’s new WiFi system!

With $15M of new strand-mounted WiFi access point equipment supplied by BelAir Networks, this new network is apparently intended to provided wide area WiFi coverage in TWC’s service areas.

Presently, TWC’s SoCal deployment is spotty at best, but this is just the beginning:

TWC WiFi So Cal Coverage 2011-09-25So, you’d like to see what the BelAir wireless access points look like installed in SoCal?  Here are two photos taken in Santa Monica by yours truly:

TWC WiFi Access Point on Montana Avenue in Santa Monica
TWC WiFi Access Point on Montana Avenue in Santa Monica
TWC WiFi Access Point on Wilshire Boulevard in Santa Monica
TWC WiFi Access Point on Wilshire Boulevard in Santa Monica

Belair Networks web site points to an interesting piece on the new network posted at FierceWireless: it’s worth reading.

Of course, a few tiny technicalities pop into my head with this deployment.

First, since this is not a cable service, and this is not a personal wireless service, under what regulatory authority does a statewide cable TV franchisee (like, for example, Time Warner) install these wireless access points in the public right-of-way?

Another interesting issue is that I’ve been saying for years that cable operators have to do away with subscriber drop cables.  Is this the door-opener for a last mile (really, last 100 feet) drop cable replacement?  Given that the node locations only cover a couple of blocks around the access point (I’ve checked by measuring signal strength on the SSID “TWCWifi”), the coverage v. capacity trade off looks favorable.

Wireless drops mean no more…well, fewer at least…truck rolls.  This is because in a wireless drop environment most new service installs and disconnects will required the subscriber to pick up and return the box to the cable office.  And without aging cables inside walls going bad, cable service quality should/may should be enhanced.

But wireless drops also require a switched channel selection process for most channels, especially for the lesser viewed channels, coupled with multicasting for the most commonly viewed non-premium channels.

It’ll be interesting to see the reactions of those who are concerned about or opposed to ANY wireless site RF proliferation given the signal strength involved versus the fact that these radios will be in installed residential area front yards, back yards, and side yards just feet from occupied structures.

The cable world is certainly changing…it’s becoming wireless, too.

 

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SprinT-Mobile?

Posted on by Dr. Jonathan L. Kramer

I have to wonder whether the following might happen:

1. The Department of Justice  is successful in its suit to block the proposed AT&T&T merger or AT&T gives up, pays T-Mobile the $6B cancellation fee; and then

(….hear in your mind’s ear the ethereal sounds of harps and chimes….)

2. King Deutsche Telekom–disappointed at the loss of suitor King AT&T–continues to peddle Princess T-Mobile as a bride for some other lessor noble suitor; and then

3. Prince Sprint steps up says to Princess T-Mobile, ‘Oh, please marry me, Highness!’;  but at about the same  time then

4. Prince Sprint suddenly remembers that he’s already married to an ugly wife, named Countess Nextel; and then

5. Prince Sprint calls the Royal divorce lawyers to rid itself of Countess Nextel (really, to profitably free himself of the Countess’s land sites and frequencies) to uses the divorce settlement to help finance the ‘reverse dowry’ it offered to King Deutsche Telekom); and then

6. Prince Sprint and Countess Nextel go their separate ways (likely some lesser suitor will step up to protect Nextel’s honor and propose marriage); and then

7. Prince Sprint and Princess T-Mobile wed uniting their lesser kingdoms into one land, and then

8. Many of Princess T-Mobile’s hand maidens (they’re called employees in T-Mobiledom) find themselves put out of the castle, while the lucky few other retainers are invited to pledge their allegiance the court contractors of Prince Sprint, but

9. The serfs (oddly called ‘subscribers’ for some strange reason) in the newly combined Kingdom of SpriT-Mobile see no difference in their lives.  They continue to pay their monthly tribute to the Prince and Princess to be allowed access to the expanded lands of Kingdom and the privilege of communicating with other serfs of SprinT-Mobile, and serfs in the other aligned Kingdoms.

The new Royal couple might even have their own Royal Coat of Arms:

…and be known by the Hollywood name of “Sprin-Tee”!

One has to wonder when such a story might come true!  For the meantime, this is just a fanciful parody.  Yup…just a parody.

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Actual Complaint: U.S. v. AT&T/T-Mobile

Posted on by Dr. Jonathan L. Kramer

Attached to this post is the antitrust complaint filed today by the U.S. Department of Justice against AT&T Inc., T-Mobile USA, Inc., and Deutsche Telekom AG (T-Mobile’s parent).

Case No. 1:11-cv-01560, assigned to Hon. Ellen S. Huvelle

25 pages.

CLICK ON THE LINK BELOW TO DOWNLOAD THE COMPLIANT IN PDF FORMAT (about 1 MB)

ATT_Tmobile_Complaint

 

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It’s the Money, Stupid!

Posted on by Dr. Jonathan L. Kramer

In a copyrighted story that appeared in the 8/11/11 edition of Wireless Week, Maisey Ramsay wrote about an AT&T/T-Mobile merger document that appeared on the FCC’s web site, and then disappeared few hours later.

According to Maisey’s story, the interesting AT&T document showed that if the Commission approves the proposed T-Mobile merger, AT&T will expand its high speed data network to rural areas beyond that which they’ve already agreed to serve.

This is an interesting revelation given that the wireless carriers have claimed that its local governments that have stymied their growth through right-of-way regulations that they assert block deployment.

Yeah, right.

Of course we know that those carrier-claims are hollow, and that smaller communities go begging for modern celular/PCS/LTE/AWS services and high speed wireless internet

According to the article:

“AT&T senior management concluded that, unless AT&T could find a way to expand its LTE footprint on a significantly more cost-effective basis, an LTE deployment to 80 percent of the U.S. population was the most that could be justified,” AT&T counsel Richard Rosen stated in the letter.

The company said its merger with T-Mobile would spread the cost of the LTE expansion over a larger revenue base, allowing it to “better absorb the increased capital investment and lower returns associated with deploying LTE to over 97 percent of the U.S. population.”

Thanks, Richard…  You’ve confirmed what we’ve known, and what the Commission needs to know.

It’s all about the money…the carriers’ money…

…and not about claims that it’s the local governments are blocking deployment.  It’s the money, stupid!

-Jonathan

 

 

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Oh Thank Heaven for T-Mobile Burners at 7-Eleven

Posted on by Dr. Jonathan L. Kramer

Attention TracFone, you now have more competition trying to knock you down from the top of the heap as the ‘burner phone‘ provider of choice…T-Mobile.

T-Mobile USA, Inc.  and 7-Eleven, Inc. have jointly announced that you can now buy a prepaid T-Mobile burner phone (with no term contracts, thank you very much)  7-Eleven® stores.

What’s better is that T-Mobile’s prepaid plans and services that run on its nationwide 4G network.  That means faster throughput for T-Mobile’s new burner customers including, ah, commercial activities such as independent pharmaceutical sales, and controlled detonations.

As early as 1994, 7-Eleven recognized its customers’ desire for affordable, no term contract airtime, began offering prepaid cards in 1994.

Starting just a few days ago (Aug. 1) 7-Eleven began offering its customers T-Mobile prepaid handset, the LG GS170 for a mere $29.99 (plus taxes and fees, of course)

According to T-Mobile…

the LG GS170 offers an intuitive user interface with one-touch speakerphone, large visible keys and a high-resolution color display. In addition, the LG GS170 features a VGA camera, MP3 ringtone capability, Bluetooth® 2.1, text and picture messaging capability, and email support packaged in a sleek, pocket-size design

“Industry projections indicate that prepaid service will continue its growth trajectory and is expected to comprise a significant portion of the wireless market within the next several years,” said Amy McCune, vice president of national retail for T-Mobile USA. “We believe 7-Eleven’s customers who seek accessibility and convenience will love this prepaid phone. They can expect to receive the high-quality customer service and access to a nationwide 4G network that T-Mobile users have come to expect.”

T-Mobile will offer a $50-per-month plan with unlimited talk, unlimited text and unlimited Web with no overage charges and the first 100 MB of data at up to 4G speeds, but why would true burner customers want to tie themselves down to such things.

Jesus Delgado-Jenkins, 7-Eleven’s senior vice president of merchandising, marketing and logistics knows how valuable prepaid burner cards are to his organization: “To give you an idea of how many prepaid transactions we conduct, consider that if all the prepaid cards sold on an average day at 7-Eleven stores were placed end to end, they would span more than 30 football fields.”

And don’t expect too much from the LG GS170.  As of the time I wrote this, the  T-Mobile LG GS170 showed that only “15 out of 49(31%)customers would recommend this product.”

Oh well.

Oh Thank Heaven!

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