Wireless Carriers

Analyst knocks quad play, cable wireless efforts

Dan O'Shea — Mon, 08 Dec 2008 09:28:57 -0500

Sanford C. Bernstein & Co. analyst Craig Moffett last week questioned the quad play-the idea that telcos and cable TV companies need to bundle voice, broadband Internet, TV service and wireless service-and more specifically the idea that wireless needs to be part of a bundle delivered by cable TV players. That's a knock on recent moves by cable TV companies, including Cox Communications's $500 million plan to invest in 700 Mhz build-out. Moffett said it is not clear that the cable guys can make a real difference or stake out any new ground in wireless, and he added that while bundles may reduce churn, their value is harmed by the discounts at which they are marketed.

Moffett does like Cablevision's approach to wireless, which includes a $300 million commitment to Wi-Fi combined with DOCSIS 3.0. It gives Cablevision an edge in part because the company's main telco competitor, Verizon Communications, has not pursued Wi-Fi. Moffett also had some harsh words for Clearwire's business plan.

For more:
- Light Reading's Cable Digital News has coverage
- Telephony also has this report

Dissecting the CenturyTel-Embarq deal

Dan O'Shea — Mon, 27 Oct 2008 12:03:24 -0400

CenturyTel's bid to acquire Embarq is surprising on at least a few levels. The companies may make a good network match, as CenturyTel's mostly rural market networks are combined with Embarq's properties in more urban, but still relatively rural, markets.

However, while Embarq has been rumored to be looking to make a sale for some time, industry watchers might have been expecting a different buyer, either a larger telco or a different peer than CenturyTel, which is actually quite a bit smaller than Embarq. Timing raises some questions, too, as the Federal Communications Commission is pushing changes to intercarrier compensation and the Universal Service Fund that could affect both companies. Those reforms have not fully played out yet, which in the eyes of some may make this a dangerous time to combine two companies that could be harshly affected by the reforms. However, Embarq CEO Tom Gerke suggested that any FCC decisions in these areas probably will be appealed, and that clarity is too far down the road to wait for while line loss, competition and market opportunities continue to move forward.

Meanwhile, CenturyTel also has some areas of interest that Embarq has not, to date, shared. One of those is TV, which CenturyTel has begun to embrace, both as a standalone service and part of a bundle. Embarq has instead focused on a strategy to push fiber deeper into its networks, with the primary intent to support growth in online video usage and however else customers want to use their bandwidth. The telco has not to date wanted to use these facilities as the underpinning for its own TV service. Will CenturyTel steer Embarq into the TV business?

Another area of notable difference is wireless. Neither company has made the cellular market a priority, but beyond that, there seem to be different future intentions. Embarq is winding down a wireless resale partnership with its former parent company, Sprint. Embarq has acted in recent months as though wireless is not a primary concern, and has not yet announced further wireless plans to kick in after the Sprint deal end in the months ahead. CenturyTel sold most of its wireless properties to Alltel about six years ago, though the company made a big spectrum investment earlier this year, buying up 700 Mhz licenses that its will use to enhance its voice and data footprint in its existing markets. In today's conference call discussing the Embarq deal, CenturyTel CEO Glen Post said the company might look for opportunities to trade spectrum and possibly build out coverage in more markets, though specifics remain unclear.

This is an intriguing deal, and more details--as well as more questions--are sure to emerge in the days ahead. Stay tuned to FierceTelecom for the latest.

-Dan

XO Communications

Dan O'Shea — Thu, 23 Oct 2008 09:30:48 -0400

Location: Herndon, Va.

Why it's so cutting-edge: XO is another company that has been very aggressive in the ultra-competitive Ethernet market. It recently took steps toward better management of its external network-to-network Ethernet interfaces, greatly expanded Ethernet availability earlier this year, and extended its reach for Ethernet over copper. Not to be outdone by wireless carriers, the company developed its Anywhere initiative with mobile workers in mind. XO was another Honorable Mention on last year's list.

But can it keep its edge? Some investors were unhappy earlier this year with XO Holdings chairman and busy billionaire Carl Icahn. XO had a decent second quarter, but it's one of the companies that will be watched closely for sign of possible declines in enterprise spending to come.

SPOTLIGHT: AT&T 3Q earnings preview

Doug Mohney — Mon, 20 Oct 2008 14:59:30 -0400

AT&T reports its third-quarter financial results Wednesday, and financial analysts are making their predictions on what might be revealed.

"Relatively steady" results are expected, despite the recent market battering. The iPhone is expected to yield mixed results, having attracted more AT&T wireless customers but also increased costs, due to phone pricing subsidies of 10 to 12 cents a share this year and next.

Broadband numbers and announcements will be studied carefully. In the second quarter, AT&T added just 46,000 broadband subscribers. Declining numbers have been attributed to a pull back in promotions and higher DSL prices.

Analysts expect AT&T to earn 71 cents per share on $31.3 billion in revenue and to have added around 2 million more new wireless subscribers thanks to the iPhone. Wireline subscribers are expected to continue to decline, with nearly 2 million lines gone in the third quarter.

With consumer wireline and wireless businesses in the same division and under the same boss, there may be announcements of new bundles and strategies to cross promote and keep customers.

For more:
- AP (via Forbes) on AT&T 3Q earnings, directions for Wednesday. Article.

M2Z drums for action on nationwide "Free" wireless broadband spectrum

Doug Mohney — Tue, 14 Oct 2008 10:43:02 -0400

M2Z Networks received a boost for its goal to put the "AWS-3" spectrum into play for a nationwide free broadband wireless network Friday. The good news came in a report from the FCC's Office of Engineering and Technology that said offering two-way broadband service in the spectrum would not cause harmful interference to wireless services of other carriers - specifically AT&T and T-Mobile. Both wireless carriers called for the FCC to conduct interference analysis before moving forward with auction plans.

"Nationwide lifeline broadband service" is a mouthful, but it is a phrase M2Z Networks wants everyone repeating as the FCC moves forward with AWS auction plans. The auction should include a requirement to provide free 768 kbps download wireless service to 50 percent of the U.S. population in five years and coverage for 95 percent of the U.S. population within 10 years.

However, there ain't no such thing as a free lunch. If M2Z were to win the auction, it would make money through selling geo-targeted advertising and by selling a premium unfiltered service at speeds of 3 mbps; the 768 kbps service would be "filtered" and "family friendly" to keep out porn.

Unlike previous crack-brained, ill-designed efforts to provide "free" internet access via Wi-Fi or other means, M2Z Networks has significant management and private sector backing. The company's management team includes @Home co-founder and Internet grey-beard Milo Medin as CTO and founder and John Mutela, former head of the FCC Wireless Telecommunications Bureau from 2003 to 2005, as CEO. At last report, M2N had about $500 million in venture capital backed up, with Kleiner Perkins leading the way.

For more:
- M2Z Networks postures for "free" wireless spectrum.
- CNET blog detailing FCC report on spectrum M2Z wants to use

"Wannabe" mobile worker flood predicted

Doug Mohney — Thu, 09 Oct 2008 23:07:28 -0400

A new class of mobile workers is emerging, says Forrester Research. Employees will insist upon mobile support from employers, and already nearly a third of smart phone users expense all or some of their monthly wireless bills.

Currently, the mobile "wannabes" represent 6 percent of the present work force, but Forrester estimates they will grow to 25 percent of workers within the next four years, with a whopping 73 percent of the work force considered some sort of mobile worker by 2012.

It's a wave being attributed to a bottom-up demand from all types of workers who want to user their personal mobile devices (iPhone) to access corporate apps. IT managers more narrowly define mobile workers as on-the-road execs or managers, telecommuters and/or field service employees; the groups roughly represents 20 percent of the work force.

Employees purchase their own devices, but end up expensing their corporate-related wireless voice and data access to the company. The wannabes include executive assistants, HR workers and finance department employees who are generally at their desks most of the time, but use smart phones to grab email and work with other corporate apps. The younger-than-30 Millennials also have come to expect mobile support, because they've ditched landline phones at home.

Happiness is forecasted for vendors, device makers, app developers and network operators - if they figure out they should be making mobile friendly products and services.

For more:
- eWeek talks about the new class of mobile workers. Article.

SPOTLIGHT: JD Power highlights landline losses to wireless

Doug Mohney — Thu, 02 Oct 2008 23:11:12 -0400

According to a new survey by J.D. Power and Associates, U.S. citizens continue to dump landline phones for cellular service, with improved user experience helping to fuel the move.

In its 2008 wireless customer satisfaction index, more than one fourth of wireless phone customers reported dumping their landlines to rely exclusively on wireless service. Also following trends, the younger the customer, the more likely they have ditched your landline for an exclusive cellular relationship; nearly 30 percent of the 18-24 set have made the switch, while only 9 percent of subscribers 65 and older have.

Longer cell phone usage also translates into a greater likelihood to abandon landline services. Nineteen percent of customers with three or more years of wireless service have dumped traditional phone service, while only 9 percent of those who have used cell service for 12 months or less have flushed their landline.

J.D. Power and Associates credits improving levels of wireless call quality and performance for driving the move to an all wireless world.

For more:
- eWeek reports on JD. Powers & Associates wireless report.

Sprint eyes nationwide femtocell availability

Dan O'Shea — Thu, 31 Jul 2008 09:57:33 -0400

Sprint Nextel has a reputation for launching innovative services before other wireless carriers, an approach that usually gives it an early market edge though sometimes only briefly. Now more than ever, as the company tries to do everything it can to recover from a troubled merger and poor market performance, we can expect Sprint to look for that market edge again by sticking to it innovation guns. The carrier said this week it will expand its Airave femtocell pilot program to make the home base stations available nationwide over its network, with sales of Samsung fentocells set to begin Aug. 17.

Sprint was one of many carriers worldwide conducting femtocells trials or limited pilot programs. It's broader launch will test the viability of femtocells at a time when wireline telcos continue to lose landline market traction. However, Sprint also will take an economic risk in charging for both the femtocell and the service, rather than subsidizing the femtocell.

For more:
- check out this coverage at Telephony

Related articles:
Femtocells have been heading toward a tipping point. Femtocell report
Femtocells might also be on Comcast's agenda. Femtocell report