FierceWireless

Motorola: WiMAX experience paves LTE path

Phil Goldstein — Fri, 04 Dec 2009 11:41:28 -0500

Motorola has generally been outshone in the LTE arena by the likes of Alcatel-Lucent, Ericsson, Huawei and Nokia Siemens Networks. However, the company believes its work in WiMAX will give it a leg up on the LTE competition. Bruce Brda, Motorola's senior vice president and wireless networks general manager, told Telephony that the work the company has done with mobile WiMAX networks in the field is the company's trump card. By solving problems and fine-tuning WiMAX networks, Motorola has picked up experience that it can apply to LTE, he said. Article

AT&T, Verizon unveil new holiday smartphone promotions

Phil Goldstein — Fri, 04 Dec 2009 11:20:50 -0500

AT&T Mobility and Verizon Wireless are each starting new promotions today aimed at getting customers to snap up smartphones (and their attendant data plans) in a final push for the holiday shopping season.

AT&T is halving the price of its BlackBerry devices from Research In Motion, including the new BlackBerry Bold 9700, with a two-year contract and after a mail-in rebate. Additionally, the carrier is offering the Samsung Solstice for free after a $50 mail-in rebate. An AT&T spokeswoman said there is currently no end date for the promotion, but that it would run through at least the rest of the holiday shopping season. The action may be a holiday response to Verizon's long-running buy-one-get-one BlackBerry promotion.

Separately, Verizon is launching an Android-focused promotion, which runs today through Dec. 7. Customers can buy either the Motorola Droid or the HTC Droid Eris, and can get another Droid Eris for free--that is, with a new, two-year contract and after rebate. In another bit of Verizon Android news, Verizon spokeswoman Brenda Raney confirmed to FierceWireless that the Droid Eris, which currently runs Android 1.5, will be upgraded to at least Android 2.0 sometime in the first quarter.

Currently, the Moto Droid is the only smartphone on the market running Android 2.0.

For more:
- see this release
- see this Verizon offers page
- see this Mobile Burn article

Sprint partners with Hearst on new ereader service

Phil Goldstein — Fri, 04 Dec 2009 10:56:58 -0500

Sprint Nextel will provide wireless connectivity for a range of dedicated ereaders next year as part of a new digital publishing service from Hearst. The service, called Skiff, will transmit content from newspapers, magazines and other sources to various devices, and Hearst is positioning the offering as an alternative to Aamazon.com's Kindle store--arguing the content from Skiff will have better graphics and richer layouts.

The multi-year contract with Sprint for 3G connectivity in the United States is a win for the carrier in the digital ereader market. Sprint was the original force that powered Amazon's Kindle device, but the ereader market has grown increasingly crowded this year as carriers have expanded their wireless services beyond traditional voice and data offerings. Indeed, Verizon Wireless has partnered with Royal Philips Electronics spinoff iRex Technologies to power the firm's touchscreen ereader device, and AT&T Mobility will provide wireless service for four separate ereaders: the Nook from Barnes & Noble; Amazon's Kindle (the international edition); Sony's Daily Edition device; and Plastic Logic's forthcoming ereader.

Sprint will sell Skiff readers in its retail stores and online, and additional distribution channels will be announced next year. Skiff, which is wholly owned by Hearst right now, said it is working with major electronics manufacturers to "integrate Skiff's service, digital store and specialized client software into a range of innovative devices." Skiff also said the new service would be available through smartphones and netbooks, but did not provide details.

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

Lawmakers, FCC target carriers' ETF policies

Phil Goldstein — Fri, 04 Dec 2009 10:28:10 -0500

Four senators, including Sen. Amy Klobuchar (D-Minn.), introduced legislation that would limit the amount that wireless carriers can charge in early termination fees (ETFs). The bill would put a cap on the ETFs based on the cost of the phone, and would require carriers to pro-rate ETFs.

The other senators who sponsored the legislation are Sens. Russ Feingold (D-Wis.), Jim Webb (D-Va.) and Mark Begich (D- Alaska). "Forcing consumers to pay outrageous fees bearing little to no relation to the cost of their handset devices is anti-consumer and anti-competitive," Klobuchar said in a statement.

CTIA, the wireless industry's trade association, shot back that the legislation was simply not needed. "This legislation is unnecessary simply because wireless carriers already pro-rate ETFs," CTIA President Steve Largent. "That was the response of a highly competitive industry to consumer demand, and this type of prescriptive mandate runs the very real risk of limiting consumer options in the future." Spokesmen from Verizon Wireless and Sprint also defended their respective ETF policies.

And in a separate but related action, the FCC sent a letter to Verizon asking the carrier to explain its recently announced "advanced devices" ETF, which raises the pro-rated fee to $350 for devices including netbooks and some smartphones. The FCC also raised questions about a $1.99 fee Verizon charged some users for unintended mobile Web access, following media reports about the incident.

In its letter, sent to Steve Zipperstein, Verizon's general counsel, the FCC raises a number of questions, including: "It appears that if a customer cancels a two-year contract after 23 months, the customer would still owe an ETF of $120. Is this correct? If the ETF is meant to recoup the wholesale cost of the phone over the life of the contract, why does a $120 ETF apply?"

Verizon spokesman Jeffrey Nelson issued a response to the FCC's letter defending Verizon's ETF policies. "Nobody is required to pay an ETF," Nelson said. "You always have the choice of buying a mobile phone at full price with no ETF. Or you can buy a device at a discount with a 1- or 2-year contract. If you stay with your contract, you don't pay a fee at all."

As for the mobile Web charges, Nelson said "a few months ago we modified our service plans so when somebody accidentally turns on a data service they don't want, and they quickly turn that service off, there's no charge. Even if this happens a few times a month, there shouldn't be a charge on the bills."

Early termination fees essentially are intended to protect the subsidy wireless carriers apply to the handsets they sell. The fees also serve to 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. ETFs generally are only applied in a postpaid service scenario.

However, this is not the first time carriers' ETFs have come under fire. In recent years wireless carriers have faced FCC inquires and class-action lawsuits over the practice.

For more:
- see the FCC's letter to Verizon
- see this WSJ article on the FCC's letter to Verizon (sub. req.)
- see this CTIA statement
- see this WSJ blog post on the ETF legislation (sub. req.)
- see this The Hill article

Stop fanning the WiMAX vs. LTE flame

Sue Marek — Thu, 03 Dec 2009 16:54:24 -0500

There's a sage business philosophy that suggests companies are better off focusing on their own products and services rather than spending time and energy tearing down the competition. Having just returned from the WiMAX Forum Americas conference in Fort Lauderdale, Fla., I'd like to propose that the WiMAX Forum rally its membership around this advice.

During the two-day conference I repeatedly heard speakers expound on how WiMAX is a better technology than LTE, and hypothesize that LTE would not get a foothold in the market until 2012 or later. Frankly, I was surprised that so much effort was being spent discounting LTE rather than discussing ways WiMAX can improve as a mobile broadband service offering.

I participated in a panel about the media's perception of WiMAX. When I mentioned areas where I see weakness--such as the lack of WiMAX handsets and the loss of some WiMAX vendors (Nortel and Nokia Siemens Networks) from the vendor ecosystem--my comments ignited a firestorm from some members of the audience who believed I was unfairly criticizing WiMAX. I'm sure I'm not the first to talk about these issues, but the defensive behavior on the part of the WiMAX community isn't going to help it win over the media or the consumer.

The WiMAX vs. LTE technology war is over. LTE and WiMAX will coexist much like CDMA and GSM coexist today. I'm not sure why the WiMAX community insists on fanning this flame.

One of the most informative presentations at the event came from Mark Pagon, CEO of Xanadoo, a small WiMAX operator that has service in six markets in Illinois, Texas and Oklahoma. Xanadoo offers both postpaid and prepaid mobile broadband ranging from $14.95 to $39.99 per month. Customers pay based on how much speed they want--the faster the speed, the higher the price.

Xanadoo's innovative pricing plans appeal to a segment of the market that's largely untapped. Pagon said that more than 50 percent of Xanadoo's subscribers are under the age of 34, and 58 percent have an annual household income of less than $35,000. These subscribers also are renters and tend to move around a lot. That's why, Pagon said, the bundled offerings from wireline and cable providers don't appeal to them.

Pagon also was refreshingly frank in his assessment of the WiMAX ecosystem. He said he was disappointed that the vendor community hadn't developed as quickly as he had hoped, and he also wished there were more innovative devices--such as WiMAX handsets. "It's not surprising," Pagon said. "It just takes longer for technologies to become commercially viable."

What Xanadoo is doing in its markets reminds me of what Leap Wireless did when it first entered the cellular market. It recognized a need for low-cost voice service and started offering unlimited prepaid voice to consumers that didn't really have a lot of options from the larger Tier 1 cellular operators that were focused on higher paying customers.

I think the WiMAX community should focus on the innovators like Xanadoo. The WiMAX vs. LTE battle has been fought. Let's focus on the next stage--creating compelling mobile broadband offerings that consumers will want and will buy. --Sue

Nokia to halve next year's smartphone portfolio

Phil Goldstein — Thu, 03 Dec 2009 14:16:16 -0500

Nokia next year will cut the number of smartphones it releases roughly in half in order to better compete with the likes of Apple and Research In Motion. The company has introduced around 20 different smartphone models this year.

"We see ... really fierce competition certainly in the high end, but we also see it in the mid to low end of smartphones increasing," Jo Harlow, the head of Nokia's smartphone unit, said in a webcast. "We will defend our position, but we believe we also have tools to play offense as well as defense."

Indeed, Nokia has hinted at a reduction in the number of its forthcoming smartphone models; Nokia during the past several weeks has slashed close to 600 research-and-development jobs in locations across the globe, partly due to its plans to slim down its global handset portfolio in a bid to focus on fewer, flashier phones.

That Nokia is reworking its approach to smartphones comes as little surprise. In the third quarter, Nokia's smartphone market share dropped from 41 percent a year ago to 35 percent. It is still the global leader in smartphones, but Apple and BlackBerry maker RIM have been making gains. Further, Nokia reshuffled its front office in the wake of its $834 million loss in the third quarter. The company appointed CFO Rick Simonson as the new head of the Mobile Phones unit within Nokia's devices business. And Harlow moved from being senior vice president of global marketing for Nokia's handsets to running the company's Smartphones unit, the other unit in Nokia's devices business.

Earlier this week, Nokia said it expects the overall handset market to grow by 10 percent next year, though its own share of the market will remain flat during that period. The world's largest handset maker also reiterated its commitment to the Symbian platform as its main smartphone operating system (reserving Maemo for high-end devices), and said it will improve the user interface on Symbian.

For more:
- see this Reuters article

Motorola backs UI firm Sensitive Object

Phil Goldstein — Thu, 03 Dec 2009 11:58:10 -0500

Motorola's venture capital arm, Motorola Ventures, announced an investment in the user-interface company Sensitive Object. The amount of the investment was not disclosed. Sensitive Object's software uses acoustics to analyze sound waves emanating from the point of a touch, effectively transforming any product into a touch-based device. Motorola has committed itself to developing a slew of new smartphones next year, many of them based on Google's Android platform, which relies heavily on touchscreen user interfaces. Article

ST-Ericsson may slash up to 600 jobs

Phil Goldstein — Thu, 03 Dec 2009 11:53:42 -0500

ST-Ericsson said it will embark on a new cost-cutting program intended to save $115 million annually, a move that could result in the company cutting 600 jobs.

The chip maker, a joint venture between Ericsson and the Franco-Italian chipmaker STMicroelectronics, said the savings will come from cuts in operating expenses and spending, along with an "extensive" research and development efficiency program. This move follows restructuring the company announced in July.

The company, which provides silicon to the likes of Nokia, Samsung and Sony Ericsson, recently said it intends to break even this year with sales of between $750 million and $800 million. By the end of the third quarter, the company said it was mostly finished with a program to cut $250 million in operating expenses.

For more:
- see this release
- see this Reuters article

FCC: Should broadcasters give up spectrum for wireless?

Phil Goldstein — Thu, 03 Dec 2009 11:17:58 -0500

Following weeks of comments on the matter, the FCC is now seeking official public comment on how TV broadcasters use their current spectrum holdings, and whether they should give up some spectrum for wireless broadband use.

The notice, part of the commission's efforts to develop a national broadband plan, is sure to draw a range of comments from both sides of the debate; wireless carriers have been clamoring for more spectrum while broadcasters argue they need to hold on to their exiting airwaves. Comments are due Dec. 21.

Reallocating spectrum from broadcasters for wireless broadband services is an idea FCC officials have repeatedly floated. Indeed, Blair Levin, who heads the taskforce charged with developing the commission's national broadband plan, earlier this week seemed to signal that such a notice would be forthcoming.

"It is a bit of a mystery to me why we can't explore the idea that broadcasters might want to sell their spectrum, and that we have to close that dialogue down," he said Tuesday at a panel sponsored by the Progress & Freedom Foundation think tank. Both Levin and FCC Chairman Julius Genachowski--echoing wireless players--have repeatedly said that the United States will need more spectrum to expand the reach of broadband services.

Not surprisingly, the broadcasters' lobby is opposed to the idea. "Broadcasters believe we can help the FCC accomplish its mission without stifling growth opportunities of free and local TV stations and the millions of viewers that we serve," Dennis Wharton, a spokesman for the National Association of Broadcasters, told Bloomberg.

For more:
- see this Bloomberg article
- see this Washington Post article
- see this FCC filing
- see this Nextgov article

Dell'Oro: Infrastructure spending dropped 10% in Q3

Phil Goldstein — Thu, 03 Dec 2009 10:57:01 -0500

Global mobile infrastructure revenues fell 10 percent in third quarter, to $9 billion, compared with the year-ago quarter--largely due to a drop in 3G spending in China, according to the research firm Dell'Oro. During the period, Ericsson's share of the market remained relatively stable, while Huawei gained share on Nokia Siemens Networks.

China Unicom and China Telecom, which received 3G licenses in January, slackened their spending during the period, according to Dell'Oro. This led to a sharp decline in base station shipments for the world's top equipment vendors, as well as a rise in the average selling price of mobile equipment, since more equipment was sold in developed markets.

However, the global infrastructure market is likely to tick up, as China's three mobile carriers build out their 3G networks. Indeed, Dell'Oro said that China Unicom and China Telecom are expected to resume heavy spending in 2010, which will be a main contributor to growth in the WCDMA and CDMA markets.

Already, China Mobile announced it would invest $8.6 billion to build out its 3G network. And Alcatel-Lucent, for example, won two contracts from China Mobile and China Telecom totalling $1.7 billion to provide network upgrades, infrastructure and services.

For more:
- see this release

Nokia Siemens close to fourth LTE deal

Phil Goldstein — Thu, 03 Dec 2009 10:38:26 -0500

Nokia Siemens Networks is on the verge of announcing a fourth LTE deal, according to CEO Rajeev Suri, which would give the struggling equipment vendor some cause for optimism in what has been a tough year.

Company spokesman Kent Tankersley would not say when Nokia Siemens would announce the deal nor which operator the deal was with. He also did not specify whether the deal involved a radio access network or a core network. Thus far, NSN has won LTE radio access deals with NTT DoCoMo, Zain Bahrain and Telenor Denmark; the company also is a supplier of Verizon Wireless' IMS network for its LTE buildout, alongside Alcatel-Lucent.

This has been a dismal year for Nokia Siemens from a sales standpoint; the company has seen declines in revenue in each quarter of 2009 compared with 2008. Further, Huawei passed Nokia Siemens as the world's second largest vendor in terms of market share in the third quarter, according to research firm Dell'Oro. As a result, Nokia Siemens in November said it may cut as many as 5,760 jobs as part of a broad restructuring and cost-cutting program.

Suri sought to quell concerns about the company's future, and remained confident that Nokia Siemens would outpace a flat mobile infrastructure market.

"Reports of our death are not only greatly exaggerated, but they are totally false," he said, according to Light Reading. "We are winning where it matters."

For more:
- see this Reuters article
- see this Dow Jones Newswires article (sub. req.)
- see this Light Reading article

WiMAX Forum: 10M WiMAX subscribers worldwide

Sue Marek — Thu, 03 Dec 2009 08:13:14 -0500

FORT LAUDERDALE, Fla.--XJ Wang, marketing director for the WiMAX Forum, said there are now 540 WiMAX network deployments in 146 countries around the world--and more than 150 deployments in the Americas alone--an update intended to show the technology's progress to attendees of the WiMAX Forum Americas 2009 conference here.

Although many of the WiMAX networks are greenfield, such as the Clearwire WiMAX network in the U.S., Wang said 95 WiMAX operators also have cellular networks. "There are GSM operators such as Digicel that operate a WiMAX network too," Wang noted. "WiMAX contributes to the bottom line."

On the subscriber front, Wang said there are now about 10 million WiMAX subscribers worldwide, indicating that the technology is moving from niche to mass market. In addition, he said that there are 165 WiMAX Forum certified products available.

Many of those WiMAX products likely are running on chips from Beceem. The WiMAX chipmaker said it is on track to sell 3 million WiMAX chips in 2009. The company also today launched "4G Turbo" technology, which it said improves the uplink performance of its WiMAX chips.

For more:
- see this press release

FCC proposes USF reform

Phil Goldstein — Wed, 02 Dec 2009 12:07:37 -0500

FCC Chairman Julius Genachowski said the Universal Service Fund, which subsidizes phone service in rural areas and for low-income households, should be reformed and reoriented to help spread broadband access. Additionally, he said established spectrum allocations could be reevaluated as part of a plan to free up more airwaves for mobile broadband. The FCC is considering taking spectrum from broadcasters and using it for mobile broadband--much to the dismay of broadcasters. Article (sub. req.)

Verizon defends LTE at WiMAX confab

Sue Marek — Wed, 02 Dec 2009 12:06:46 -0500

FORT LAUDERDALE, Fla.--Clearly outnumbered by the mobile WiMAX advocates in the audience, Verizon's Chris Neisinger defended his company's choice of LTE for its 4G network technology. During the WiMAX Forum Americas 2009 conference here this morning, Neisinger said Verizon considered deploying mobile WiMAX technology but ultimately selected LTE because the company believes the technology will have a larger ecosystem.

"WiMAX has a lead now because it has deployments, but we think in the longer term the LTE ecosystem will be larger than WiMAX, and will give us global reach and the volumes we need to succeed," Neisinger said.

Neisinger, executive director of networks at Verizon Wireless, participated in a panel discussion with Barry West, president of international for Clearwire (which is building a WiMAX network), and Teressa Kellett, director of 4G for Sprint (which is reselling WiMAX services). During the discussion, Neisinger explained that Verizon has the same view of the market as its WiMAX competitors. "When we look at 4G, we see all the same business opportunities and openness and growth of wireless that the WiMAX group is talking about," he said. "There are similarities. We have the same view of technology, but a different view of the standard."

West said Clearwire's advantage isn't just in its growing WiMAX footprint, but also in its unique spectrum position. West said WiMAX and LTE will perform similarly since they are both based on OFDM technology, but Clearwire's vast spectrum holdings will allow it to stand out from the pack with more competitive price plans such as unlimited data packages.

Neisinger countered that Verizon's network quality and performance will continue to be its key differentiator. "Customers do care about network quality. They do care about coverage. Any network being built today must focus on that. With our spectrum, the amount is important and the frequency is important. We went for 700 MHz spectrum because of the coverage that is required for a nationwide network." Verizon agreed to pay almost $10 billion for 700 MHz C-Block spectrum during the FCC's auction last year.

Clearwire has deployed WiMAX in more than two dozen U.S. markets and plans to cover 120 million POPs by year-end 2010. Verizon, meanwhile, plans to have 100 million POPs covered with LTE by year-end 2010.

Dismissed: AT&T, Verizon quit legal battle over ad claims

Phil Goldstein — Wed, 02 Dec 2009 11:59:16 -0500

All of that for nothing.

AT&T Mobility and Verizon Wireless agreed to have litigation between them over advertising claims dismissed in federal courts in both Georgia and New York, according to legal filings.

The more recent--and high-profile--litigation that was dismissed in Georgia centered on Verizon's "There's a Map For That" advertising campaign, which compares the two companies' 3G network coverage. AT&T argued the ads are misleading because viewers might be led to believe that AT&T does not have any coverage in the white spots on AT&T's map. Last month the judge in that case denied AT&T's request to issue a temporary restraining order that would have forced Verizon to stop showing the ads.

The two companies also dismissed a separate lawsuit filed in July. In that case, submitted to a New York federal court, Verizon asked a judge to determine whether its "America's Most Reliable 3G Network" ads are truthful, a claim AT&T said is misleading. Verizon filed the lawsuit in response to AT&T's claims that Verizon's advertising was false could not be supported.

A Verizon spokesman declined to comment on the dismissal of the case in Georgia. An AT&T spokeswoman declined to comment on the dismissals.

RadioShack rolling out iPhone nationwide next year

Phil Goldstein — Wed, 02 Dec 2009 11:27:17 -0500

RadioShack, which has been ramping up its mobile retailing efforts despite tough competition from the likes of Best Buy and Wal-Mart, said its new branding and strategy efforts appear to be paying off. The company also said it will begin selling Apple's iPhone in its stores nationwide next year, up from 10 stores now.

"The new positioning is getting through to consumers," RadioShack CEO Julian Day told BusinessWeek, which noted the company's improving share price as evidence. In late summer, RadioShack began a new branding effort around "The Shack" tagline, meant to emphasize the company's focus on electronics in general and mobile phones in particular--and to move away from the firm's roots as a radio supplier.

RadioShack recently began taking over Target's mobile retailing efforts, and in late September it added Verizon Wireless products to around 450 Sam's Club kiosks it operates. Day said RadioShack has been ramping up employee training to compete with mobile operations from Best Buy and Wal-Mart.

For more:
- see this BusinessWeek article

Carriers split on support for tethering

Mike Dano — Wed, 02 Dec 2009 11:11:38 -0500

With all of the interest in and emphasis on mobile broadband, I'm somewhat surprised that cell phone tethering remains the niche service it appears to be.

For those who don't know, tethering allows users to tie their laptop to their cell phone and use it as a modem, thereby accessing the Internet via their wireless carrier's network. It's a relatively simple proposition, as long as you're able to configure your computer to recognize your phone as a conduit to the Internet, and I've happily used it on a number of occasions.

However, I suspect I'm in the minority, simply because tethering is a service that gets very little play in Tier 1 carriers' marketing and promotional efforts--which I think is surprising given the recent prominence of USB modems, data cards, dongles, wireless-embedded netbooks and the like. After all, tethering does not require a carrier to subsidize an additional device, and users don't need to carry around an additional gadget in order to connect.

To get a better sense of how the nation's Tier 1 carrier stack up on the issue of tethering, I pinged representatives from Verizon Wireless, AT&T Mobility, Sprint Nextel and T-Mobile USA to see if and how they offer the service. Here's how it breaks down:

Verizon takes perhaps the clearest and most logical approach to tethering. Called "Mobile Broadband Connect," the service is $15 a month when added to a Nationwide Email Plan for smartphones; $30 when added to a data-only plan for smartphones and $49.99 when added to a voice plan and used with a feature phone. The service provides 5 GB per month with 5 cents per MB thereafter. It's available on the vast majority of the carrier's phones, though a Verizon Wireless spokeswoman noted that it may not be immediately available on new devices (such as Motorola's Droid). "Since we can always add it, we don't hold up a (device) launch for this service," wrote Verizon's Brenda Raney.
AT&T offers a similar setup: Tethering is available on a range of devices and generally costs an extra $15 to $30, depending on the plan. However, AT&T's tethering support does not extend to the iPhone. Despite Apple adding tethering capabilities to the iPhone earlier this year, AT&T does not allow iPhoners to use the service. "By its nature, this function could exponentially increase traffic on the network, and we need to ensure that some of our current upgrades are in place before we can deliver the expanded functionality with the excellent performance that customers expect," the carrier said in a statement in September. "We expect to offer tethering in the future."
While AT&T and Verizon each offer relatively straightforward--albeit understated--tethering options, Sprint's approach to tethering appears to have been tripped up by its "Simply Everything" plans. Sprint does offer tethering (dubbed Phone as Modem) for an extra $15 on a variety of devices, including the Palm Pre--as long as users subscribe to one of its Business Advantage, Business Essentials or Talk plans. However, tethering is not available on Sprint's Simply Everything plans, despite CEO Dan Hesse promoting Simply Everything as "removing the barriers for customers to feel free to use all of the features of their phones." When pressed as to why tethering is not offered on Simply Everything plans, Sprint spokeswoman Stephanie Greenwood said: "Strategically, the Phone as Modem attachable and its associated 5 GB total usage limitation does not align with the core unlimited talk, messaging and data benefits of the Simply Everything plan."
And what about T-Mobile, the nation's No. 4 carrier that is in the midst of building out a 3G network? "Please note that T-Mobile does not currently offer or support handset tethering," the carrier wrote in response to questions. "Data plans are intended for Web browsing, messaging, downloading applications and similar activities on your device and are not intended to provide Internet connectivity for computers." But what of T-Mobile users who claim to have tethered to the carrier's network? "At this time T-Mobile has no further comment."

So what does this all mean? I asked Current Analysis analyst William Ho about it, and he said tethering is a difficult service to bill for (particularly for T-Mobile and Sprint, it seems), and carriers prefer to promote mobile broadband offerings like USB modems and netbooks with built-in wireless connectivity. Indeed, a typical monthly mobile broadband plan for a netbook or dongle costs $60 a month, far more than the $15-$30 Verizon, AT&T and Sprint charge for tethering.

Nonetheless, I suspect all of the nation's Tier 1 carriers eventually will be forced to iron out their approaches tethering. After all, what savvy shopper would opt for a $1,440 netbook ($60 per month for service during a two-year contract) over a dramatically cheaper tethering option that can be applied to virtually any computer? --Mike

Motorola remains firm on spinning off handset division

Phil Goldstein — Wed, 02 Dec 2009 11:08:50 -0500

Motorola remains committed to its plan to eventually separate its mobile devices division from the rest of the company, according to co-CEO Greg Brown. The company is exploring the implications for both its intellectual property and the Motorola brand after the split occurs, he said.

Brown, who heads up Motorola's home and networks business as well as its enterprise mobility segment, said the separation remains the "strategy of record." Brown's comments, made at an analyst conference, come a few weeks after rumors first began circulating that the company was considering selling its home and networks business for about $4.5 billion. He did not address the speculation directly, but said the prospects for the company's home and networks division looked strong.

"The brand is very important to both," Brown said, referring to the mobile devices and home and networks divisions.

Analysts were perplexed on speculation that Motorola might be shopping its home and networks business, noting that it might be too soon to consider such a move since Motorola's mobile devices business, which has bet heavily on Google's Android platform, has not yet recovered its footing.

Motorola for more than a year has voiced the possibility of spinning off its handset business. Motorola co-CEO Sanjay Jha, who runs the handset division, said a spin off would be timed on the business' performance and the overall economic environment.

Motorola has two Android phones on the market--the Droid from Verizon Wireless and the Cliq from T-Mobile USA--but plans to release at least 20 smartphones next year, most running on Android.

For more:
- see this Dow Jones Newswires article (sub. req.)
- see this Reuters article

Nokia expects handset market to grow 10% in 2010

Phil Goldstein — Wed, 02 Dec 2009 10:45:38 -0500

Nokia laid outs its vision and goals for 2010 at its investor day in Finland, and said that while it expects its own market share to be flat next year, the overall handset market will grow by 10 percent.

The company, the world's largest handset maker, also reiterated its commitment to the Symbian platform as its main smartphone operating system, and said it will improve the user interface on Symbian. Nokia also promised to deliver a "major product milestone" before mid-year in 2010, and another one by the end of 2010, though it didn't provide details. The handset maker also said it will release its first device powered by Maemo 6, with an "iconic" user experience, in the second half of next year. Nokia just weeks ago began selling its first Maemo 5 device, the N900.

Nokia, which posted an $834 million loss in the third quarter, has struggled to grow its market share amid increasingly intense competition from the likes of Apple, Research In Motion and other leading smartphone vendors. Nokia's global handset market share stood at 38 percent in the third quarter, unchanged from the second quarter or the year-ago period. Nokia's handset business stagnated in the quarter, and its global smartphone market share fell from 41 percent a year ago to 35 percent. Nokia shipped 108.5 million units in the quarter, up sequentially but down 8 percent from the 117.8 million it shipped in the year-ago quarter.

The company said it expects operating margins at its devices and services business of between 12 percent and 14 percent next year, compared with 11.4 percent in the third quarter, but down from 18.6 percent in the third quarter of 2008.

"Overall, we believe consensus forecasts don't change much on this, but it is slightly disappointing that Nokia have not set the bar higher on margins," UBS analyst Maynard Um wrote in a research note.

As for Nokia's infrastructure joint venture with Germany's Siemens, Nokia Siemens Networks, Nokia said that it expects a flat mobile and fixed infrastructure market in euro terms in 2010, compared with 2009. However, the company expects Nokia Siemens to grow faster than the market next year.

For more:
- see this release
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this Dow Jones Newswires article (sub. req.)

On touchscreens, Swype slides toward mass market

Phil Goldstein — Tue, 01 Dec 2009 12:11:54 -0500

With more and more phones sporting touchscreen displays, startup Swype is looking to fundamentally shift how users input text on phones that don't have physical keyboards. The company's technology, which is on the Samsung Omnia II through Verizon Wireless, allows users to type text on virtual keyboards by tracing letters they want without lifting their finger off of the keyboard. The company wants to take the technology to the mass market. Article

AT&T, Verizon at opposite ends of Consumer Reports survey

Phil Goldstein — Tue, 01 Dec 2009 12:03:04 -0500

AT&T Mobility ranked lowest in wireless customer satisfaction in 19 of 26 cities surveyed by Consumer Reports, marking another blow to the carrier's image. Further, AT&T's chief wireless rival Verizon Wireless ranked highest in all of the 26 markets.

Respondents knocked AT&T service in New York and San Francisco--where subscribers, particularly of the iPhone variety, have previously complained--as well as in Atlanta, Cleveland Houston and other areas. The publication surveyed 50,000 readers in 26 U.S. cities.

"Apple's iPhones are the top smart phones in our ratings--actually, among the best of all phones we tested, period--but their exclusive carrier, AT&T, was middling at best in satisfaction," Consumer Reports said. "If you're readying to buy Apple's phone, prepare for possible disappointment with its service and expect to love the phone anyway."

Pali Research analyst Walter Piecyk wrote in a research note that it is becoming a "familiar juxtaposition" for Verizon and AT&T to be on opposite ends of the satisfaction spectrum. "While we recognize the shortcomings of each of these surveys individually, we believe the consistency of AT&T's ranking and the numerous press reports cataloging its network problems present a looming problem for a company that we believe has become over-leveraged to the iPhone," he said, noting AT&T replaced Sprint Nextel at the bottom of this year's Consumer Reports survey.

AT&T sought to cast a rosy glow over the survey dust-up. "We appreciate and value all customer feedback," the company said in a statement to the Wall Street Journal's AllThingsD blog. "We learn from it and it helps us serve our customers better. Without question the surest indication of customer satisfaction is churn, or turnover. For the last quarter, our postpaid churn was just 1.17 percent."

AT&T has previously acknowledged difficulties in meeting the data demands of iPhone users. In response, it has begun upgrading its network to HSPA 7.2 technology; by the end of 2010, AT&T has promised to offer the HSPA upgrade in 25 of the country's 30 largest markets.

For more:
- see this Pali Research post (sub. req.)
- see this AllThingsD blog post

Claiming collusion, Nokia sues LCD makers

Phil Goldstein — Tue, 01 Dec 2009 11:19:08 -0500

Nokia sued a number of LCD manufacturers, including Samsung Electronics and LG Display, alleging the companies colluded to fix LCD prices during a period of around 11 years. The suit comes on the heels of a similar one AT&T filed in October.

Overall, Nokia filed suit against 11 companies, alleging they raised "the price of LCDs above the price that would have prevailed in a competitive market" from at least Jan. 1, 1996 through Dec. 11, 2006. Nokia used the LCDs in its mobile phones. The lawsuit, filed in federal court in San Francisco, also said Nokia "suffered damages as a result ... and is entitled to treble damages and injunctive relief to remedy these injuries."

AT&T's suit, filed in the same court and against many of the same companies, also alleged the LCD makers engaged in price fixing for displays for mobile phones. Both of the lawsuits cite a U.S. Department of Justice investigation into LCD price fixing. In 2008, Chunghwa Picture Tubes, LG Display and Sharp--which were named in Nokia's suit--plead guilty to U.S. charges of price fixing and agreed to pay $585 million in criminal fines.

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

Verizon's marketing muscle powering Droid sales

Phil Goldstein — Tue, 01 Dec 2009 11:00:40 -0500

Verizon Wireless and Motorola have reportedly poured $100 million into their marketing campaign for the Droid phone, one of Verizon's two smartphones running Google's Android platform--and the efforts likely will lead to 1 million Droid sales by year-end, according to at least one analyst.

RBC Capital analyst Mark Sue wrote in a research note that since the Droid's official launch Nov. 6 the companies have probably sold between 700,000 and 800,000 units. The companies have not released any official sales figures yet for the device, which is the first to run on Android 2.0 software.

"Verizon's big marketing push for the Droid is strengthening as we close in on the holidays, and following our round of checks, we believe about 700,000 to 800,000 Droids have been sold, making our hurdle of 1 [million] Motorola Droids achievable for 4Q09 [ending December 31]," Sue wrote. "Motorola, for its part, has done a good job on the production side, and our survey of over 100 stores indicates strong demand, limited stock outs, and very few returns."

Verizon began marketing the Droid weeks before its launch, and has continued with a series of TV advertisements as well as with billboards in locations across the country (including Times Square in New York City). Many of the ads compare the device with AT&T Mobility's successful iPhone.

On first unveiling the Droid in October, Verizon said it would put more marketing money behind it than any device it had previously offered.

For more:
- see this CNET article
- see this Barron's blog post

Clearwire CEO promises WiMAX handsets by Christmas 2010

Phil Goldstein — Tue, 01 Dec 2009 10:44:20 -0500

Clearwire launched retail services for its mobile WiMAX play in a handful of new markets, and CEO Bill Morrow reiterated hopes that the company might expand its roster of wholesale partners. Additionally, Morrow promised WiMAX smartphones by Christmas of 2010.

Clearwire rolled out retail services in Chicago, the Seattle metro area, Honolulu and Maui as well as markets in North Carolina and Texas--markets in which the company had previously announced services. More importantly though, Morrow said Clearwire--which just received $920 million in new debt financing--could ink deals with new resellers. Sprint Nextel, Comcast and Time Warner Cable currently offer WiMAX services through partnerships with Clearwire.

"We are talking to all of them," Morrow said in an interview with mocoNews. "We are talking to carriers, cable operators, phone [landline] companies and satellite. We welcome everyone on ... It's good for Clearwire." During Clearwire's third quarter earnings conference call, Morrow said that the company is "ramping up our systems to be able to support even more wholesale customers."

Morrow also addressed one of the big hurdles Clearwire faces in achieving mass market success: the relative dearth of compelling devices. He acknowledged the company currently is focused on laptops and data cards, but noted it will add WiMAX-capable smartphones in the second half of next year. "I wouldn't count on it by summer, but before Christmas," he said.

The comments echo those made by Sprint Nextel CEO Dan Hesse, who told FierceWireless in October that Sprint, which owns a majority take in Clearwire and is a wholesale partner of the company, would launch dual-mode 3G/4G phones next year.

So what does the future hold for Clearwire? Pike & Fischer predicted the company stands to grow its WiMAX customer base in the U.S. to roughly 600,000 by the end of 2010, and will generate revenues of up to $580 million.

For more:
- see this Chicago Tribune article
- see this mocoNews article
- see this MarketWatch article
- see this Pike & Fischer release

PayPal: Mobile payments jumped 650% on Black Friday

Phil Goldstein — Mon, 30 Nov 2009 12:02:53 -0500

The number of payments made via mobile jumped sharply on Black Friday, according to PayPal. The increase apparently was due to the growing number of smartphones and retailers' efforts to make mobile payments easier. Mobile online payments through PayPal were up nearly 650 percent year-over-year, the company said. Article

AT&T launches 1 GHz LG smartphone

Phil Goldstein — Mon, 30 Nov 2009 11:57:19 -0500

AT&T Mobility launched a new LG smartphone it is touting as the nation's first to sport a 1 GHz Qualcomm Snapdragon processor, which powers the phone's computing functions. Most of today's smartphones feature processors in the range of 600 MHz. The device, called the eXpo, also supports an optional, integrated pico projector and has a fingerprint sensor, features intended for enterprise users.

The phone, which runs Windows Mobile 6.5, supports HSPA 7.2 network technology. AT&T is in the process of deploying the HSPA speed upgrade and plans to roll it out in 25 of the country's 30 largest markets by the end of 2010. In its third quarter earnings report, AT&T said it plans to have six HSPA 7.2-compatible devices, including the iPhone 3GS, as well as two new LaptopConnect cards in its device portfolio by year-end.

The LG pico projector, which will be available in the next few weeks for $179.99, snaps onto the back of the phone and can project images as far as eight feet. AT&T said the phone's "Smart Sensor" fingerprint technology will provide added security and will help with text editing, touchscreen navigation and scrolling.

The eXpo features a 3.2-inch touchscreen display, full Qwerty keyboard, 5-megapixel camera and support for up to 16 GB removable microSD cards. The phone will be available Dec. 7 for $199.99 with a two-year contract and after a $100 mail-in rebate.

For more:
- see this release

Related Articles:
AT&T activates 3.2M iPhones in Q3, hints at end to exclusivity
AT&T activates 2.4M iPhones in Q2
AT&T adds 1.2M subs, sees wireless data revenue surge

Analyst: Motorola Cliq sales slipping

Phil Goldstein — Mon, 30 Nov 2009 11:41:32 -0500

Sales of the Android-powered Motorola Cliq, which is being exclusively offered through T-Mobile USA, are falling short of expectations, according to a research note from Oppenheimer analyst Ittai Kidron.

Kidron said sales of Motorola's second phone based on Google's Android platform, the Droid, were in line with expectations, but that the Cliq was suffering because of issues with battery life. He said Motorola is preparing a software patch to fix the problem, but that T-Mobile has lost interest in the device, thus contributing to a drop in sales.

Despite the shortfall, Kidron said it should not cause Motorola to miss its earnings target for the fourth quarter. "Competitive pressures will rise, but overall we believe the company is on the right track to 2010 year-end profitability," he said.

T-Mobile spokeswoman Alexandra Trask disputed the suggestion that Cliq sales were falling behind sales targets. Though she declined to provide specific sales figures, Trask told FierceWireless that sales have been positive. She also confirmed that there would soon be an over-the-air update for the Cliq, but did not say what it would be for; additionally, she said the Cliq's battery life has performed at expected levels.

Trask also took issue with the suggestion that T-Mobile has somehow decreased its support for the Cliq. "That couldn't be farther from the truth. This is a device we're really excited about for the holiday season," she said. " It's very prominently featured in our stores. We're doing a lot from a marketing perspective and merchandising perspective."

Verizon Wireless, Motorola's partner on the Droid and the nation's largest wireless carrier, has put its marketing muscle behind the phone, one of two Android devices in its lineup (the other is the HTC Droid Eris). T-Mobile has four Android phones, including the Cliq, and has a major campaign focusing on the HTC-built myTouch 3G. The Cliq sells for $199.99 with a two-year contract.

"I think the different experiences on the devices help differentiate them," Trask said, referring to T-Mobile's Android phones. "We don't give them less love just because there's more of them."

Motorola plans to release at least 20 smartphones next year, most running on Android.

For more:
- see this AP article

Sprint drops Qualcomm's QChat

Phil Goldstein — Mon, 30 Nov 2009 11:16:49 -0500

Sprint Nextel said it will no longer offer new devices running Qualcomm's QChat technology, and will instead refocus on push-to-talk phones operating on its iDEN network.

Sprint spokesman Scott Sloat told FierceWireless the move stems from the carrier's announcement last year that it would keep and reinvigorate its iDEN network. The carrier has since launched new iDEN devices and services and improved the network's quality.

"As a result of this progress, Sprint is committed to continuing to offer innovative push-to-talk products and services on the gold standard iDEN network," he said. "Sprint will continue to support its existing QChat customer base to ensure their needs are met. However, at this time there are no new QChat handsets on the product development roadmap."

Sprint first launched QChat devices in 2008, a move that allowed it to offer push-to-talk services over its EV-DO Rev. A network. The Qchat phones included a range of new features, including a repeating alert and group chat function that connected up to 20 users at once.

Qualcomm said in a statement that it continues to support Sprint's QChat customers and is also working to expand its QChat business domestically and internationally to work with "multiple 3G operators moving forward."

"Qualcomm continues to innovate and invest in QChat, an air interface agnostic platform currently optimized for both WCDMA and EV-DO Rev. A," Vishal Gupta, Qualcomm's vice president of North American sales, said in a statement. "We expect to launch QChat internationally in the coming year but cannot yet disclose which operators."

For more:
- see this PhoneNews.com post

Article updated Nov. 30 to add comment from Qualcomm.

Samsung says it will beat 2009 handset target

Phil Goldstein — Mon, 30 Nov 2009 10:55:52 -0500

Samsung said it will likely beat its 2009 handset shipment forecast of 200 million units, partly based on stronger sales of touchscreen devices.

The company, which sold 197 million phones last year, did not provide a new sales target. Samsung, the world's second largest handset maker by volume after Nokia, said it sold 40 million touchscreen devices this year through the end of November, up from 10 million in 2008. For the full year, the company said it expects touchscreen devices to make up 20 percent of its total handset sales, up from 5 percent last year.

The global handset market has contracted for much of the year, making Samsung's announcement surprising. However, Samsung shipped 60.2 million handsets in the third quarter, a new record for the company. 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.

Indeed, research firm Strategy Analytics appeared to telegraph Samsung's position following Samsung's third-quarter earnings report. "Samsung's marketshare is at its highest level ever, surpassing the psychologically important 20 percent mark," the firm wrote in October. "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. The key to Samsung's growth has been an attractive portfolio of touchphones and an expanding retail presence across multiple regions."

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

Report: Nokia planning only one Maemo phone next year

Phil Goldstein — Mon, 30 Nov 2009 10:43:08 -0500

Nokia will release only one smartphone based on the Maemo software platform, according to a Reuters report citing an unnamed source. This report appears to dash recent speculation that the world's largest cell phone maker plans to transition from Symbian to Maemo for its high-end smartphones.

Nokia began selling its first Maemo phone, the N900, earlier this month. Shortly after the release of the device, rumors surfaced indicating the company would stop using the Symbian platform by 2012 in its entire N-Series line of devices in favor of Maemo. At the time, Nokia said it remained committed to Symbian as its smartphone platform of choice, a statement it reiterated today.

Nokia declined to comment about its future device roadmap.

In other Nokia news, the company clarified comments made by its marketing chief indicating Nokia might consider selling its handset manufacturing business. Anssi Vanjoki, in an interview with the German magazine Wirtschaftswoche, said the handset maker is turning its focus to mobile solutions and applications. He said Nokia's device manufacturing business gives it a distinct advantage, but hinted the company remains open to the possibility of a sale of the business.

A Nokia spokesman told Reuters that Nokia's logistics and manufacturing business is "a very important competitive advantage for us, and (is) a core part of our business. We have no plans to change our business model."

For more:
- see this Reuters article about Maemo
- see this Reuters article

Jarich: Why I don't have a femtocell – page 2

Peter Jarich — Mon, 30 Nov 2009 10:40:56 -0500

Cheap Voice: Inexpensive voice services are not an inherent feature of femtocells. Instead, femtocells allow operators to incent adoption by offering cheaper voice--unlimited calling from home, for example, for a minimal up-charge. With or without femtos, however, voice services have already become relatively inexpensive. Take the U.S. as an example. Putting aside the plethora of plans with free mobile-to-mobile, night and weekend minutes, there is a wide array of unlimited voice plans at, or under, $50 a month.
Enterprise Confusion: Last year, the concept of femtocells in the enterprise began to heat up. This year, it's still hot--evidenced by news out of Airvana, Percello and picoChip... not to mention the emergence of SpiderCloud out of stealth mode. For vendors, the enterprise femtocell opportunity may look particularly attractive given the relative price insensitivity (compared to consumers) and the ability of an enterprise to spell out a femtocell's ROI. Yet, pushing femtocells into the enterprise will require two things that generally haven't happened. First, more operators will need to follow Orange's lead and develop plans for penetrating the enterprise with femtos... not just wait for the enterprise to come to them. Second, vendors and operators will need to agree on (discover?) the right architecture for enterprise femtocell launches, whittling down today's array that runs from standalone high-capacity devices (think picocell) to proprietary femtocell grids or meshes to WiFi-like enterprise gateway models.
Marketing: In the last bullet, one phrase was more important than any other: "not just wait for the enterprise to come to them." Marketing is critical to the success of any new service or technology. In some cases marketing is viral. In others it's led by the operator or vendor. In the femtocell space, it is largely absent--particularly when compared against the $100 million budgets for marketing a new mobile device. If I weren't in the telecom industry, I wouldn't likely know about the femtocell offers available to me. Stories of U.K. colleagues complaining to Vodafone about less than stellar coverage but not being "sold" a femtocell suggest that limited marketing isn't an isolated problem.
Paying Twice: If femtocell marketing has been stunted, there is a good reason. The value proposition is a difficult one to explain to end-users. Operators routinely advertise the speed and reach of their networks--knowing that speed and reach (and devices) sell services. Explaining, then, that a femtocell can help deliver on the promises the operator has already been making gives an impression that the user is paying extra for something they already thought they were getting.

Okay, at this point, it might be easy to see why the audience of femtocell suppliers and service providers came away from the presentation a little dejected.

The larger message, however, was that against this backdrop of end-user thinking, operators and vendors need to begin thinking about femtocells differently. I have no doubt that femtocells are in an operator's best interest as a strategy for keeping radio access network CapEx and OpEx in check from both a coverage and capacity perspective. I have no doubt that subscribers in tough-to-reach locations may find femtocells of immediate value today--I have friends that fall into this camp. Operator interests alone, however, will not sell femtocells to end-users and the number of users who are coverage-constrained and tech-savvy enough to seek out a femtocell isn't big enough to support a thriving industry.

Peter Jarich is an analyst with Current Analysis.

Jarich: Why I don't have a femtocell

Peter Jarich — Mon, 30 Nov 2009 10:38:21 -0500

I spent part of last week in San Diego at Avren's Femtocell Americas conference. It wasn't difficult to convince me to hang out at the Hotel Del Coronado for a few days and--as anyone who follows me on Twitter (@pnjarich) already knows--the sessions and speakers provided lots of solid insights and a great recap of where the femtocell industry stands as it starts to put the wraps on another year. Likewise, as in years past, there was the obligatory contrarian presentation leaving everyone a little depressed and/or defensive.

Little did I know going into the conference that I'd be the one giving that presentation.

To be clear, the title of my presentation was "Why I Still Don't Have a Femtocell" and the point was simply to provide an anecdotal view into one user's reasons for not having a femtocell. If you're looking for a copy of the slides, you can find them at slideshare.net. It was not meant to be an indictment of the femtocell value proposition but after 30 minutes of explaining why I haven't pulled the trigger on a small base station, it's easy to understand how that message was lost on the audience.

Regardless, the main points on why today's femtocell value proposition is limited for many users (myself included) were easily digestible.

Nascent Offers: Announced on November 16th, the Femto Forum's market status report provides an overview of the industry's first commercial femtocell launches. Three of the eight are in the U.S.: AT&T Mobility, Sprint Nextel, and Verizon Wireless. None of these three, however, are mature. Sprint and Verizon Wireless are still limited to 2G (CDMA2000 1X) services. AT&T has only launched services in a handful of markets. Going forward, AT&T will, doubtless, "go national" with its services next year and Sprint as well as Verizon Wireless are planning on dual-mode (2G/3G) femto launches. Until then, the options aren't good for your average U.S. user.
Coverage: Most of these early femtocell launches have targeted coverage as the problem they're aiming to solve. This is understandable: coverage continues to be a problem for users around the globe and a key driver of service satisfaction. Coverage, however, isn't necessarily a critical issue for your average user. Why? The sprawling nature of the U.S. may lead to coverage gaps, but in densely populated areas (including most of the places where people live) major coverage problems have largely been solved. Likewise, if a user is free to pick their service provider from various options, it's logical that coverage at home will be a prime buying criterion.
Capacity: As with coverage, the argument for capacity driving femtocell deployments is easy to understand. A combination of new mobile broadband networks and increasingly advanced mobile devices has led to an unprecedented surge in mobile data traffic. If the trend continues, operators are looking at a future where they can no longer economically support this traffic growth. Femtocells, then, can offload some of this traffic, ensuring a solid user experience for users whether they're indoors (on the femto) or outdoors (where the macro network is suddenly less burdened). Unfortunately, this doesn't explain how capacity will drive femtocell purchase decisions. On the contrary, most of today's advanced devices are smartphones, many of which can enjoy a capacity boost thanks to embedded WiFi. At the same time, many of today's most popular mobile applications (Twitter, Facebook, Myspace) don't require tons of bandwidth. Going forward, the proliferation of streaming multimedia applications and the continued lack of WiFi in featurephones will be a problem for operators. Using this as a message to sell femtocells is a tough proposition...Continued

Huawei becoming bigger threat to established infrastructure vendors

Lynnette Luna — Mon, 30 Nov 2009 01:41:09 -0500

Major infrastructure vendors have been watching Huawei over their shoulders for a few years now, and soon they could be watching its backside as the Chinese vendor steals some big contracts historically reserved for the likes of Alcatel-Lucent, Ericsson, Nokia Siemens Networks and Motorola.

Huawei swooped in and took a massive six-year contract with Norway's Telenor in Ericsson and NSN's backyard earlier this month. The deal calls for Telenor's existing Ericsson and NSN network equipment to be merged into the new infrastructure provided by Huawei. The contract will see the delivery of equipment across technology generations and frequency bands, as well as base stations for 2G, UMTS and LTE.

Likewise, Belgacom has chosen Huawei to upgrade its mobile network. The deal calls for Huawei to integrate its GSM, HSPA and LTE systems in the future to a converged RAN, displacing NSN.

In Greece, Vodafone has gone live with a Huawei-based HSPA+ upgrade to its network, offering a peak download rate of 28.8 Mbps and upload rate of up to 5.8 Mbps. HSPA+ MIMO mobile broadband services initially will be provided in selected areas of capital Athens, and then expanded to other cities.

Huawei now supplies 36 of the world's top 50 mobile operators. Its customers in the U.S. include Leap Wireless, Clearwire and Cox Communications.

Interestingly, Huawei isn't severely undercutting the competition in its bids, according to an article in The New York Times this weekend. Rather, it is using products such as the SingleRAN platform and its unified packet core to collapse 2G, 3G and eventually LTE networks to provide a value proposition that involves lowering an operator's total cost of ownership. That's an enticing proposition in a world that will see operators managing three generations of networks.

Huawei's competitors have always pooh poohed the vendor as being one of those fly-by-night companies that severely undercuts the competition but offers little in the way of quality. Obviously, that perception is quickly changing among operators. Moreover, competing vendors' efforts to discredit the private company by questioning its business practices and ties with the Chinese military don't seem to resonate with operators. Telenor said it studied Huawei's private ownership, but in the end decided it wasn't a factor in the award.

The grab for LTE contracts has only just begun. When it comes to the battle for these contracts, incumbency has been thrown out the window. It's a new slate that allows every vendor to compete for business. NSN already is reeling from weaker sales and a declining market share. Could Huawei push it over the edge?

Motorola may have the right strategy when it comes to LTE. In the midst of fierce competition, the vendor is only going after contracts it believes it has a higher chance of winning.

"We are not trying to go head to head in every part of the globe. We've been selective in our engagements, focusing on the customers that we think we have a higher advantage with," Bruce Brda, senior vice president and general manager with Motorola's wireless networks business, said in a recent interview. "Our initial thrust is in places in Asia where we have a significant competitive advantage." That's why it won an LTE contract with Japan's KDDI, he said, despite the fact it competed against 10 vendors.

Motorola also is focusing heavily on TD-LTE, which could give it an edge in winning contracts in Huawei's backyard. China Mobile is particularly keen on deploying TD-LTE.

It may be time for some vendors, in particularly NSN, to begin taking similar approaches rather than attempting to conquer the world. --Lynnette

Nokia, Infineon partnering on LTE solutions

Phil Goldstein — Wed, 25 Nov 2009 10:48:16 -0500

Nokia and chip maker Infineon said they will work together on LTE solutions so that Nokia's future modem technology works with Infineon's transceiver chips. The partnership strengthens an established relationship--Infineon already supplies Nokia with chips--and moves Infineon one step closer to providing chipsets for Nokia's next generation of mobile data devices. The partnership also comes as competition in the next-generation chipset market heats up; earlier this month, Qualcomm said device vendors had begun sampling its dual-carrier HSPA+ chips and multi-mode 3G/LTE chips. Article

Clearwire raises an additional $920M in financing

Phil Goldstein — Wed, 25 Nov 2009 10:24:36 -0500

Clearwire said that it raised, through a subsidiary, an additional $920 million in debt financing, giving it another financial lift as it seeks to continue aggressively building out its mobile WiMAX network.

The new debt financing, through a pricing of 12 percent secured notes due in 2015, means that the company has raised a total of around $2.8 billion through debt and equity financing during the past few weeks. In addition to the $920 million, Clearwire confirmed earlier this month it will raise around $1.56 billion in new equity financing from strategic investors, including Sprint Nextel. The company also recently had a debt offering of $1.85 billion in senior notes, which was used to pay off an existing $1.4 billion credit facility.

Earlier this year, the company said it needed between $2 billion and $2.3 billion to carry out its plan of having 120 million POPs covered under its mobile WiMAX network by the end of 2010.

"With this latest tranche of additional funding, we have not only exceeded the amount of capital that we have previously stated we needed to fully fund our business plan, but we have also secured additional capital that will allow us to expand more aggressively by covering more people, and with more capacity than we had previously planned," Clearwire CEO Bill Morrow said in a statement.

Clearwire's stock was up almost 6 percent on the news, to around $6 per share.

In the third quarter, Clearwire posted a loss of $82.42 million, wider than the loss of $72.7 million in the year-ago quarter. Revenue rose 13 percent to $68.8 million in the quarter.

For more:
- see this release
- see this Reuters article

Ericsson nabs Nortel's North American GSM business for $70M

Phil Goldstein — Wed, 25 Nov 2009 09:54:44 -0500

Ericsson was the winning bidder for bankrupt Nortel Networks' North American GSM business, further fortifying its position in the North American mobile equipment market. Ericsson's $70 million bid for Nortel's North American GSM unit comes in the wake of its acquisition of Nortel's CDMA and LTE assets for $1.13 billion.

Another company, Austrian firm Kapsch CarrierCom, will pay $33 million for Nortel's GSM assets in Europe and Taiwan, and also will purchase Nortel's GSM-R business, which makes technology used on railways.

Through the deal, Ericsson gains AT&T Mobility and T-Mobile USA as customers and roughly 350 employees from Nortel. Nortel's North American GSM operations generated around $400 million in 2008, Ericsson said. Ericsson said it expects the acquisition to have a positive impact on its earnings within a year of the deal's close, but it's unclear how significant of an impact it will be.

The sale of the the GSM units is the latest in Nortel's breakup. Earlier this week, Ciena emerged as the winning bidder for Nortel's Metro Ethernet Networks and optical divisions, with a winning bid of $769 million.

For more:
- see this Ericsson release
- see this Nortel release

Palm on the hunt for users' missing webOS backups

Mike Dano — Wed, 25 Nov 2009 09:54:37 -0500

Palm and Sprint Nextel are embroiled in a cloud computing glitch that is causing major problems for users who are trying to move their backed-up content from one webOS-based device to another. The news comes just weeks after T-Mobile USA and Microsoft disclosed similar, cloud computing-based problems affecting Sidekick users.

The issue apparently stems from the automatic backup function offered by Palm called Palm Profile. The service remotely saves contact, calendar, task, memo and other information stored on users' webOS devices, allowing them to move the information to a new device--by logging into their Palm Profile--if their phone is lost or stolen. However, according to various user forums and news reports, some users moving from one device to another have been unable to access large amounts of their backed-up information.

"We are seeing a small number of customers who have experienced issues transferring their Palm Profile information to another Palm webOS device," Palm said in a statement. "Palm and Sprint are working closely together to support these customers to successfully transfer their information to the new device."

Palm, which sells the Pre and Pixi webOS devices, did not provide any additional information.

The situation is another reminder of the potential pitfalls in offering cloud-based services. Such services remotely store users' information for quick retrieval over the Internet, but can fall prey to computer troubles. Indeed, T-Mobile earlier this month resumed sales of its Sidekick devices a little more than a month after a Microsoft server glitch caused some Sidekick users to lose their personal data. Microsoft was able to restore many users' data, but the entire event was a black eye for Microsoft and T-Mobile.

For more:
- see this IDG News Service article
- see this Wired post

Thanksgiving holiday

Phil Goldstein — Wed, 25 Nov 2009 08:56:12 -0500

It's that time of the year again--time for turkey, stuffing, the Lions playing football and incredibly great mobile phone deals on Black Friday. FierceWireless will not be publishing Thursday or Friday due to the Thanksgiving holiday. We will be back in your inbox next Monday. Have a happy Thanksgiving! --Phil

Sprint completes Virgin Mobile acquisition

Phil Goldstein — Tue, 24 Nov 2009 16:31:52 -0500

Sprint Nextel said it completed its $483 million deal to acquire Virgin Mobile USA, a move that will double its bet on prepaid wireless--one of the few growth engines this year in the wireless operator.

The deal had been expected to close in the fourth quarter. Under the transaction, Virgin Mobile shareholders will own around 3 percent of Sprint. Virgin Mobile CEO Dan Schulman will lead Sprint's prepaid business, and will be responsible for the prepaid segment's growth and business strategy. Matt Carter will continue to run Sprint's prepaid Boost Mobile brand and will report to Schulman.

One challenge for Sprint will be juggling the Virgin brand with Boost, which shook up the wireless market earlier this year with the introduction of its $50 monthly unlimited plan. Sprint, which has been losing postpaid subscribers at a steady clip this year, also will have to try and turn around Virgin's business, which has been struggling itself with subscriber losses and high churn rates.

As Sprint integrates Virgin Mobile's operations into its own, the company will be able to use its larger scale and position in the market to exert leverage over phone choices and deals with vendors. However, its chief challenge may be maintaining its strong prepaid business, which has been a crutch in the face of Sprint's continued postpaid subscriber losses.

For more
- see this release
- see this AP article
- see this Dow Jones Newswires article (sub. req.)

Related Articles:
Sprint faced bidding war with unnamed company for Virgin Mobile
FTC approves Sprint-Virgin deal
Class action claims Virgin Mobile undervalued in Sprint deal
Virgin Mobile's profit surges, but subscriber losses continue
Sprint buying Virgin Mobile USA for $483M

It's Verizon vs. Sprint over 'most dependable' network claim

Phil Goldstein — Tue, 24 Nov 2009 16:12:33 -0500

A national advertising group has recommended Sprint pull its "most dependable 3G network" advertising following a complaint on the topic by Verizon Wireless. The squabble comes on the heels of a battle between Verizon and AT&T Mobility over similar advertising claims.

The National Advertising Division of the Council of Better Business Bureaus recommended that Sprint pull the "most dependable" ad. The NAD said that it looked at the most recent Nielsen drive test data and concluded that Verizon had fewer dropped calls and performed better in terms of session reliability than Sprint.

Sprint spokesman Matthew Sullivan said the company is standing by its claim, and would appeal the NAD decision to the National Advertising Review Board. He said the NAD did not use signal strength information in its decision, which he said is "the most effective criteria for determining indoor use."

"We're confident that our claim is well supported," he told FierceWireless. "And we're confident in the appeals process."

In its ads, Sprint notes its ad claim is "based on independent, third-party drive tests for 3G data connection success, session reliability and signal strength for the top 50 most populous markets from January 2008 to May 2009."

A Verizon spokesman declined to comment.

The disagreement is notable in light of an increasingly contentious advertising battle between AT&T and Verizon, which Verizon kicked off with a series of ads attacking AT&T's 3G coverage area.

For more:
- see this AP article

Nokia's new phones unveiled amid job cuts

Mike Dano — Tue, 24 Nov 2009 12:00:24 -0500

Nokia today introduced two new slider phones, to be available in the first quarter of next year, that both include frequency bands for the North American market. A Nokia representative declined to provide further details on the phones, including whether they would be sold through a U.S. carrier.

The news comes on the heels of Nokia's further efforts to slim down its global handset portfolio in a bid to focus on fewer, flashier phones. The company last week announced it would cut 330 research and development jobs at sites in Finland and Denmark, and today Nokia expanded that action to include 220 R&D employees in Japan (or roughly 1 percent of Nokia's global R&D personnel). Nokia said the move was made to "align its research and development operations to be in line with its focused portfolio of future products"--meaning the company plans to develop fewer phone models.

As for Nokia's new phones, both gadgets offer an FM radio, connections to Nokia's Ovi services and support for WCDMA 850/1900/2100 MHz networks. The 6700 features the Symbian operating system, a 5-megapixel camera, an aluminum frame and a 2.2-inch screen, while the 7230 features a 3.2-megapixel camera, Nokia's Series 40 operating system and a 2.4-inch screen. The 6700 is to go for around $240, while the 7230 is to sell for around $150--both before taxes and possible subsidies.

For more:
- see this release on the R&D positions
- see this release on the new phones
- see these pictures and specs

Pictures and specs: Nokia's 6700 and 7230

Mike Dano — Tue, 24 Nov 2009 11:46:49 -0500

Nokia unveiled two new slider phones, the 6700 and the 7230. Click here for pictures and specifications.

<--Back to the story

T-Mobile, HTC break out Black Friday deals

Phil Goldstein — Tue, 24 Nov 2009 11:30:42 -0500

Ahead of the holiday shopping season and Black Friday, T-Mobile USA and HTC are offering customers deals on certain smartphones. T-Mobile said this weekend (Nov. 27-29), customers will be able to get $50 off the Motorola Cliq, Research In Motion's BlackBerry Bold 9700 and the Samsung Highlight. Additionally, HTC said from Nov. 27 through Dec. 31, customers who upgrades their eligible smartpone and purchases the HTC Tilt 2, Touch Pro 2, Imagio or Ozone will be able to get a $100 mail-in rebate from HTC directly. Article

Motorola, RIM targeted in visual voicemail lawsuit

Phil Goldstein — Tue, 24 Nov 2009 11:17:54 -0500

Klausner Technologies, a patent licensing firm that has targeted numerous companies in the wireless industry, filed a lawsuit against Motorola and Research In Motion for violating its visual voicemail patents.

In the past, Klausner has filed suits against Apple, LG Electronics, Cox Communications, Verizon and others. Apple, AT&T, Sprint Nextel and Verizon are among 24 companies that currently license visual voicemail technology from Klausner.

The latest suits were filed in federal court in the Eastern District of Texas. The lawsuits claim that Motorola's first Android-powered phone, the Cliq, and RIM's new BlackBerry Bold 9700 violate Klausner's patents.

Visual voicemail lets users see their messages and decide which ones to respond to. Klausner grabbed the attention of the wireless world back in late 2007, when the company filed suit against Apple and six other companies for $360 million.

Representatives from Motorola and RIM declined to comment on the lawsuit.

For more:
- see this Reuters article
- see this IDG News Service article

EU regulators close Qualcomm antitrust probe

Phil Goldstein — Tue, 24 Nov 2009 11:01:15 -0500

Regulators from the European Union shut down a four-year antitrust probe into Qualcomm's WCDMA licensing practices. The regulators at the European Commission, the EU's regulatory arm, said the companies that had lodged complaints against Qualcomm for charging excessive royalties on patents had withdrawn their complaints.

In closing the investigation, the EU did not charge Qualcomm with a fine or clear the chip maker of wrongdoing.

"All complainants have now withdrawn or indicated their intention to withdraw their complaints," the European Commission said in a statement. "In view of this, the commission doesn't consider it appropriate to invest further resources in this case."

The investigation was prompted by complaints in 2005 from six companies--Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments--that Qualcomm's high royalty rates were inhibiting competition in the chip market. Qualcomm said in a statement that it was "extremely pleased" with the decision to close to investigation, according to Bloomberg.

In a statement, Ericsson said that it would "continue its ongoing dialogue with competition authorities around the world in relation to Qualcomm's licensing practices. Ericsson's goal remains the same: To ensure a robust, enforceable and fair IPR regime for standards, particularly those relating to 3G and 4G wireless technologies."

Earlier this year, South Korean antitrust regulators fined Qualcomm $208 million for engaging in "unfair" business practices related to its chipset sales. Separately, Japanese antitrust regulators slapped the company with a cease and desist order, and told Qualcomm that it had to revise its licensing deals with Japanese handset makers.

Qualcomm's stock remained relatively unchanged on the news, hovering at around $45 per share. UBS analyst Maynard Um wrote in a note to investors that the move could free up Qualcomm to use its cash to repurchase shares or raise its dividend.

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

FCC's Baker skeptical of net neutrality for wireless

Phil Goldstein — Tue, 24 Nov 2009 10:37:38 -0500

FCC Commissioner Meredith Attwell Baker said she does not know how new, proposed neutrality rules could be applied to wireless networks--and hinted that the rules may be unnecessary in the first place.

Baker, one of two Republican commissioners on the five-member FCC panel, said she is concerned about possible unintended consequences of the new rules, which are intended for both wireless and wireline telecom companies. Initial comments on the draft rules are due Jan. 14.

"I'm not convinced we have a problem we need to address," she said in an interview during a taping of a C-SPAN show. Baker was formerly the head of the National Telecommunications and Information Administration at the Commerce Department during the Bush administration.

"As we go forward, I'm actually not clear how we could impose network neutrality rules on wireless networks," she said. "I think we'll leave it to engineers as we move forward to see how we can actually do that. What we don't want to do here, especially in the course of developing a national broadband plan, is to do anything that would harm the innovation and investment in these networks."

Baker's comments dovetail with net neutrality concerns voiced by a number of wireless players, including No. 2 wireless carrier AT&T Mobility and wireless trade group CTIA. FCC Chairman Julius Genachowski has made clear his intentions to impose net neutrality guidelines on both wireless and wireline carriers, and his fellow Democrats on the commission have largely been supportive of his actions. If the FCC passes net neutrality rules for wireless, it would represent a major policy shift for the nation's wireless industry.

In the interview, Baker also delved into an issue that has become the subject of contentious lobbying: Whether, as part of the FCC's national broadband plan, broadcasters' spectrum will be taken away and reallocated for wireless broadband use. "I don't expect we'd take all the broadcasters' spectrum, but I suspect that there might be some in there that might be more efficiently used in a commercial wireless sense," she said. "All ideas should be on the table."

The wireless industry, citing dramatic increases in demand for mobile data, has argued that additional spectrum be made available for auction for wireless broadband use--and various members of the FCC, including Genachowski, have hinted that broadcasters' spectrum may be raided for that purpose. Unsurprisingly, broadcasters have mounted a major lobbying effort in defense of their spectrum.

For more:
- see this The Hill article

AT&T launches prepaid mobile broadband offerings

Phil Goldstein — Mon, 23 Nov 2009 13:34:54 -0500

AT&T Mobility launched its own prepaid mobile broadband plans, weeks after rival Verizon Wireless decided to jump into the prepaid broadband market.

The new plans, called DataConnect Pass, work with all AT&T-certified netbooks and laptops. The pricing is identical to the plans that Verizon introduced earlier this month. AT&T is offering a daily plan for $15 with a cap at 75 MB of usage, a weekly plan for $30 with a cap at 250 MB, and a monthly plan for $50 with a 500 MB cap. AT&T said that users will receive a text and email message once either 30 minutes or 20 percent of their allotted data usage remains in a session.

The move by the nation's two largest carriers into prepaid mobile broadband marks a shift in the mobile broadband landscape. Previously, prepaid mobile broadband was the exclusive province of carriers such as Leap Wireless, and, more recently, Virgin Mobile USA. Leap offers unlimited usage for $40 per month and and Virgin Mobile offers 1 GB of data usage for $60.

For more:
- see this release

Giving the gift of wireless: a look at holiday handsets for 2009

Phil Goldstein — Mon, 23 Nov 2009 11:57:24 -0500

The official start of the holiday shopping season begins Friday, and all of the major U.S. carriers are rolling out their shiny new wares. Indeed, Verizon Wireless today rounded out its lineup with the launch of the Samsung Omnia II. The following guide is a look at the major handsets the Tier 1 operators are pushing this season, and includes each device's main features as well as its positioning in the market. A few caveats: This list is by no means exhaustive, and focuses only on the major smartphones that each carrier is selling. (Smartphone growth has taken off this year, and operators are heavily promoting these data-capable devices for the holidays.) Enjoy! Special feature

Analyst: AT&T to lose iPhone exclusivity in June

Phil Goldstein — Mon, 23 Nov 2009 11:43:02 -0500

Analyst Brian Marshall has added his voice to the growing chorus predicting AT&T Mobility will lose its exclusive U.S. rights to Apple's iPhone next year. During an interview Friday with Bloomberg TV, Marshall, of Broadpoint AmTech, said that AT&T will lose its exclusive deal with Apple in June.

Marshall has been pushing heavily for Apple to begin selling the iPhone through Verizon Wireless, which has been floated for months as a possible partner. During the interview, Marshall also made a few other assertions. He said that Apple gets a $450 subsidy from AT&T for each iPhone it sells, but that after June the subsidy will drop to $300 for all carriers. However, he said expanding the number of carriers selling the iPhone would ultimately result in more sales and more revenues for Apple.

Marshall's analysis echoes comments made by Piper Jaffray analyst Gene Munster, who said earlier this year that Apple is slowly transitioning to a model in which multiple carriers sell the iPhone in each country. Indeed, the end of Orange's iPhone exclusivity in France--today three French carriers offer the device--has served to dramatically boost Apple's market share there, according to research from Bernstein.

An AT&T spokeswoman declined to comment. An Apple spokeswoman did not immediately respond to requests for comment.

For more:
- see this Fortune blog post
- see this MarketWatch article

Moody's cuts Sprint's credit rating

Phil Goldstein — Mon, 23 Nov 2009 11:14:21 -0500

Moody's Investors Service reduced Sprint Nextel's credit rating on Friday, a further marker of concerns about the company's ability to turn around its struggling postpaid business. The action came a little more than a week after Standard & Poor's Ratings Service warned the company that its credit rating was at risk of being downgraded.

Moody's downgraded Sprint's rating to Ba2, down from Ba1, and indicated that the outlook on the rating was negative, meaning that Sprint could be cut again within the next 18 months.

"The downgrade of Sprint Nextel's rating reflects the company's continuing challenges in stabilizing its postpaid wireless operations, despite recognized improvements in customer service, amid intense competition and slowing industry growth," Moody's analyst Dennis Saputo said in a release announcing the downgrade.

The ratings service noted Sprint's strong liquidity, due to the carrier's ability to generate free cash flow, but said the downgrade reflected concerns over Sprint's ability "to stem the erosion of its competitive position and maintain market share." Both Verizon Wireless and AT&T Mobility have been steadily adding postpaid subscribers this year while Sprint has been unable to stop the defections.

Sprint's stock was up slightly in trading today after the news, to around $3.88 per share.

Sprint posted a net loss of $478 million in the third quarter, up from $326 million in the year-ago quarter. The company said earlier this month that it may cut between 2,000 and 2,500 jobs to save $350 million annually.

For more:
- see this Reuters article
- see this Kansas City Business Journal article