FierceWireless

Comparing the top 10 U.S. carriers in Q3

Phil Goldstein — Fri, 06 Nov 2009 11:17:18 -0500

The third quarter earnings season is coming to a close, and the major U.S. wireless carriers have reported their earnings. AT&T Mobility and Verizon Wireless gained customers, while Sprint Nextel and T-Mobile USA lost subscribers. Subscriber growth at flat-rate carriers Leap Wireless and MetroPCS slowed in the quarter. Research firm Strategy Analytics compared the top 10 U.S. carriers, and looked at the major metrics--including churn, ARPU and revenue--of each carrier. How do they stack up? Special feature

FCC moves closer to special access fee regulation

Phil Goldstein — Fri, 06 Nov 2009 11:10:28 -0500

As expected, the FCC issued a public notice seeking comment on how to look at the special access market, formally opening a debate that likely will pit AT&T and Verizon against Sprint Nextel, T-Mobile USA and other companies. Those companies, which don't have wireline divisions, pay the big telcos fees to backhaul their wireless traffic over their competitors' wireline networks, and have been arguing that AT&T and Verizon hold a monopoly on the lines and are charging too much for access.

The FCC notice will seek comments on how the agency should look at the market data to determine, among other things, whether the commission's current pricing flexibility rules ensure "just and reasonable rates." The FCC said commenters will have 45 days to submit comments, and that there will be a 30-day period for reply comments.

"Some parties assert that the commission's current rules are working as intended and contend that there is extensive actual and potential competition in the market for special access," the FCC said in the notice. "Other parties assert that there is little or no competition for special access services."

The No Choke Points coalition, whose members include Sprint, T-Mobile, U.S. Cellular, Clearwire and small, independent LECs, has said that the interconnection fees are a big barrier to broadband access. The praised the FCC's move to open debate on the topic. "This public notice is an important next step towards releasing the captive special access market from AT&T and Verizon's long-standing choke hold," No Choke Points spokeswoman Maura Corbett said in a statement. "The data will show that AT&T, Verizon and other large incumbents are exploiting their control over high-capacity facilities to reap outrageous profits at the expense of the broadband economy."

Earlier this summer, Jim Cicconi, a senior vice president at AT&T, said in a letter sent to Congress that looking at all of the data for access lines and prices would show "an abundance of facilities and well-functioning market-based pricing."

For more:
- see this Reuters article

Waiting in line for the Droid? The launch in pictures

Mike Dano — Fri, 06 Nov 2009 10:58:12 -0500

With the Motorola Droid and the HTC Droid Eris finally commercially available, we're covering the launch from coast to, well, Mountain West (Washington, D.C., and Denver, to be specific).

Is the Verizon Wireless-supported, Motorola-built Droid drawing crowds of shoppers like the iPhone 3GS did? What about the Eris? Check out our live coverage.

Click here to get started on Droid launch coverage

And click here, here, here and here for coverage on the launch by other outlets.

Also: Want to see how this launch compares with Palm Pre and Apple iPhone 3GS launches earlier this year? Check out our Palm Pre launch coverage and our iPhone 3GS launch coverage.

<--Back to the story

Verizon launches Droid to few lines, but much excitement

Phil Goldstein — Fri, 06 Nov 2009 10:45:11 -0500

Verizon Wireless launches its first two Android phones this morning, and though the launch was not greeted with the same crowds and lines that accompanied previous iPhone launches, customers said they were excited about the devices, especially the Motorola Droid.

The carrier, which also launched the HTC Droid Eris, has made no secret in its marketing campaign that it intends for the Motorola Droid to compete with Apple's iPhone, which is offered exclusively through AT&T Mobility. Customers said that they thought the Droid was the first phone Verizon had launched that could truly compete with the iPhone, which has been a key growth driver for AT&T.

More than 100 people lined up at a Verizon store in Manhattan at midnight launch event, according to CNET, but lines were sparse at other locations this morning, including in Denver and Washington, D.C. Verizon customers in Washington said they were glad they had a phone that could compete with the iPhone.

Michael Maiorana, Verizon's regional president for Washington, D.C., Baltimore and Virginia, said the launch of the Android phones would help Verizon attract customers who want an iconic phone. "This Google phone, I think, will help catapult Verizon into a niche market that ... we haven't necessarily had a leading contender in," he told FierceWireless.

Without mentioning the iPhone by name, he said that there were existing Verizon customers who continually ask when the carrier is getting the iPhone, and say they do not want to switch from Verizon but want a different kind of smartphone. He also said there were subscribers on other networks that might want to switch to Verizon but are attached to their other devices.

"I think over the years the wireless device has become more of a primary reason why customers procure services," he said. "It's very iconic, the device. I think in many cases it's a status symbol."

Webster Brehm, 26, from Washington, D.C., said he has been a Verizon customer for eight years and was excited to get the Motorola Droid. "I think this is the first phone they've had that's attractive and has all of the capabilities that people are looking for that are like the iPhone, like with Google's apps," he said. "They don't have as many as Apple does right now, but I think that's going to change. As people come to Verizon and buy these phones, I think the popularity is going to increase, and they're going to be releasing a lot more."

Jeff Robins, 30, from Falls Church, Va., said he was buying the Motorola Droid and had read a lot about the phone on blogs and Internet forums.

"I think it has the opportunity compete. I don't know if it's like the iPhone killer that some people want it to be," he said. "But it's the only phone Verizon has that can really handle most of the capabilities, some of them not quite as well just yet from what I've read. But it has the opportunity to grow through the open development and the Android 2.0 platform, and that's the exciting thing."

For more:
- see these pictures
- see this CNET article
- see this Electronista article
- see this Dow Jones Newswires article (sub. req.)

AT&T's Donovan defends network, touts connected devices

Sue Marek — Fri, 06 Nov 2009 10:23:58 -0500

SAN FRANCISCO--At the Open Mobile Summit conference here AT&T CTO John Donovan once again defended his company's wireless network, arguing AT&T is spending more money this year than any other company to improve its coverage and capacity. However, he admitted that the task is enormous because customers' appetite for bandwidth is keeping pace with the carrier's investments in capacity.

Donovan said AT&T is constantly improving its network usage modeling and that no two cities have similar usage demands, so the carrier looks at every U.S. city individually to prepare for consumer data usage. He added that the company is in the midst of its 850 MHz overlay and then it will re-optimize the network.

During his keynote address, Donovan said that as the industry simplifies the wireless experience for the consumer, the more complexity is added to the infrastructure. "This is requiring us to rethink the network," Donovan said. He added that AT&T estimates it has 1 billion devices connected to its wireless and wireline network and that in 10 years it expects to connect the next billion devices. Much of that growth will come from emerging devices such as ereaders, navigation devices, netbooks and more. "Since 2005 we have certified more than 1,000 non-stock devices," Donovan said. "This year we certified 400 non-stock devices. We think that is six times our nearest competitor."

Donovan later joined several other industry executives, including Google's Chief Internet Evangelist Vint Cerf, in a panel discussion about the open mobile landscape. AT&T and Google are currently in the midst of a battle over the Google Voice application. AT&T has asked the FCC to investigate the application, arguing the service is improperly blocking calls to rural areas and should be regulated like a traditional telephone service. Google has countered that it blocks calls to fewer than 100 specific phone numbers due to what Google said were high-cost "traffic pumping schemes."

However, Donovan and Cerf nimbly avoided discussing Google Voice and instead talked with the other panelists about how to define open mobile. Cerf said he was uncomfortable with assigning any definition to it. Donovan, meanwhile, said that customers don't care about open, all they care about is their experience. He added that he believes there has to be some boundaries around openness because consumers want mobile to be open and convenient but they also want their privacy respected. "Customers want mobile to make their lives easier, but they expect you to take care of their security," he said.

AT&T completes acquisition of Centennial

Phil Goldstein — Fri, 06 Nov 2009 08:17:48 -0500

The FCC approved AT&T's $944 million acquisition of Centennial Communications, clearing the way for the deal to close and giving the nation's No. 2 wireless carrier around 893,000 new customers.

The commission voted 5-0 to approve the deal, but placed several conditions on it. The FCC, like the Justice Department, is requiring AT&T to divest some of Centennial's assets in parts of Louisiana and Mississippi. AT&T will gain subscribers in primarily rural areas of Indiana, Louisiana, Michigan, Ohio and Texas, and will enhance its coverage in Puerto Rico and the U.S. Virgin Islands.

The FCC is proposing that AT&T divest from seven markets, while the Justice Department is requiring eight market divestitures. Five of the eight service areas AT&T is required to divest are heading to Verizon Wireless. The carriers announced in May a divested asset swap--AT&T got assets Verizon was required to divest as part of Verizon's acquisition of Alltel.

Additionally, the FCC said AT&T would have to honor roaming agreements Centennial made with other wireless carriers, and continue to maintain Centennial's CDMA network in Puerto Rico and the U.S. Virgin Islands for 18 months, which is something Sprint Nextel was concerned about. AT&T also is required to limit its contact with America Movil, which is a competitor to AT&T and Centennial in Puerto Rico.

AT&T said that by late January, its products and services will be available at more than 100 Centennial retail locations. Former Centennial wireless customers can keep their existing rate plans, but they also will have the option to choose AT&T rate plans without activation or upgrade fees. In Puerto Rico, the Centennial brand will continue through mid-2010, and AT&T expects its products and services to be available in Centennial locations in Puerto Rico in the third quarter of 2010.

For more:
- see this AT&T release
- see this Bloomberg article
- see this Reuters article

Leap's subscriber growth slows in Q3

Phil Goldstein — Thu, 05 Nov 2009 16:51:47 -0500

Leap Wireless reported a wider net loss in the third quarter and weaker subscriber growth, but the company saw a boost in revenues. Like its rival MetroPCS, which reported earnings Thursday morning, Leap's subscriber additions slowed in the quarter when compared with its results from earlier quarters this year.

The news comes as Leap works to broaden its distribution channels; the carrier recently inked agreements with Best Buy, Target, Dollar General and Wal-Mart for its Cricket PAYGo monthly voice product.

Here's a breakdown of Leap's key quarterly metrics:

Financials: Leap's net loss swelled to $65.4 million, up from $47.3 million in the year-ago quarter. The company reported total revenues of $599.5 million, up nearly 21 percent from the $496.7 million it had in the year-ago period. Service revenues totalled $541.3 million, up 25 percent from $434.5 million in the third quarter last year. Leap said that the boost in service revenue reflected the success of its recent market launches and its broadband service.

Subscriber additions: The carrier had net customer additions of a little over 116,000, down 25 percent from the approximately 156,000 it had in the third quarter last year and down from its 203,000 additions in the second quarter. Leap ended the quarter with 4.65 million total customers, up 35 percent from the year-ago quarter.

Churn: Leap's churn rose to 5.4 percent in the quarter, up from 4.2 percent in the year-ago quarter and 4.4 percent in the second quarter. The company said that year-over-year increase reflected several factors, including newer customers in some of the company's new markets, competitive pressures and "the significant effect of rising unemployment in our key customer segments, which decreased available discretionary income and resulted in increased deactivations."

ARPU: Third quarter average revenue per user declined 8 percent, from $42.95 in the year-ago quarter to $39.60 in the third quarter this year. Leap said the successes of its new, lower-priced Cricket Wireless service plans and its Cricket Broadband pulled on the numbers. The carrier said it expects ARPU in the fourth quarter to continue to decline.

Walter Piecyk, an analyst at Pali Research, said Leap's results confirmed that the company was feeling the effects of intense competitive pressure. "The prepaid space has effectively been taken over by Sprint and TracFone, which added 666,000 and 712,000 customers, respectively, in the fourth quarter," he wrote in a research note. "Clearly customers flocked to lower-end rate plans and Leap potentially lost the higher value customers to Sprint's nationwide service," he said later in the note.

Leap's stock was down 45 cents to $12.58 per share in late-morning trading.

For more:
- see FierceWireless' Q3 earnings page
- see this release

Droid Eris headlines Verizon's holiday handset blitz

Phil Goldstein — Thu, 05 Nov 2009 11:50:26 -0500

Verizon Wireless launched a slew of new phones today including the HTC Droid Eris, the carrier's second phone based on Google's Android platform. Research In Motion's BlackBerry Curve 8530, a new LG Chocolate phone and a rugged push-to-talk handset from Samsung were also on tap.

However, the Droid Eris is clearly the marquee announcement. When Verizon announced the Motorola Droid, its first Android phone, rumors were already swirling that Verzion would launch the Droid Eris, a phone similar to the HTC Hero, as well. The Droid Eris runs on Android 1.5, and also features HTC's custom Sense user interface. It has a 3.2-inch capacitive touchscreen, a trackball, 5-megapixel camera, 3.5 mm headset jack and expandable memory with pre-installed 8 GB microSD card. Verizon will launch the Droid Eris Nov. 6, the same day as the Droid, for $99.99 with a two-year contract and after a $100 mail-in rebate.

An HTC spokeswoman told FierceWireless that it's possible that the Droid Eris will be upgraded to Android 2.0 in the future (the Moto Droid runs Android 2.0), but that the company had nothing official to announce right now.

Separately, Verizon launched the BlackBerry Curve 8530, which has a 528 MHz "next generation" processor, GPS, WiFi and a 2-megapixel camera. The Curve will launch Nov. 20 for $99.99 with a two-year contract and after a $100 mail-in rebate. The carrier also launched the LG Chocolate Touch, a music-oriented phone with an integrated FM radio, stereo Bluetooth, a dedicated music key and Dolby Mobile features. The phone retails for $79.99 with a two-year contract and after a $50 mail-in rebate. Finally, Verizon launched the rugged Samsung Convoy, which features a 2-megapixel camera and Bluetooth 2.1 technology. The phone will go on sale Nov. 15 for $49.99 with a two year-contract and after a $50 mail-in rebate.

In other Verizon news, the company confirmed that, beginning Nov.15, it is doubling its early termination fee to $350 for so-called "advanced devices." The company said that it is doing so because its high-end phones and netbooks are becoming more expensive.

For more:
- see these photos and specs
- see this Droid Eris release
- see this Curve release
- see this LG Chocolate Touch release
- see this Samsung Convoy release
- see this Washington Post article

Pictures and specs: Verizon's Droid Eris, Samsung Convoy, BlackBerry Curve 8530 and LG Chocolate Touch

Mike Dano — Thu, 05 Nov 2009 11:28:47 -0500

A day ahead of the release of Verizon Wireless' Droid phone from Motorola, the carrier announced a bevy of new gadgets just in time for the holiday shopping season, including its second Android phone, an LG touchscreen phone and a new BlackBerry. Check out pictures and specifications for each of Verizon's newest handsets.

Click here to get started

<--Back to the story

MetroPCS posts larger profit, weaker subscriber growth

Phil Goldstein — Thu, 05 Nov 2009 10:57:53 -0500

MetroPCS reported weaker subscriber growth in the third quarter amid intensifying competition in the flat-rate prepaid market, and though it also posted higher profit, the company cut its outlook for 2009. The carrier had net income of $73.55 million, up 64 percent from $44.88 million in the year-ago quarter, mainly on cost cuts. The company's quarterly profit and revenue topped market expectations, but subscriber additions were weaker than expected. Of late, MetroPCS has come under even more competition from the likes of Sprint Nextel's Boost Mobile unit, Leap Wireless and TracFone Wireless, which recently launched its flat-rate Straight Talk plans at Wal-Mart stores nationwide.

"In a seasonally slow quarter, we reported net additions that were below our expectations, due primarily to elevated churn and a deceleration in gross additions," MetroPCS CEO Roger Linquist said in a statement. "We believe this was the result of continued U.S. macro-economic weakness, an increasingly competitive environment, and upward adjustments we made to the price of certain handsets."

Here's a breakdown of MetroPCS' key quarterly metrics:

Revenue: Total revenues were $896 million, up 30 percent from $687 million in the year-ago quarter. Service revenues jumped 33 percent to $812 million, up from $611 million in the third quarter last year.

Subscribers: The company had net subscriber additions of around 66,000 in the quarter, down significantly from the 249,000 it had in the year-ago quarter and the 206,000 it had in the second quarter. The company ended the quarter with 6.32 million total subscribers.

Churn: Churn rose to 5.8 percent, up from 4.8 percent in the third quarter last year and flat from the second quarter.

ARPU: ARPU was $41.08 in the quarter, up from $40.73 in the year-ago quarter $40.52 in the second quarter. The company said the increase was primarily due to a favorable rate plan sales mix and its unlimited international calling plan, which it launched in June.

The company's performance on subscriber additions drew disappointment from analysts. "It's hard to argue that competition increased significantly to Q3 from Q2 to justify these weak results as today T-Mobile USA reported a decline in its postpaid customer base and a dramatic slowdown in its prepaid subscriber growth, and we estimate that Straight Talk added only 50,000 customers across all its markets in Q3," Pali Research analyst Walter Piecyk wrote in a research note. "Sprint and its prepaid offering by Boost Unlimited seemed to be the only low-end wireless provider that reported any traction. We expect Straight Talk and other new competitors to have a larger impact on results in Q4."

MetroPCS' stock was down more than 7 percent on the news to around $6.12 per share.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this Dow Jones Newswires article (sub. req.)

With cloud mania in full swing, what is mobile's role?

Stephen Drake — Thu, 05 Nov 2009 10:53:47 -0500

The emergence of cloud-based infrastructure offerings, and the myriad "as a service" intersection points emerging for delivering service-enabled software to business users, provides numerous strategic and tactical benefits for user firms, including IT de-capitalization, easy access to applications, business agility, and scalability. But with SaaS (software as a service)--the most mature and prominent of these IT cloud services are finding that because the compute resources, application logic, and data all live in the cloud, along with other structured data sources (e.g., GPS data), they can serve their customers' need to get mobile access to this data; extend the mobile platform as a driver for enhanced partner growth, new revenue streams, and more service time; and drive an overall better experience for customers. IDC believes that the mobile device clients, cloud-based mobility platforms, and services now emerging from SaaS applications vendors provides a template for what customers will, in a growing number of cases, choose when it comes to building, consuming, and paying for mobility applications.

Recent IDC demand-side research conducted in the U.S. and the U.K. suggests that mobile SaaS based offerings are key future deliverables for organizations seeking to role out solutions to its mobile worker base. Almost 40 percent of organizations plan to deploy a SaaS-based solution in the next 12-18 months. This is in addition to another 19.7 percent that have already done a pilot and plan to roll out a larger deployment in the next 12-18 months. This is in stark contrast to current deployments for mobile SaaS in the enterprise, as today only 9.1 percent of organizations have already embarked on a large-scale deployment of mobile SaaS-based solutions. Of course, this does not mean that all on-premise solutions will be displaced, as many organizations will likely run on-premise solutions for certain applications and on-demand, hosted solutions for others. Furthermore, 15.5 percent of organizations have no plans to roll out any aspect of mobile SaaS-based solutions in the next 12-18 months, with another 8.4 percent that did run a pilot but have no plans to roll out the solution to other employees.

At the same time, many organizations see mobile operators as trusted providers for providing mobile solutions. The largest percentage of respondents from the same survey said that 38 percent selected the mobile operator as their prime supplier for mobile solutions. Although, this is somewhat unexpected as mobile operators have not had the greatest track record for selling mobile software designed to meet the unique requirements of enterprises environments mobile operators are uniquely positioned to offer up mobile SaaS-based solutions.

Beyond operators there are also a number of services-enabled application companies and those that provide key platform offerings that deliver mobile-SaaS based solutions providing customers not only access to data but to a growing number of new services that may be based on location, availability and other requirements based on a workers' situation. A multitenant, SaaS-delivered mobile platform, for example is designed for access to and consumption of software and application functionality built specifically for network delivery, and which is hosted, provisioned, and accessed by users over the Internet, and as such provides significant architectural advantages over premises-installed packaged software applications.

So when does the mobile SaaS model make sense for business customers? When the vendor business model is already a SaaS-based model the mobile client would naturally be SaaS based. Key advantages of SaaS-based models are the ability to quickly scale up or scale down users and the ability to rely on the vendor for management and timely updates and address multiple mobile OS environments.

The downsides of the SaaS-based model are the potential for a significantly higher total cost of ownership, security and compliance concerns related to having sensitive corporate data stored with a third-party provider, and limitations pertaining to customization and integration with back-end solutions. SaaS-based vendors do address security with federated data, encryption, antimalware and monitoring tools. Regardless, there are certain types of applications and data that enterprises prefer to have on premise, behind the corporate firewall. Such downsides do not make an overarching black-and-white case in favor of one model or the other, but rather validate the case for the existence of both SaaS-based mobile applications in some instances and on premise in others.

There is a tendency to equate mobile SaaS-based offerings with browser-based clients, or with thin mobile clients that do not store data locally and cannot be referenced or updated by the user when wireless service is not available. No direct correlation exists. Antenna's AMP platform, Concur Mobile, and salesforce.com Mobile are all examples of SaaS-based mobile platforms that have native clients that store data locally and allow the user to interact with that data in isolation. In other cases, a hybrid client is the best approach, as is the case with the Cisco WebEx Meeting Center client and LogMeIn Rescue+Mobile.

The promise of cloud computing to deliver additional value to its customers and offer cost savings and viable application development environments also holds true for the mobile environment. As customers evaluate mobile cloud offerings, it's important to consider mobile workers' roles and needs within the organization, mobile platform capabilities and key security requirements to weigh the decision of on-premise vs. SaaS-based solutions.

For further information on mobile cloud computing please see IDC's study "Enterprise Mobility in the Cloud" (IDC # 220192, Oct 2009). Stephen Drake is the program vice president for Mobility & Telecom research at IDC. In this position, he has responsibility for the Mobile Enterprise, Mobile SMB, Mobile Device coverage, IP Communication Services and also contributes to IDC's Unified Communication research. Visit IDC.com.

Amazon stops selling Sprint-powered Kindles

Sue Marek — Thu, 05 Nov 2009 10:42:36 -0500

SAN FRANCISCO--At the Open Mobile Summit here yesterday Amazon Kindle Director Russell Baker confirmed that the company is no longer selling the Sprint Nextel-powered Kindle. Though Amazon will support those Sprint-powered devices already in service, the company plans to focus its efforts on its GSM-based Kindle ereader that uses the AT&T network and is able to roam internationally. However, Amazon is still selling the Kindle DX that uses Sprint's network.

Russell said that Amazon decided it was too confusing to consumers to sell one version of the Kindle that can be used internationally and one version that can't (Sprint's network uses CDMA technology, while AT&T's uses the much more widespread GSM technology). He added that the company values Sprint as a partner and hopes to work with the carrier again on other, future devices.

When asked whether Amazon would consider having Kindle devices use the Qualcomm Gobi chipset that allows users to switch seamlessly between 3G networks around the world, including GSM, EDGE, HSPA, HSDPA and EV-DO, Baker said that Amazon had considered the Gobi chipset. However, he said that when the Kindle was in its development stage, the Gobi chip was primarily being made for netbooks and laptops. He added that Amazon may use Gobi in the future.

Amazon's decision to drop the CDMA Kindle is a blow to Sprint, which in the first quarter of the year touted its sales of the Amazon Kindle ereader device as driving the majority of its 394,000 wholesale additions.

Article updated Nov. 5 to correct information about the Kindle DX.

T-Mobile loses 77,000 subs in Q3

Phil Goldstein — Thu, 05 Nov 2009 09:34:59 -0500

T-Mobile USA reported a net loss of 77,000 subscribers in the third quarter, relatively weak financials and subscriber metrics showing increasing churn and declining ARPU--all indications that the nation's No. 4 carrier is losing share to market heavyweights Verizon Wireless and AT&T Mobility, which both posted notable subscriber gains during the period, as well as Tier 2 flat-rate carriers.

Perhaps in an effort to stem the receding tide, T-Mobile in October unveiled new unlimited service plans aimed at boosting its value proposition. The carrier also touted the growth of its 3G network, which it said now reaches 167 million people. Nonetheless, it's clear the carrier is facing a range of challenges. Here's a breakdown of some of T-Mobile's key quarterly metrics:

Financials: The carrier reported net income of $417 million, down from $425 million in the second quarter and $442 million in the year-ago quarter. However, T-Mobile's parent company, Deutsche Telekom, posted a rise in net income to $1.42 billion, up from $1.33 billion in the third quarter last year. T-Mobile's total revenues in the quarter clocked in at $5.38 billion, up from $5.34 billion in the second quarter but down from $5.51 billion in the year-ago quarter. The carrier said that the higher revenues were driven by higher equipment sales, partially from an expanded data device lineup. However, service revenues were $4.73 billion, down from $4.77 billion in the second quarter and $4.491 billion in the third quarter last year.

Subscribers: The carrier's net subscriber loss of 77,000 sharply contrasts with the 670,000 net subscriber additions it had in the third quarter last year--and the 325,000 net adds it had in the second quarter. T-Mobile lost 140,000 contract customers in the quarter, and even its prepaid net adds were only 63,000 in the third quarter, down from 268,000 in the second quarter and 377,000 in the third quarter of 2008. The company blamed fewer gross adds and higher churn from Flex Pay customers for the overall loss in subscribers. T-Mobile ended the quarter with 33.4 million customers.

Churn: Contract churn was 2.4 percent, up from 2.2 percent in the second quarter and flat compared with the third quarter last year.

ARPU: Blended ARPU was $47 in the third quarter, down from around $48 in the second quarter of 2009 and $52 in the year-ago quarter.

Data: T-Mobile's data services revenue reached $1 billion in the third quarter, representing 21.1 percent of blended ARPU, or $10.00 per customer--an increase from 20.8 percent/$9.90 per customer in the previous quarter and up from 17.3 percent/$8.90 per customer a year ago, translating to 18 percent year-over-year data services revenue growth.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this Bloomberg article
- see this WSJ article (sub. req.)

After a quarter of declines, Qualcomm promises growth

Mike Dano — Wed, 04 Nov 2009 17:52:40 -0500

Qualcomm posted slowing profits and revenues in its fiscal fourth quarter, and its outlook fell short of some analysts expectations. However, the company's stock rose slightly following the report, possibly reflecting investor relief over the chipmaker's expectations of growth in the coming year and the announcement of a new licensing deal with Samsung.

The chipmaker reported revenues in the quarter of $2.69 billion, down 19 percent year-over-year and 2 percent sequentially. The company's net income clocked in at $803 million, down 9 percent year-over-year and up 9 percent sequentially.

Interestingly, Qualcomm's figures were buffeted but a number of high-profile expenses and transactions:

The company recorded a $230 million charge in the quarter related to an "estimated fine expected to be levied by the Korea Fair Trade Commission."
The company's 2009 results included a $783 million charge due to Qualcomm's settlement with rival Broadcom.
The company's expenses were offset by $560 million in revenues in the quarter from Nokia, which Qualcomm inked a settlement with earlier this year.

But perhaps the most notable element in Qualcomm's earnings announcement was the disclosure of a new agreement with Samsung: "I am also pleased to announce that we recently extended our license agreement with Samsung, covering both 3G and 4G," said CEO Paul Jacobs.

In a conference call with analysts Qualcomm executives provided details on the Samsung transaction. Qualcomm's Derek Aberle said the deal includes a 15-year license and payments from Samsung totaling $1.3 billion. The agreement covers CDMA2000, WCDMA, TD-SCDMA and OFDMA-based standards including LTEs and WiMAX, he said.

While Qualcomm's financial metrics for the quarter showed mostly declines on a sequential and year-over-year basis, the company's outlook for the fiscal first quarter of 2010--and the fiscal year 2010--showed expectations of growth. Qualcomm said it expects to grow revenues in the coming quarter by between 1 and 9 percent. The company expects similar growth figures for the fiscal year 2010.

According to Reuters, those forecasts fell below Wall Street expectations. Nonetheless, Qualcomm's stock enjoyed a bounce following the earnings news--notable in that the company's share price has declined from around $47 to around $41 during the past few months. Qualcomm's stock was up slightly in after-hours trading following its earnings announcement, to around $42.01 per share.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this conference call transcript
- see this MarketWatch article
- see this Reuters article

T-Mobile CTO: 40% of Q4 sales will be smartphones

Sue Marek — Wed, 04 Nov 2009 13:31:10 -0500

SAN FRANCISCO--During a keynote address at the Open Mobile Summit 2009 conference here, T-Mobile USA CTO Cole Brodman touted his company's "belief in the power of open," and argued the carrier had supported the concept long before some of its competitors. Specifically, Brodman noted T-Mobile was the first carrier to launch an Android handset in the U.S. with its debut of the G1 device a year ago. And that push will continue: He said the company will have four Android handsets available this holiday season, with that number doubling to eight in the first six months of 2010.

Brodman also said that T-Mobile believes that 2009 is the "year of the smartphone," and expects that 40 percent of its sales in the fourth quarter will be smartphones, the majority of which will be devices with Android and BlackBerry operating systems.

Android clearly plays a big role in T-Mobile's future. Brodman said Android users consume 50 times the data of others, which is both a challenge (from a network capacity standpoint) and a huge benefit. "It's great to make products that people want to consume," he said.

Brodman provided some other interesting Android tidbits:

Half the customers using Android devices visit the Android Marketplace once a day
80 percent of Android users browse at least once a day, with two-thirds browsing numerous times per day
Nearly half of the carrier's HTC myTouch 3G users customize their phone with applications
More than 40 percent of Android users access social networking sites multiple times per day

T-Mobile plans to continue to work closely with Google on the Android Marketplace. Brodman said that on Nov. 17 T-Mobile will debut a channel in the Marketplace that will feature and recommend certain apps to T-Mobile customers. Brodman also said that T-Mobile customers will be able to download a paid app from this T-Mobile channel and it will be posted to their T-Mobile bill.

"We think the carrier billing platform is a great way to collect payment for paid apps on behalf of our partners," Brodman said.

Video: Verizon's new Droid commercial

Mike Dano — Wed, 04 Nov 2009 12:08:16 -0500

Source: Boy Genius Report

Looking back at the top mobile apps of 2006

Phil Goldstein — Wed, 04 Nov 2009 11:50:01 -0500

For the past four years, FierceMobileContent has been honoring top mobile applications that we think are standouts among their peers. We recently decided to take a look back at some of those award winners from the past and see how they are faring today. In this first part of a series, we checked out the companies and applications that won the award in 2006. Much has changed, but some of the applications have stood the test of time. Check out how the winners fared. Special feature

Rumor Mill: Verizon to double ETF to $350 on 'advanced devices'

Phil Goldstein — Wed, 04 Nov 2009 11:42:53 -0500

Verizon Wireless is going to double its early termination fee (ETF) later this month from $175 to $350 for users who purchase an "advanced device," according to the Boy Genius Report blog.

According to the blog, which posted a leaked slide of the policy change, Verizon will institute the new policy Nov. 15. The ETF will go down by $10 per month for each month of service. It is unclear what exactly an "advanced device" is, but it likely refers to smartphones.

If true, the move represents a reasoned measure aimed at protecting the subsidy Verizon Wireless doles out for each of its high-cost smartphones, and likely would deter customers from opening a new line of service, paying for a subsidized device, canceling the line and then selling the device for a profit. Verizon is in the midst of launching several high-profile gadgets, including Research In Motion's BlackBerry Storm2 and Motorola's Droid. Such devices typically sell to consumers for around $200, a price that includes in some cases a subsidy from Verizon of as much as $300.

Verizon spokesman Tom Pica declined to comment.

For more:
- see this Boy Genius Report post
- see this InformationWeek article

LG forecasts 20% growth in handset sales

Phil Goldstein — Wed, 04 Nov 2009 11:25:02 -0500

LG Electronics is predicting a 20 percent rise in its handset sales in both 2009 and for 2010, a bullish estimate that contrasts with relatively tepid expectations for overall growth in the handset market.

Skott Ahn, the head of LG's handset division, made the forecasts in an interview with the Wall Street Journal. He also said the company would look to boost its presence in emerging markets in China, India and other parts of Asia.

Whereas LG sounded a confident tone, research group Strategy Analytics recently predicted a 3 percent rise in the overall handset market in the fourth quarter. The market is expected to gradually recover next year, according to the firm, following an average decline of 11 percent during the past three quarters.

LG appears to be at least partially basing its forecasts on strong smartphone performance. The South Korean company is planning a big push with Windows Mobile smartphones, and Ahn's comments come in the wake of remarks earlier this week from LG CEO Yong Nam, who said he no longer sees the likes of Nokia and Sony Ericsson as its main competitors, and instead views Apple, Palm and Research In Motion as the main competition.

LG said handset sales totalled $3.53 billion in the third quarter, up nearly 25 percent from the year-ago quarter. The company said it shipped 31.6 million handsets in the quarter, up 37 percent from the year-ago quarter, and up 6 percent from the 29.82 million it shipped in the second quarter.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article
- see this WSJ article (sub. req.)

UPDATED: T-Mobile service outage affects 1.7M customers

Mike Dano — Wed, 04 Nov 2009 11:24:11 -0500

T-Mobile USA said "service disruptions" last night rendered inoperable voice and data access for roughly 1.7 million of the carrier's customers in locations across the country.

In a series of posts to its support website, T-Mobile detailed its reactions to the dramatic outage that, according to user complaints collected by CNET and other outlets, apparently stretched from coast to coast. "T-Mobile customers may be experiencing service disruptions impacting voice and data," the company said in a statement yesterday afternoon. "Our rapid response teams have been mobilized to restore service as quickly as possible. We will provide updates as more information is available."

As the evening wore on, T-Mobile issued a series of updates on the situation: "We're making good progress restoring voice and messaging service to affected customers," a T-Mobile representative told CNET at around 9:30 p.m. EST last night.

Finally, at around 1:30 a.m. EST this morning, T-Mobile said it had restored service to affected customers. "About five percent of our customers across various geographies were affected for much of Tuesday evening, and by late Tuesday PST their service was restored," the carrier said.

Later, the carrier provided a brief explanation: "After investigating the cause, we have determined that a backend system software error had generated abnormal congestion on the network. T-Mobile has since implemented additional measures to help prevent this from happening in the future. We again apologize to those customers who were affected and may have been inconvenienced."

T-Mobile is not the first company to suffer service problems. For example, users of Research In Motion's BlackBerry devices have been hit with several outages over the year, AT&T reported brief EDGE disruptions in 2007 and Verizon's wireline business was fined $250,000 by the Ohio Public Utilities Commission for what the PUC described as slow repairs following service disruptions caused by severe weather in at least two Ohio communities last year.

However, yesterday's incident represents yet another black eye for T-Mobile, the nation's fourth largest wireless carrier with around 33.5 million customers; the operator is still reeling from the public relations fallout from prolonged troubles with its Sidekick data service. Last month, T-Mobile reported that glitches with its Microsoft-powered Sidekick data service erased information from a select group of users' devices, though Microsoft said it likely will be able to recover most of the data.

For more:
- see this T-Mobile support page
- see this CNET article
- see this Bloomberg article

Article updated Nov. 5 to include T-Mobile's statement on the reason behind the outage.

Verizon, AT&T, others rally on IMS approach to voice over LTE

Phil Goldstein — Wed, 04 Nov 2009 11:10:45 -0500

Verizon Wireless, AT&T and several major international carriers and vendors threw their support behind an IMS-based approach to delivering voice and SMS services over LTE networks. The level of operator support--the approach also is supported by Orange, Telefonica, TeliaSonera and Vodafone--sits in sharp contrast to another approach, called Voice over LTE via Generic Access, or VoLGA, which is supported by T-Mobile International.

Vendors including Alcatel-Lucent, Ericsson, Nokia Siemens Networks, Nokia, Samsung Electronics and Sony Ericsson also voiced their support for the initiative, dubbed One Voice. The companies said they concluded that an IMS-based approach "is the most applicable approach to meeting the consumers' expectations for service quality, reliability and availability when moving from existing circuit-switched telephony services to IP-based LTE services. This approach will also open the path to service convergence, as IMS is able to simultaneously serve broadband wireline and LTE wireless networks."

The companies said that the purpose of the initiative is to create the largest LTE ecosystem possible, and to avoid fragmentation of technical solutions.

Interestingly, both Alcatel-Lucent and Ericsson also support the VoLGA approach, and Nokia Siemens has supported its own solution, called Fast Track Voice, which proposes having mobile switching center servers handle VoIP traffic over LTE networks. VoLGA proponents argue that their approach should be used as an interim solution. All three vendors said they do not see a conflict in supporting the different approaches.

"We have been supporting the IMS approach from the beginning," Nokia Siemens spokesman Kent Tankersley told FierceWireless. "We look at an all-IP-based architecture as the ultimate goal for LTE. The Fast Track is a way the intermediate step, a bridge to that IMS."

Ed Elkin, director of IMS marketing at Alcatel-Lucent, said the company supports One Voice, VoLGA and circuit-switch fallback approaches for delivering voice over LTE. However, he said that One Voice is attractive for several reasons. "Once Voice, by giving the handset the handset manufacturers a common target to aim at, increases the likelihood that they can create a variety of handsets for the subscriber to choose from," he said.

He said that VoLGA will continue, but noted the broad support for One Voice likely would increase the possibility of global roaming. "Other methods have a narrow operator base," he said.

Peter Linder, director for network solutions at Ericsson, said that the One Voice approach was a "lightweight collaboration model" aimed at accelerating market adoption of LTE.

"We felt that the industry was a little bit unclear about the timing for when voice over LTE would happen for 3GPP standards," he said. "If we could take that uncertainty out of the marketplace and create clarity," he said, that could help drive momentum in the LTE ecosystem.

For more:
- see this release

AT&T suing Verizon over 'There's a map for that' ads

Phil Goldstein — Tue, 03 Nov 2009 15:58:57 -0500

Let the ad wars continue.

AT&T sued Verizon Wireless, claiming Verizon's latest campaign targeting AT&T's 3G coverage is misleading. AT&T is seeking a cease and desist order through a federal court in Georgia, and said the ads are causing it to lose "incalculable market share."

Last month, Verizon began widely pushing an ad campaign, "There's a map for that," that was a swipe at Apple's "There's an app for that" spots touting the iPhone, which AT&T Mobility exclusively offers. AT&T claims the ads don't accurately represent AT&T's coverage. The ads show maps of the two companies' 3G wireless coverage, and AT&T claims that the blank spots on the map for AT&T in the ads mislead viewers into thinking that AT&T has no service in those areas.

"By communicating that AT&T customers have no coverage in large parts of the country, Verizon is misleading the public about an essential component of the services AT&T offers," the lawsuit said. AT&T argues in the lawsuit that customers can "fully use their wireless devices outside of a '3G' coverage area and undisputedly have coverage in areas depicted by white or blank spaces on the maps used in Verizon's advertisements."

A Verizon spokesman did not immediately respond to a request for comment.

The "map" ads from Verizon are just a part of the No. 1 carrier's ad blitz. The company in recent weeks launched a related campaign for its Android-based Droid phone from Motorola that stabs directly at the capabilities of Apple's iPhone.

Interestingly, this is not the first time that the nation's top two carriers have tussled over advertisements. In July, Verizon asked a U.S. judge to determine whether its "America's Most Reliable 3G Network" ads are truthful, a claim AT&T said was misleading.

For more:
- see this WSJ article (sub. req.)
- see this Reuters article

What were Americans' top 10 favorite phones in August?

Phil Goldstein — Tue, 03 Nov 2009 11:36:07 -0500

Smartphones are seen as a major growth engine for wireless. According to recent research from comScore, they are also becoming some of the most-favored phones of U.S. consumers. The following is a countdown of the top 10 most satisfying cell phones in the United States in August. The information comes from an August survey of 15,000 U.S. mobile subscribers over the age of 13, and includes devices that have installed user bases of more than 100,000. ComScore asked respondents to rank their satisfaction with their device on a scale of 1 to 10, with 10 being the highest. Slideshow

Target outsourcing mobile retailing biz to RadioShack

Phil Goldstein — Tue, 03 Nov 2009 11:05:55 -0500

RadioShack is taking over Target's mobile retailing business, according to reports, in another sign that the company is looking to grow its position as a cell phone retailer.

RadioShack, through its subsidiary Kiosk Operations, took over the mobile retailing operations at 100 Target stores in Minnesota, California, Georgia, Illinois, New Jersey, Texas and Washington last month, according to the Minneapolis-St. Paul Business Journal. Additionally, the report said that Target plans to expand the outsourcing effort to all of its roughly 1,700 stores next year.

In recent months, RadioShack has moved aggressively to expand its presence in the mobile retail space, likely in an effort to counter increasing pressure from competitors Best Buy and Wal-Mart. During the summer, RadioShack inked a deal with T-Mobile USA to offer the carrier's wares in its company-owned stores, and in late September RadioShack added Verizon Wireless products to around 450 Sam's Club kiosks it operates. RadioShack sells service from AT&T Mobility, Sprint Nextel and Virgin Mobile USA.

Representatives from RadioShack and Target did not immediately respond to requests for comment.

For more:
- see this Minneapolis-St. Paul Business Journal article
- see this Dow Jones Newswires article

Report: FCC staff recommend approval of AT&T-Centennial deal

Phil Goldstein — Tue, 03 Nov 2009 10:32:21 -0500

FCC staffers have recommended that the commission approve AT&T's $944 million acquisition of Centennial Communications, according to a Bloomberg report. The companies have been urging the FCC to approve the deal, which received regulatory approval from the U.S. Department of Justice last month.

AT&T's purchase of Centennial will give the nation's No. 2 carrier around 1.1 million of Centennial's customers in Puerto Rico, the U.S. Virgin Islands, the Great Lakes region and in the Gulf Coast.

The Bloomberg report, citing unnamed sources familiar with the matter, said the agency's staff sent the recommendation to the FCC's five commissioners Oct. 30. Conditions to be imposed on AT&T are likely going to be similar to the ones AT&T itself laid out in an Oct. 22 letter to the FCC, according to the report.

In the letter, AT&T said it would honor Centennial's existing roaming agreements with other carriers. The company also said it would operate and maintain a CDMA network in Puerto Rico and the U.S. Virgin Islands for 18 months after the deal closes, which was a concern that Sprint Nextel had brought up with the FCC regarding the deal. Further, AT&T promised to limit its contact with America Movil (which operates in Centennial areas and owns reseller TracFone) if it received approval to purchase Centennial--presumably to avoid conflicts of interest.

FCC spokeswoman Jen Howard declined to comment on the report and on when the commissioners might consider the deal. The commissioners can approve, reject or change the staff's recommendation.

For more:
- see this Bloomberg article
- see this FCC filing

Americans' top 10 favorite cell phones in August

Mike Dano — Tue, 03 Nov 2009 10:25:02 -0500

The following is a countdown of the top 10 most satisfying cell phones in the United States in August, according to research firm comScore.

This information derives from an August survey of 15,000 U.S. mobile subscribers over the age of 13, and includes devices that have installed user bases of more than 100,000. ComScore asked respondents to rank their satisfaction with their device on a scale of 1 to 10, with 10 being the highest.

This countdown, starting at No. 10, ranks the top U.S. handsets in August by satisfaction.

Click here to get started

And click here to see April's list.

Pictures and specs: Sony Ericsson's Xperia X10 Android phone

Mike Dano — Tue, 03 Nov 2009 09:27:26 -0500

Sony Ericsson unvield its new Xperia X10 Android phone, which the company said "introduces a new UX platform that will evolve across the product portfolio and expand over time continuously introducing new features and capabilities." Check out pictures and specifications for this new gadget.

Click here to get started

<--Back to the story

NSN may cut nearly 6,000 jobs

Phil Goldstein — Tue, 03 Nov 2009 09:08:22 -0500

Nokia Siemens Networks, reeling from weaker sales and declining market share, said it may cut as many as 5,760 jobs as part of a broad restructuring and cost-cutting program. The program includes reducing the number of its business units from five to three and lowering its procurement costs.

The company said it aims to reduce expenses by $733 million annually by the end of 2011 compared with the end of 2009. Additionally, the cuts in procurement costs will be "substantially larger" than other cuts, and are being made to "meet ongoing customer requirements for competitive pricing." That could bring the total cost cuts to nearly $1.46 billion. Nokia Siemens said it may cut 7 percent to 9 percent of its 64,000 employees, and that some countries may see job losses higher or lower than that range.

Just as Nokia reshuffled its front office and reorganized its handset business in the wake of its $834 million net loss in the third quarter, it now appears that Nokia Siemens--Nokia's joint venture with Germany's Siemens--is restructuring after a period of weak performance. In the third quarter, NSN's sales slumped 21 percent to $4.16 billion. The company had an operating loss of $1.64 billion in the quarter, compared with an operating loss of $1.48 million in the year-ago quarter. The company's market share also is expected to decline more in 2009 than Nokia and Nokia Siemens had previously anticipated.

In addition to the cost cuts, Nokia Siemens said it would streamline its business structure, actions scheduled to go into effect Jan. 1. The company plans to reorganize into three business units: business solutions, network systems and global services. Jürgen Walter, currently head of the company's converged core unit, will run business solutions; Marc Rouanne, currently head of the vendor's radio access unit, will run the network systems business; and Ashish Chowdhary, currently the company's services chief, will run the global services business.

NSN also said it is open to making acquisitions when "assets are available and the associated purchase price of those assets provides the appropriate value."

For more:
- see this release

Sony Ericsson debuts Xperia X10, first Android phone

Phil Goldstein — Tue, 03 Nov 2009 08:28:40 -0500

Sony Ericsson unveiled its first Android phone, and said the device will be the flagship for a family of phones that the struggling handset maker will release in the first half of next year. The device, called the Xperia X10, features a new user interface called UX, which was previously known by the codename "Rachael." The user interface appears to build on many of the advances HTC and Motorola have made with their own custom Android user interfaces.

With the release of the X10, Sony Ericsson becomes the third handset maker of the world's top five OEMs to release a phone based on Google's Android operating system. The phone runs Android 1.6.

Sony Ericsson's UX user interface features two signature applications: Timescape and Mediascape. Timescape allows users to browse all of their communications with a contact--via photos, emails, texts, Facebook and Twitter--in one view. Mediscape allows users to manage all kinds of content, from their phones, YouTube or Sony Ericsson's PlayNow media portal. Additionally, both of these features can automatically recognize connections among contacts, content and media, Sony Ericsson said. The phone also has an "infinite button," which the company said allows users to see all of their connections with a contact. Further, face recognition software can recognize up to five faces in a picture, and then automatically connects them with the user's social phonebook and all other related communications.

The device runs on a 1GHz Qualcomm Snapdragon processor, has an 8.1-megapixel camera, a 4-inch WVGA touchscreen, WiFi, GPS, 3.5 mm headset jack and comes with an 8 GB microSD card. Sony Ericsson said the Xperia X10 would be available in select markets in the first quarter, but did not specify which markets. The company also did not reveal pricing information.

For more:
- see this release
- see these pictures and specs

Tarver Games attacks App Store with 'Ghosts Attack'

Phil Goldstein — Mon, 02 Nov 2009 12:05:30 -0500

Apple's App Store is teeming with games, so what sets Tarver Games apart from the slew of firms launching games for the application storefront? Its pedigree. FierceDeveloper's latest Developer Workshop profiles Tarver Games, whose president, Chris Cross, is a 16-year videogame industry veteran who previously served as game design director for Electronic Arts' landmark "Medal of Honor." Tarver Games recently introduced its flagship iPhone title, "Ghosts Attack," which updates the first-person shooter genre via the integration of Google Maps technology. FierceDeveloper researches the mobile gaming experience, management philosophies and the value of original intellectual property. Special feature

UPDATED: Nokia, AT&T working toward Ovi Store launch

Phil Goldstein — Mon, 02 Nov 2009 11:57:49 -0500

Nokia and AT&T Mobility have developed a close relationship this year, with the carrier launching several high-profile Nokia devices. Yet one area of the relationship remains uncertain: when AT&T will launch support for Nokia's Ovi Store. Niklas Savander, Nokia's executive vice president of services, suggested that the companies were still finessing the details of the deal.

In an interview with CNET, Savander discussed Nokia's Ovi situation at AT&T, the nation's second largest carrier. He said that each relationship Nokia has with its various carrier partners is unique, and that the revenue cut that carriers get via Ovi varies depending upon the situation. Savander was asked if Nokia had been able to come to an agreement with AT&T on the revenue distribution of the deal.

"You might be able to look at this and say that perhaps the business conditions have not been attractive enough to AT&T," he said. "It's hard to dispute that. You can't say it's because the device is not good enough or the service is not good enough."

An AT&T spokeswoman did not immediately respond to a request for comment. AT&T said in May that it would launch Nokia's Ovi Store later this year, but has not given any specific timetable. The companies are currently working toward the launch of the Ovi Store.

In the interview, Savander said that when AT&T launches Ovi, it will be a co-branded service. "The brands are not in any way conflicting, but they're complimentary," he said. "They will be visible on the devices, so we can create a setup where both parties' assets are being valued and there is a fair exchange. But you never know how it will eventually turn out until you have the ink on the paper." He also said that unlocked phones will not be able to access the AT&T co-branded store.

U.S. operators have employed a variety of strategies on the application storefront landscape. Verizon Wireless earlier this year unveiled plans to operate its own app store, while T-Mobile USA has pushed its own applications through Google's Android Marketplace.

For more:
- see this CNET article

Related Articles:
Nokia confirms redownloads for Ovi Store purchase
Sizing up the Ovi Store five months on
Ovi Store finally opens for business

Article updated Nov. 2 to clarify Nokia's relationship with AT&T.

Palm faces challenges as competition heats up

Phil Goldstein — Mon, 02 Nov 2009 11:38:15 -0500

As Palm heads into the critical holiday shopping season, analysts are starting to worry the company will be outshined by the competition.

Specifically, Motorola seems to have stolen some of the smartphone thunder from Palm and its webOS platform with the introduction of its first two Android phones. Citi analyst Jim Suva downgraded Palm and Research In Motion while upgrading Motorola.

"Motorola is launching of one of the most compelling offerings at [a] time when many investors have given up on the company's handsets," Suva wrote in a research note. "The revolution of product and application service offerings is going to start to crack open the enterprise door and could pose a risk for BlackBerry. Major shifts in promotion support creating a promotion commotion in the months ahead [that favor] Motorola and post a challenge for RIM and Palm."

Indeed, Motorola will have Verizon Wireless backing its Droid smartphone and T-Mobile USA touting the Cliq during the holiday season. And Sprint Nextel, the only U.S. carrier currently offering the Palm Pre, is likely to emphasize its new Android offerings, the HTC Hero and the Samsung Moment, via its holiday marketing, possibly at the expense of the Pre. Further, Sprint is set to launch Palm's second webOS phone, the Pixi, later this month for $99, which could potentially cannibalize Pre sales. (In its most recent quarterly report, Palm disclosed sales of around 800,000 smartphones, the vast majority of which were the Pre.)

And it appears investors have noticed the warnings signs. During the past few weeks, Palm's stock has dropped precipitously, from around $17 per share at the end of September to around $12 per share today.

However, Palm likely is hoping to boost its standings in the coming months with expanded distribution; the company has rolled out the Pre in international markets, and Verizon Wireless has said it will sell the device sometime next year.

For more:
- see this Barron's blog post
- see this TheStreet.com article

Google Voice has more than 1.4M users

Phil Goldstein — Mon, 02 Nov 2009 11:20:18 -0500

Google Voice has more than 1.4 million users, and of those, 570,000, or 40 percent, use the service every day, according to a confidential part of a letter Google sent to the FCC, which was disclosed by BusinessWeek. Additionally, according to the letter, Google may expand the service internationally. The figures on the growth and popularity of the service give some greater context to a fierce debate over the service between Google and AT&T.

Last week, Google sent a letter to the FCC about Google Voice in response to a series of questions that the FCC had posed to Google about the nature of the service. Several portions of the letter were redacted and marked as confidential. A formatting error led to the accidental publication of the confidential material. The FCC has since replaced Google's response with the version that has the material redacted.

"We had intended to keep sensitive information regarding our partners and the number of Google Voice users confidential," Google said in a statement to BusinessWeek. "Unfortunately, the PDF submitted to the FCC was formatted improperly." The confidential portions of the letter also state that Google has inked contracts with a number of "international service providers for inputs to Google Voice," but that the services had not yet been launched.

Until now the extent of Google Voice's popularity wasn't known. The service started in 2005 and remains invitation-only, yet has been the subject of an intense debate in recent weeks. AT&T has argued that the service is improperly blocking calls to rural areas and should be regulated like a traditional telephone service. Google has countered that it blocks calls to fewer than 100 specific phone numbers due to what Google said were high-cost "traffic pumping schemes." Google also said that the service not be regulated like a traditional telephone service because it is a "Web-based software application" that is "completely distinct from the user's telephone access lines/services."

In other Google news, Andy Rubin, director of mobile platforms at Google, quashed a rumor that the company was planning to release its own phone based on its Android platform. In October, TheStreet.com reported that Google was planning to release its own branded, unlocked, Android-based phone this year. Rubin said the company was not going to "compete with its customers."

"We're not making hardware," Rubin told CNET in an interview. "We're enabling other people to build hardware."

For more:
- see this BusinessWeek article
- see this CNET article

Sprint launches first netbook

Phil Goldstein — Mon, 02 Nov 2009 10:57:18 -0500

Sprint Nextel launched its first netbook, joining Tier 1 rivals AT&T Mobility and Verizon Wireless in the netbook craze. Operators have increasingly turned to devices like ereaders and netbooks as additional sources of mobile data revenue.

Sprint will offer the Dell Inspiron Mini 10 Netbook (a version of which AT&T also offers). The device has an EV-Do Rev. A connection, a 10.1-inch LED screen, a built-in 1.3-megapixel webcam and a 160 GB hard drive.

AT&T kicked off the focus on netbooks earlier this spring, and launched devices in a nationwide rollout earlier this summer. Verizon Wireless launched its first netbook earlier this spring as well, and recently announced the launch of another.

Sprint said the Dell netbook is now available at select Sprint stores in the Minneapolis-St. Paul area, and will cost $199.99 with a two-year mobile broadband contract and after a $100 mail-in rebate. Sprint is pushing a mobile broadband plan with the netbook, giving users 5 GB of data for $59.99 per month.

For more:
- see these pictures and specifications
- see this release

Smartphone subsidies problematic for Sprint

Lynnette Luna — Mon, 02 Nov 2009 00:51:26 -0500

Subsidies are here to stay, and they are getting more problematic for some given the fact that smartphones are expensive to build but consumers expect them to cost $200 or less.

For a company like AT&T, which continues to ride high on iPhone sales, subsidies have generated new customers, new cash flows and positive net present value. Now that the subsidy has been paid back by a number of iPhone customers, AT&T is reaping the benefits of higher ARPU and lower churn. Those things offset the higher acquisition costs associated with the device.

For a company like Sprint Nextel, which continued to bleed subscribers in the third quarter, subsidies are making a comeback all the more difficult. Goldman Sachs analyst Jason Armstrong said in a research note that Sprint's wireless adjusted EBITDA was 10 percent below the consensus level. He noted that the improvement in gross customer adds during the quarter mostly reflected increased handset subsidies and more expensive promotional activity. "We believe any marked improvements in the postpaid trajectory will come at a heavy cost," Armstrong said.

During Sprint's conference call with analysts last week, Sprint CEO Dan Hesse noted that smartphone subsidies are the new norm. "It does hit you in the short-term when your gross adds go up in particular," he said.

It looks like any recovery in net adds will indeed come at a heavy cost. Sprint is banking on WiMAX to drive subscriber adds next year, and Hesse promised that the 3G/4G devices it offers "will carry some significant subsidies with them as well." The company needs a differentiated product as its aggressive moves around pricing plans and devices, such as the Palm Pre, haven't made enough of a dent in subscriber additions to date.

It won't be easy given the competition from Sprint's healthier operator competitors that have the financial wherewithal to send prices down even further in the smartphone subsidy game. Moreover, these 3G/4G device subsidies must be pretty steep given the fact that 3G smartphone pricing is falling. ABI Research said 27 percent of smartphones offered so far this year were sold for under $200. Of course, 3G/4G devices should be able to garner somewhat of a premium--but not much given a relatively small WiMAX footprint and the intense need Sprint has to add subscribers.

Investors don't like to see a margin decline nor do they like to see customer acquisition costs rise. But this is the new reality of the smartphone game. The question is: Will investors have the confidence in Sprint to see the payoff in the long run? --Lynnette

How did the world's top handset vendors fare in Q3?

Phil Goldstein — Fri, 30 Oct 2009 11:22:07 -0400

Did handset makers break out of their slump in the third quarter? Not quite, but there appears to be growth on the horizon. Now that Motorola and Samsung have released their quarterly handset numbers, it's time to take stock of the situation. Research firms IDC and Strategy Analytics released separate, detailed breakdowns of the market. What were their thoughts? Special feature

Broadcasters wary of FCC spectrum plans

Phil Goldstein — Fri, 30 Oct 2009 11:17:04 -0400

Broadcasters are growing increasingly anxious over the prospect that the FCC may re-allocate broadcast spectrum for use by wireless carriers as part of its national broadband plan. Meanwhile, the FCC official in charge of the broadband plan, Blair Levin, did not seem to back away from the idea, and again stressed the need for more spectrum, likening the country's position in wireless broadband to that of former football player Doug Flutie.

According to Levin, Flutie had a lot of great attributes, but at 5'10" was short relative to many quarterbacks. "Spectrum is like height. If you don't have it, it's pretty hard to be in the big leagues," he wrote in a post on the FCC's broadband blog. "As they say, you can't coach height."

CTIA has asked the FCC to make up to 800 MHz of additional licensed spectrum available for wireless companies. Levin, in his post, wrote that there was about 50 MHz of spectrum in the pipeline, "and it's not very good spectrum for mobile broadband." Consequently, from now until February, when the broadband plan is due, the challenge will be to "understand the tough trade-offs, come up with creative options, and produce a plan that can truly help deliver all the fantastic opportunities that mobile broadband can provide," according to Levin.

Those "tough trade-offs" might involve taking spectrum from broadcasters, something they--surprise, surprise--are not keen on. "We don't know all the specifics of the FCC proposal, but at this point, it's not a very appealing proposition to most broadcasters" Dennis Wharton, a spokesman for the National Association of Broadcasters, told Reuters.

For more:
- see this FCC blog post
- see this Reuters article
- see this Washington Post article

NSN conducting LTE tests with four mystery device vendors

Phil Goldstein — Fri, 30 Oct 2009 10:55:30 -0400

Nokia Siemens Networks said it is conducting end-to-end LTE interoperability tests with four unnamed "leading device vendors," a signal that the company is not going to cede ground or the LTE spotlight to rivals Alcatel-Lucent and Ericsson.

The vendor said that the tests are being conducted on several frequency bands required in different regions, including AWS, 700 MHz and 2100 MHz. As more and more carriers begin preparing for what is expected to be a large, worldwide commercial rollout for LTE next year, infrastructure vendors are touting the advancements they are making with LTE testing--and Nokia Siemens is no exception.

In recent weeks, the company's rivals also have touted their own LTE bona fides. Alcatel-Lucent recently trumpeted that it will launch 14 new LTE operator trials during the next six months. And last month, Ericsson was chosen by MetroPCS as the primary infrastructure vendor for the carrier's forthcoming LTE network, the second major LTE contract win Ericsson has in North America alone (after Verizon Wireless).

According to ABI research, at least a dozen operators will launch LTE networks next year.

For more:
- see this release

Samsung ships record 60.2 million handsets in Q3

Phil Goldstein — Fri, 30 Oct 2009 10:30:47 -0400

Samsung Electronics posted its highest quarterly profit ever in the third quarter, partly due to its success in handsets--the global No. 2 handset manufacturer shipped a record 60.2 million phones in the quarter.

On a company-wide basis, Samsung's profit tripled to $3.14 billion, up from $1.02 billion in the year-ago quarter. Samsung's handset shipments in the quarter were up 16 percent from the year-ago quarter, when it shipped 51.8 million units, and up 15 percent from the second quarter, when it shipped 52 million units. The average selling price of Samsung's phones declined slightly to around $120 per unit. However, the profit margin in Samsung's handset division rose to 7.7 percent, up from 7.2 percent in the year-ago period (the company set a goal of finishing the year with a double-digit operating margin for its handset division).

Samsung's global handset market share stood at 20.8 percent in the quarter--putting it between No. 1 Nokia and No. 3 LG.

In the coming quarters, Samsung said it intends to focus on both the high end and the low end of the handset market. The company said it expects steady sales growth from its AMOLED touchscreen phones and smartphones.

"Driving growth was a combination of touchscreen-enabled and Qwerty messaging devices going into developed markets as well as key models within emerging markets," wrote research firm IDC on Samsung's results. "Looking to the fourth quarter of 2009, Samsung is poised to launch strategic converged mobile devices running on Android and Linux."

"This was the first time a vendor other than Nokia has shipped more than one-fifth of the world's handsets since Motorola's Razr-heyday performance of 2006," wrote research firm Strategy Analytics in analyzing Samsung's numbers. "The key to Samsung's growth has been an attractive portfolio of touchphones and an expanding retail presence across multiple regions."

For more:
- see FierceWireless' Q3 earnings page
- see this wrap-up of the world's handset makers in the third quarter
- see this WSJ article (sub. req.)
- see ths Bloomberg article

Sprint's plan of attack

Phil Goldstein — Fri, 30 Oct 2009 09:47:12 -0400

Sprint Nextel reported its third quarter earnings yesterday, and although the company had its biggest sequential uptick in gross subscriber additions in years, it still lost 545,000 net wireless customer in the quarter, including net losses of 801,000 postpaid customers.

At a time when its two larger rivals, AT&T Mobility and Verizon Wireless, are adding customers at a very strong pace (AT&T added 2 million net adds in the quarter and Verizon added 1.2 million), the thought of more subscriber losses should be troubling for Sprint. I spoke with Sprint CEO Dan Hesse yesterday after the firm's earnings announcement and he was realistic about the task ahead. He acknowledged that Sprint still has a long way to go to get back to positive subscriber growth.

I don't think devices alone will be enough to prompt subscribers to go to Sprint. Although the company has announced two Android phones (the HTC Hero and the Samsung Moment) to its lineup as well as one of the better BlackBerry devices on the market (the Tour), and two devices using the Palm webOS platform (the Pre and the Pixi), Sprint likely won't enjoy the iPhone-style growth of AT&T.

But not all is lost. Hesse has been bold this year, and deserves praise for taking several steps to improve Sprint's overall position in the market. The introduction of Sprint's "Any Mobile, Anytime" plan in early September, which offers unlimited mobile-to-mobile calling to any wireless number on any U.S. wireless carrier at any time, was a smart move. Explained Hesse of the offering: "We said, hey, let's just completely eliminate calling circles and do something even more powerful." It's still too early to tell if the plan is making a difference, but with continued marketing, I think it could lure customers looking for a great value to Sprint.

Hesse's other big bet is on 4G, via Sprint's Clearwire partnership. Sprint has launched mobile WiMAX service in 17 markets as a wholesale partner of Clearwire, and will launch in some large markets--Boston, Houston, New York, San Francisco and Washington, D.C.--next year. Hesse knows the key to success with 4G (aside from just getting the networks up and running) is having compelling devices. Next year, Hesse said Sprint will introduce its first 3G/4G dual-mode smartphones.

If Sprint can tangibly demonstrate the benefits of 4G via a slick smartphone while Verizon Wireless is still rolling out its first LTE markets, it will both give more credence to the claim that Sprint is the leader in 4G and show consumers that Sprint can still be innovative.

As Hesse and the Sprint executive team are learning, it takes a long time to overcome a reputation for poor customer service--and even longer for perception to catch up to reality. Yet Hesse remains confident that his bold moves will pay off. The market will ultimately decide, but if Sprint can combine its innovative and daring price plans with a more robust 4G offering, I think Hesse and Sprint will have plenty of reasons to be confident. For more of my interview with Hesse, click here. --Phil

P.S. Please be sure to check out our Top 25 Most Powerful People in U.S. Wireless 2009 list. Hesse is on there, along with many other top executives.

Alca-Lu posts wider loss, but reiterates forecast

Phil Goldstein — Fri, 30 Oct 2009 08:44:59 -0400

Alcatel-Lucent reported a wider net lost in the third quarter on weaker sales. However, the company restated its previous forecast of nearing break even for the year on an adjusted operating level.

The infrastructure vendor had a net loss of around $270 million, wider than its net loss of $59.2 million in the year-ago period. Revenue fell 9.3 percent to to $5.46 billion. The company's carrier unit saw a double-digit decline in revenue.

Alcatel-Lucent's stock remained relatively unchanged on the news, sitting at around $4.17 per share in early morning trading.

Despite the weak performance, the company maintained its outlook on nearing break even by the end of the year. The company is in the midst of a $1.1 billion cost-cutting program, and Alcatel-Lucent CEO Ben Verwaayen said the vendor had achieved 80 percent of the cuts so far this year. He said he expects the telecom sector to return to single-digit growth in 2010.

It appears Alcatel-Lucent won't be alone in its third quarter troubles. Already this month rival Ericsson reported a 71 percent decline in profit.

For more:
- see FierceWireless' Q3 earnings page
- see this release
- see this WSJ article (sub. req.)
- see this FT article
- see this Bloomberg article

Sprint's Hesse on how the carrier will get back to growth - page 2

Phil Goldstein — Thu, 29 Oct 2009 17:35:03 -0400

FierceWireless: Why the decision to launch "Any Mobile, Anytime?" What do you think of the T-Mobile rate plan changes--do they affect you in any way?

Hesse: I can't say that competitive moves don't affect us. They all do. That said, we launched "Any Mobile, Anytime," because we were really the only major player in the market without a calling circle, if you will. And we looked at it, and we also did some research, and calling circles, yeah, they're nice, but they're still pretty restrictive. So we thought there was an opportunity, like with Simply Everything, to put a real game changer out there that consumers immediately understand and really like. And that's unlimited mobile-to-mobile.

FierceWireless: Do you think consolidation in the U.S. market is beneficial or necessary?

Hesse: I can't say whether it's beneficial or not. I'm not saying it's not beneficial. I don't see it as necessary, looking at it from Sprint's point of view. What's behind the question sometimes, and they don't say it, is: Do you need to be acquired? And the answer to that is no, that's not necessary. We don't think that's necessary. So I'm not saying that a merger of some kind--and again it's all theoretical--would be beneficial. So there's, if you will, a continuum between beneficial and necessary. I'm saying necessary, no. It's definitely not necessary from our viewpoint.

FierceWireless: What do you think about the FCC's decision to ahead with a rulemaking process that applies net neutrality to wireless? And how do you think this issue of "reasonable network management" is going to be resolved?

Hesse: Well, what we're encouraged by in the FCC chairman's remarks and what's come out from the FCC are, first of all, they understand there are differences between wireless and wireline networks. We support the overall principles of net neutrality. What we want to protect against are any unintended consequences. And that gets into network management. An example would be, you could have three or four users that put their Slingbox on and leave, they could take down a whole sector. That's not good for the consumer, that's not good for the market, it's not good for us, it's not good for anybody. So we need to do certain things, because again wireless networks, even with all of the capacity we're adding--and of course the iPhone-AT&T stuff is a perfect example--wireless networks are more constrained that wireline networks. As long as we can manage the networks appropriately so that we can provide the most benefit to the most users, and not have the many suffer at the hands of the few, I think we can work out a solution with the commission. And I the commission's intent is good, and I think they don't want any unintended consequences either.

FierceWireless: Will Sprint be able to fund Clearwire as well as pay for its acquisitions of Virgin Mobile USA and iPCS?

Hesse: That's correct. We're sitting on, at the end of the third quarter, as I mentioned, almost $6 billion in cash and marketable securities.

FierceWireless: What do you think will be the biggest way for Sprint to grow its 4G strategy and presence? People say the connection is great, but we don't have any great devices to take advantage of the network. When will we see dual-mode 3G/4G handsets?

Hesse: You hit the nail on the head. And the first thing that will make a huge difference, you've seen the MiFi cards for 3G? And we have a dual-mode version now with what's called a Cradlepoint, where you put the dual-mode 3G/4G aircard into this little WiFi router, and it can provide four connections. But it's still a little bulky compared to the 3G version. There will be a new dual-mode version that will be significantly smaller that will come out.

Then, what will come after that next year are some really cool dual-mode phones. And you're right, as these devices come on board, that will have a big impact on 4G. So when you ask carriers questions about 4G, [it's not just] in terms of having the network up and working, but it's having the devices. Both of them are very important to 4G adoption. And I am really excited about dual-mode phones for next year.

Sprint's Hesse discusses the carrier's growth plan

Phil Goldstein — Thu, 29 Oct 2009 17:29:14 -0400

with Sprint Nextel CEO Dan Hesse

Sprint Nextel just reported third quarter earnings that showed continued success in the prepaid sector but another massive loss--801,000 subscribers--on the postpaid side. Nevertheless, Sprint CEO Dan Hesse was upbeat about the progress the carrier has made on gross additions. He acknowledged Sprint still has a long way to go, and in an interview with FierceWireless associate editor Phil Goldstein, Hesse discussed Sprint's path back to subscriber growth, consolidation in the wireless industry, the FCC's action on net neutrality and new dual-mode 3G/4G phones coming next year.

FierceWireless: How and when are you going to get back to postpaid subscriber growth?

Hesse: We haven't provided that forecast yet. We clearly are focusing as a company first on total subscriber growth, and revenue growth, and then postpaid subscriber growth will probably follow that. So that is part of our plan, but we haven't given a forecast or guidance yet with respect to when we expect that to happen.

FierceWireless: You said you can't just focus on churn reduction. What is the overall strategy?

Hesse: You're exactly right. It's to do both. It's to both improve churn and to improve gross adds. And so if you're to go back, I joined the company basically in Christmas of 2007. In 2008, we were the only major U.S. wireless carrier that decreased churn. And so we brought that down. But it's kind of stabilized. We have to take it to the next level. So there's still opportunity for us to lower churn further--and we have to do that.

But since the end of 2005, really since the merger [with Nextel], our gross adds have been declining steadily, to the point where they had declined over 2 million gross adds per quarter. That's a big decline. And that's really been the major story with respect to our net add number, it's been the decline in gross adds. And you have to do both. I hate to do the sports analogies, but to win you have to have a good defense and a good offense. So we have been beginning to shore up the defense. And again, seven consecutive quarters of improved customer experience. A lot of things we were doing to get churn better. Again, we still need to do a lot more, and there's more opportunities there.

This quarter was not only an uptick in gross adds, but was the biggest uptick sequentially since we've had records. And the reason I said over five years is we don't have pro forma records that go back further than that. And on a year-over-year basis, it's the biggest improvement in four and a half years. We have to make further improvements in churn, and also increase gross adds. They'll both need to contribute, significantly, to get our net add numbers positive on the postpaid side. And of course what's helping mitigate the decline in postpaid, from a revenue perspective and an earnings perspective, is the strong growth we're getting in prepaid. Continued

Video: Apple fans strike back at Verzion's anti-iPhone marketing campaign

Mike Dano — Thu, 29 Oct 2009 12:27:41 -0400

Source: YouTube user "droiddont"

Motorola makes strides in Q3, posts $12M profit

Sue Marek — Thu, 29 Oct 2009 11:12:09 -0400

Motorola appears to be making good on its promise to turn itself around. The struggling equipment maker surprised investors today by posting a third quarter profit of $12 million, way up from the $397 million loss it recorded in the third quarter of 2008. However, the company's third quarter sales were $5.45 billion, down from $7.48 billion in third-quarter 2008. Most of the company's profits were based on its aggressive cost cutting.

During its earnings call with investors, Motorola co-CEO Sanjay Jha touted the company's recent debut of two Android smartphones. Jha and other Motorola executives were in New York for the call, following yesterday's introduction of the Motorola Droid, which will be sold exclusively by Verizon Wireless. The company's other Android smartphone, the Cliq, is being offered by T-Mobile USA.

Motorola shipped 13.6 million handsets in third quarter, down from 25.4 million in the year-ago period. Motorola estimated its global market share at 4.7 percent. The division had sales of $1.7 billion, down 46 percent from the third quarter of 2008. The division had an operating loss of $183 million, significantly smaller than the $840 million operating loss in the year-ago quarter. The company's handsets had an average selling price of $124 in the quarter.

Jha, who heads the company's mobile devices division, said Motorola will ship fewer phones in fourth quarter and likely will make fewer feature phones in 2010 as it sees more profitability and growth in the smartphone category. "We expect to have a declining pool of feature phones because of cannibalization of smartphones," Jha said.

Interestingly, Jha added that in 2010 he expects most of the company's smartphones will be launched on the Android platform--but he stopped short of saying that all Motorola smartphones will use Android.

Meanwhile, the company's Home and Networks Mobility segment had sales of $2 billion, down 15 percent from a year ago. Motorola said it has shipped 1 million WiMAX CPE devices.

Investors seemed pleased with the news, sending Motorola's stock up more than 12 percent after the report to around $8.91 per share.

For more:
- see FierceWireless' Q3 earnings page
- see this press release
- see this Reuters article
- see this Wall Street Journal article (sub. req.)

Breaking down all of the market's unlimited plans

Phil Goldstein — Thu, 29 Oct 2009 11:00:50 -0400

T-Mobile USA's decision to add an unlimited, no-contract plan to its pricing options was not as dramatic as some analysts were predicting. However, it was still a bold move, and came a few weeks after Sprint Nextel unveiled its "Any Mobile, Anytime" plan, which gives subscribers unlimited mobile-to-mobile calling to any mobile number at any time. So how do all of the unlimited plans stack up? Research firm Current Analysis has produced a handy chart to help sort through all of the prices. Both Sprint and T-Mobile offer unlimited plans at lower rates than AT&T Mobility and Verizon Wireless, though there are variations among all of the plans. Check out this chart for the breakdown: Special feature

Report: AT&T to launch Nokia smartphone with Qualcomm chip

Phil Goldstein — Thu, 29 Oct 2009 10:51:43 -0400

AT&T Mobility will launch a Nokia smartphone powered by a Qualcomm chip and running the Symbian platform, according to a VentureBeat report, a move that would further deepen the relationship between the nation's second largest carrier and the world's largest handset vendor.

The VentureBeat report cited an unnamed source close to Nokia. The report did not provide any details about the device or a possible launch date.

AT&T has launched several high-profile devices from Nokia over the past several months, including the E71x and the Surge smartphones, both of which run on the Symbian S60 platform. AT&T also is providing 3G connectivity for Nokia's first netbook, the Booklet 3G, which will be available in Best Buy stores by mid-November. The carrier's support of Nokia products is notable in light of Nokia's relatively weak position in the U.S. market, for which it has been long lambasted.

The news also reflects a possible blooming of the newfound partnership between Nokia and Qualcomm. In February, Nokia and Qualcomm announced a deal to release next-generation devices initially for the North American market. The companies said the UMTS phones would be launched in mid-2010 and would run the Symbian OS S60 platform using Qualcomm's chips.

Representatives from Nokia and AT&T declined to comment on the report.

For more:
- see this VentureBeat article

Google: Call blocking on Google Voice limited

Phil Goldstein — Thu, 29 Oct 2009 10:32:37 -0400

Google said it has found a way to restrict call blocking on its Google Voice service to fewer than 100 specific phone numbers, the latest twist in a battle that has pitted the Internet search giant against AT&T, with the FCC as a moderator.

In response to an FCC inquiry on Google Voice, Google said that beginning in July it began noticing "extremely high-cost calls to a concentrated number of destinations." In fact, Google said, the top 10 telephone prefixes generated more than 160 times the expected call volume. The company suspected that certain numbers were engaging in high-cost "traffic pumping schemes," and local carriers were charging high rates to connect the calls in rural areas. In August, the company began blocking the calls.

In September, AT&T asked the FCC to look into the service, arguing it violated both federal call-blocking regulations and net neutrality principles. Google reiterated its position in its response to the FCC that Google Voice should not be regulated like a traditional telephone service because it is a "Web-based software application" that is "completely distinct from the user's telephone access lines/services."

Google said in a blog post on the topic that its engineers have developed new techniques since the call blocking began to block only calls to numbers that engaged in "high-cost 'traffic pumping' schemes, like adult chat and 'free' conference call lines." The call blocking now occurs on a more "granular" level, wrote Richard Whitt, Google's Washington telecom and media counsel.

"While we've developed a fix to address this problem, the bottom line is that we still believe the commission needs to repair our nation's broken carrier compensation system," Whitt said. "The current system simply does not serve consumers well and these types of schemes point up the pressing need for reform."

An FCC spokeswoman said the commission had no comment on Google's response, and did not comment on the status of the FCC's investigation into Google Voice.

For more:
- see this WSJ article (sub. req.)
- see this Google blog post

In metrics: Sprint's third quarter 2009 results

Mike Dano — Thu, 29 Oct 2009 09:31:32 -0400

Sprint Nextel reported another flimsy quarter, showing declines in financials and subscriber additions. Check out some of the figures and statistics the company issued to investors to counterbalance the negative results.

Click here to get started

<--Back to the story

Q3: Sprint continues to lose postpaid subscribers

Phil Goldstein — Thu, 29 Oct 2009 09:16:23 -0400

Although the bleeding slowed, Sprint Nextel reported continued postpaid subscriber losses in the third quarter. The company's prepaid business had another strong quarter, but Sprint's net loss widened and it saw a drop in revenue in the quarter. During the company's earnings conference call, Sprint CEO Dan Hesse highlighted the fact that the company's net retail subscriber numbers were the best in two years, and also touted the carrier's smartphone lineup, which now includes the Palm Pre, Research In Motion's BlackBerry Tour, the HTC Touch Pro 2, the HTC Hero (Sprint's first Android phone) and the Samsung Moment (Sprint's second Android phone).

However, Hesse acknowledged the company would have to improve on the subscriber front. Here's a breakdown of some of Sprint's key metrics:

Subscribers: Sprint said net retail subscribers declined by 135,000 and net wireless customers declined by around 545,000, including net losses of 801,000 postpaid customers. The postpaid loss is down from 991,000 postpaid subscriber losses in the second quarter. The company gained a net 801,000 prepaid iDEN customers, which was offset by net losses of 135,000 prepaid CDMA customers. Sprint also had a net loss of 410,000 wholesale and affiliate subscribers because of subscriber losses from its MVNO partners and machine-to-machine devices. Sprint had a total customer base of 48.3 million customers at the end of the quarter, compared with 48.8 million at the end of the second quarter.

"So if we can get churn under control and make further improvements in churn, and also increase gross adds--we'll need to do both," Hesse said in an interview with FierceWireless. "They'll both need to contribute, significantly, to get our net add numbers positive on the postpaid side. And of course what's helping mitigate, from a revenue perspective and an earnings perspective, the decline in postpaid is the strong growth we're getting in prepaid."

Financials: Total revenue fell 9 percent to $8.04 billion, down from $8.81 billion in the year-ago quarter. Wireless service revenues for the quarter of $6.3 billion declined 8 percent year-over-year and 2 percent sequentially. Sprint said the year-over-year and sequential decline was due to fewer postpaid subscribers, partially offset by more prepaid subscribers. Sprint had a net loss of $478 million million, up from $326 million in the year-ago quarter.

ARPU: Sprint said postpaid ARPU remained stable at $56--where it has been for the past seven quarters--primarily due to continued growth in fixed-rate bundled plans like Simply Everything, and offset by declines in usage and roaming. Data revenues contributed more than $16.25 to overall postpaid ARPU in the third quarter, led by growth in CDMA data ARPU. Prepaid ARPU in the quarter was around $35, up from $31 in the year-ago period and $34 in the second quarter.

Churn: Postpaid churn was 2.17 percent, up from 2.15 percent in the year-ago period and 2.05 percent in the second quarter. Sprint said the sequential increase was due to "seasonality" and heightened competition. Prepaid churn was 6.65 percent, down from 8.16 percent in the year-ago period but up from 6.38 percent in the second quarter. The company said the year-over-year improvement in prepaid churn was due to increased subscriber additions to its Boost Monthly Unlimited offering.

Consolidation: Hesse addressed the issue of industry consolidation, following rumors in September that Deutsche Telekom might be considering a bid for Sprint. He noted there was intense competition in the U.S. wireless market, and said it was "hard to say if there will be more consolidation, particularly among the major players."

4G: Hesse also touted the company's commitment to 4G through its relationship with Clearwire, in which it holds a majority stake. He noted that Sprint has launched its Sprint 4G service in 17 markets as a wholesale customer of Clearwire's, and that Clearwire intends "to continue to raise funds for what we consider an aggressive buildout" of its mobile WiMAX network. "Sprint is able and supportive of funding our proportionate share" if Clearwire needs more funds for its buildout, he said.

In the interview, Hesse said that the company would be launching a dual-mode 3G/4G MiFi device, which could use Clearwire's mobile WiMAX network to create WiFi clouds. He also confirmed that Sprint would be launching dual-mode 3G/4G smartphones next year, but declined to give details.

"So when you ask carriers questions about 4G, [it's not just] in terms of having the network up and working, but it's having the devices," he said. "Both of them are very important to 4G adoption. And I am really excited about dual-mode phones for next year."

Sprint's stock remained relatively stable on the earnings news, trading at around $3.20 per share in late morning trading.

For more:
- see these quarterly metrics
- see FierceWireless' Q3 earnings page
- see this release