2007-03-16T11:19:09Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5 Movable Type Copyright (c) 2007, Sharon Armbrust 2007-03-16T11:19:09Z 2007-03-16T11:15:28Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7972 2007-03-16T11:15:28Z

At the Mobile TV World Summit in Munich, Germany March 14-15, TU Media’s ceo Dr. Young K Su showed the audience what a coordinated full court press into mobile TV could achieve...at least in Korea. TU Media, in cooperation with the country’s carriers, launched a satellite-delivered DMB Mobile TV network...

Sharon Armbrust Wireless At the Mobile TV World Summit in Munich, Germany March 14-15, TU Media’s ceo Dr. Young K Su showed the audience what a coordinated full court press into mobile TV could achieve...at least in Korea. TU Media, in cooperation with the country’s carriers, launched a satellite-delivered DMB Mobile TV network in mid 2005. 18 months later, the company boasts a 1.2 mil. subscriber count, which it expects to double in 2007 and to grow to 6.6 mil. by 2010. SK Telecom got the satellite frequency license and is a 33% owner in the venture. EchoStar recently bought a 10% position. Young K Su pointed to the service’s 95% population coverage and 50+ terminal choices as critical to its early success. That didn’t come cheaply as the company estimates it spent $400 mil. on a fill-in relay network to extend satellite coverage in metro areas and indoors. But it also found it had to be quick to evolve the offering to attract users. For example, the company started the service at a $14/mo. subscription rate but dropped it to $11/mo. last November and saw an immediately improved take-up response. A number of the company’s pre-launch assumptions were dispelled once subscribers showed their usage patterns, which led it to repeatedly change the channel lineup, which was reworked 22 times inside the first 18 months on air. It currently provides 38 channels (15 video and 18 audio), of direct broadcast TV as well as other event and special fare. And customers on average are using the service for 60 minutes/day. A before and after launch assumption chart looked something like this: Expectation Pre Launch Content: short form most popular Place: outdoor use most popular Time of Day: commute time = primetime Age Group: users will be youth generation Reality Post Launch Content: run time not very important to user Place: indoor use just as important as outdoor Time of Day: no prime time during the day; less use in the evening Age Group: 30% of users >40 years old; only 10% of base under 20 years 2007-03-08T14:28:56Z 2007-03-08T14:25:46Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7923 2007-03-08T14:25:46Z

Comcast ceo Brian Roberts held fast to his wait and see attitude towards the value of mobile to the cable MSO during an interview at Bear Stearns Media Conference in Palm Beach 3/1. “We don’t see the need to make a wireless acquisition to be competitive,” said Roberts. In case...

Sharon Armbrust Wireless Comcast ceo Brian Roberts held fast to his wait and see attitude towards the value of mobile to the cable MSO during an interview at Bear Stearns Media Conference in Palm Beach 3/1. “We don’t see the need to make a wireless acquisition to be competitive,” said Roberts. In case the world goes in a direction “that we don’t see today” he added, the company has its dry powder of 20 MHz of spectrum from the AWS auction. And Roberts figures those licenses are probably appreciating and making money for Comcast while management watches the business intersections evolve. Meanwhile, Comcast is content to continue its experimentation in the space using Sprint’s network. In explaining the disconnect which he still sees between video and wireless, Roberts noted that wireless video uses 100x as much spectrum as voice which makes the economics of the service on the tiny screen a challenge, and at the same time over 50% of the TV sets to be sold in 2007 are going to be 50” screen size or larger. The stats speak to the immaturity of mobile video and the still tenuous connection between mainstream television and the mobile screen. Meanwhile, Comcast is charging into landline telephony and aiming to sell 2.6 mil. subscriptions for that service in 2007. It figures having a mobile add-on might net it a fractional gain in that sales goal, but it is fully occupied with its current mandate to sell video, broadband and telephony packages, where the current appetite is enormous. Take-away: no hurry. Because Comcast and the other cable cos. are very interested in enhancing personalization options for their customers, and pushing the use of video on demand as a platform to support that effort, we think that it is likely that mobile video could come into focus on Comcast’s radar from that direction first. 2007-02-28T16:46:52Z 2007-02-28T12:42:08Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7891 2007-02-28T12:42:08Z

Mobile TV and content distributor MobiTV got a big plug in the WSJ on 2/28, with Katherine Boehret writing in the Mossberg Solution column about her tests of MobiTV on Cingular and Sprint networks with various phones. She liked what she saw compared to the last time she tried in...

Sharon Armbrust Wireless Mobile TV and content distributor MobiTV got a big plug in the WSJ on 2/28, with Katherine Boehret writing in the Mossberg Solution column about her tests of MobiTV on Cingular and Sprint networks with various phones. She liked what she saw compared to the last time she tried in 2004 because the steady improvements in networks and devices now makes watching TV in the palm of your hand viable and even enjoyable, Boehret said. The timing of the Journal’s compliment is fortuitous because the players on the ground in mobile TV in the U.S. may now be ready for the scrutiny.. MobiTV just passed the two mil. sub mark, doubling its base in a year. MediaFlo is launching its mobile broadcast service on Verizon (reportedly sometime in March) and Cingular, content owners and aggregators like MobiTV are sharply focused on tailoring and improving their mobile video menus, plus the carriers are sort of making it easier to find what they and their partners have to offer. ALLTEL, for example, just introduced something called CellTop, a Brew platform-based technology which allows subscribers to quickly access and manage their preferred applications on the phone via a personalized array of graphical navigation short-cuts. Aimed at increasing discovery, ease of use and ultimately usage, CellTop is pre-installed on phones and is free. What price points and/or combination of price/ad support will attract steady viewers has not yet been proven out, but delivery of good product and a quality viewing experience seems to be coming into focus. And best of all, with customers regularly changing out phones for the next upgrade every 18 months or so, mobile TV can get judged--good or bad-- on its own merits rather than on the limitations of network and device environment. 2007-02-28T11:59:39Z 2007-02-28T11:47:53Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7890 2007-02-28T11:47:53Z

As reported in the Wall St. Journal today, 2/28, an administrative law judge for the ITC (Intl Trade Comm.) overseeing one of the patent disputes between QUALCOMM and Nokia, put a trial scheduled for March 5 on hold, probably signaling his desire that the two sides try again to come...

Sharon Armbrust Wireless As reported in the Wall St. Journal today, 2/28, an administrative law judge for the ITC (Intl Trade Comm.) overseeing one of the patent disputes between QUALCOMM and Nokia, put a trial scheduled for March 5 on hold, probably signaling his desire that the two sides try again to come to a negotiated out-of-court agreement. This particular complaint relates to Qualcomm’s claim that Nokia has been infringing on QCOM CDMA patented technology in its GSM phones. Nokia intimated that QUALCOMM’s claim was shrinking as it has reduced its patent infringement claims from six to three over the course of the litigation to date. This is the 2nd shoe to drop in a week. On Feb. 23, QUALCOMM and Broadcom agreed to drop patent claims for two of five and two of four patent infringements the pair had claimed against each other. The rest of the claims remain open. But the bigger shadow over an assortment of litigation among Qualcomm, Broadcom, Nokia, Ericcson and others is whether QUALCOMM can migrate its 800 lb. gorilla status in CDMA into coming generations of WCDMA and OFDM protocol technologies. How valuable is its patent portfolio and what can it charge its competitors for same? The GSM vendors have a long-standing complaint at the European Commission claiming royalty overcharges by QUALCOMM for its patents. Its blanket reciprocal patent licensing agreement with Nokia expires Apr. 9 and is still being negotiated. QUALCOMM ceo Paul Jacobs indicated last week to investors that he was hopeful the GSM carrier Cingular’s recent choice of MediaFlo for mobile broadcast might positively influence the GSM group vs QUALCOMM negotiations, but also noted that mediation is a good possibility. Most recently, QUALCOMM has posted on its web site a 3rd party critique which claims Qualcomm’s “essential” CDMA patents should be valued and licensed on a simple numeric basis vis a vis all other CDMA patents. The rebuttal paper blasts the idea of relying solely on the number of patents identified as essential for a given set of products and applications and instead recommends a blend of qualitative and quantitative analyses plus historical pricing precendent as more reliable. The authors include an interesting table which identifies U.S. patents disclosed to ETSI for UMTS standard using data between 1975-2004, comparing simple patent counts, non-self citations received and average non-self citations received per patent for Ericsson, Nokia and QUALCOMM among others. The table highlights the different conclusions one might draw from simply counting a patent vs counting how often it is cited by competitors as essential to a given product vs counting how often each patent in a patent family is cited on average. Simple Patent Counts Ericsson 163 QUALCOMM 105 Nokia 53 Non-Self Citations QUALCOMM 6,528 Ericsson 2,980 Nokia 466 Non-Self Citations/Patent QUALCOMM 62 Ericsson 18 Nokia 9 There are definitely a few more twists and turns to come before this standoff gets resolved, but the events of the past week indicate the courts may be helping it along. Shares in both QCOM and NOK fell about 2% during the panic trading of 2/27. 2007-02-22T22:12:33Z 2007-02-22T13:03:23Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7871 2007-02-22T13:03:23Z

Clearwire, which lobbied the FCC all through 2006 to force AT&T to jettison its 2.5 GHz spectrum as a prerequisite to the AT&T/BellSouth merger, got its wish Dec. 29, when the $86 bil. merger got FCC approval, under the proviso that AT&T get rid of BLS 2.5 GHz and build...

Sharon Armbrust Wireless Clearwire, which lobbied the FCC all through 2006 to force AT&T to jettison its 2.5 GHz spectrum as a prerequisite to the AT&T/BellSouth merger, got its wish Dec. 29, when the $86 bil. merger got FCC approval, under the proviso that AT&T get rid of BLS 2.5 GHz and build out its 2.3 GHz spectrum by 2010(among other prerequisites). And then a little over a month later it got the spectrum too, which clearly was the goal all along. AT&T announced on 2/20 that it would sell 2.5 GHz spectrum in former BellSouth territory to Clearwire for $300 mil. cash. We estimate that BellSouth has on average about 100 MHz in 40 license areas covering just under 20 mil. pops, which would put the deal value at approximately 16 cents/MHz pop.That's equivalent to the level at which Clearwire is aiming to go public in the next month or so, before adjusting for equity dilution from convertible preferred, warrants, options etc. If it can get its proposed per share offering price of $24/share in its IPO, on a fully diluted basis, the market would be valuing its portfolio (U.S. and international combined) at closer to 26 cents/MHz pop, putting the acquisition from AT&T at just over 60% of its public market price point--on a MHz pop basis. (for detailed analysis of Clearwire pending IPO, see the Wireless Investor report at Kagan Research. www.jupiterresearch.com/bin/item.pl/research:concept/1235/id=98811/ 2007-02-12T20:38:28Z 2007-02-12T20:35:41Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7833 2007-02-12T20:35:41Z

SpectrumCo, the Sprint and Cable MSO jv, weighed in at the FCC 1/11 with regard to the appropriate license sizes for the U.S. government’s upcoming auction of Upper 700 MHz spectrum. It proposed multiple licenses of different MHz and geographic sizes (as did T-Mobile and other mid-sized carriers), opposing a...

Sharon Armbrust Wireless SpectrumCo, the Sprint and Cable MSO jv, weighed in at the FCC 1/11 with regard to the appropriate license sizes for the U.S. government’s upcoming auction of Upper 700 MHz spectrum. It proposed multiple licenses of different MHz and geographic sizes (as did T-Mobile and other mid-sized carriers), opposing a petition by DirecTV and Echo to auction a national license. An open question is whether its interest in the proceeding signals MSO interest in participating in the 700 MHz auction or is simply blocking and tackling against the satcasters, whom Cable MSOs wouldn’t relish seeing win a valuable swath of nationwide 700 MHz in one fell swoop. But its attention to the 700 MHz activity heightens anticipation over who will bid in that auction and with what size war chest. The big MSO consortium currently owns 20 MHz of spectrum won in the AWS auction. But a credible voice/broadband data offering probably needs 40 MHz+. More similar to the DBS operator proposal, Verizon has also weighed in in favor of the large supra-regional license plan that is provisionally in place (6 covering the U.S. and Territories) vs the smaller metropolitan geographic area that were part of the AWS auction. The larger the license areas, the fewer the bidders there are who would be financially capable of participating. The current band plan for the upper 700 MHz auction calls for six 10 MHz licenses and six 20 MHz licenses to be auctioned—30 MHz in all. 2007-02-12T20:35:02Z 2007-02-12T20:28:03Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7832 2007-02-12T20:28:03Z

Qualcomm’s big win of an AT&T Wireless contract for its MediaFlo broadcast TV service, announced 2/12, puts the service into the rosters of the two largest wireless carriers in the U.S.—one each from the CDMA and GSM camps, and gives it a clear lead over the major DVB-H proponents in...

Sharon Armbrust Wireless Qualcomm’s big win of an AT&T Wireless contract for its MediaFlo broadcast TV service, announced 2/12, puts the service into the rosters of the two largest wireless carriers in the U.S.—one each from the CDMA and GSM camps, and gives it a clear lead over the major DVB-H proponents in the U.S.--Aloha/Hi-Wire and Crown Castle's Modeo, neither of which has a commercial client. Aloha is running tests with T-Mobile in Las Vegas and Crown is on air in NYC. It probably also increases MediaFlo’s chances of gaining favor among European carriers, which have been focused mainly on the Nokia-promoted DVB-H version of broadcast mobile TV. Qualcomm is pushing the service this week in Barcelona at the giant 3GSM confab, where it has already scored a coup on the chip side of its house. It will supply the chips for new entry-level 3G phones to be produced by LG Electronics for a group of 12 international carriers in their “3G for All” Campaign around the world. The phones will be delivered in bulk in 2Q07 at a 30% wholesale discount to current entry-level 3G models and could retail for as low as $100. 2007-02-12T20:43:52Z 2007-02-12T20:16:10Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7831 2007-02-12T20:16:10Z

Qualcomm/MediaFlo has always been expected to be a player in the upcoming Upper 700 MHz spectrum auction, which is tentatively scheduled for January, 2008, but which could take place as early as this coming August, according to some Washington observers. But the stakes in this auction probably just got higher....

Sharon Armbrust Wireless Qualcomm/MediaFlo has always been expected to be a player in the upcoming Upper 700 MHz spectrum auction, which is tentatively scheduled for January, 2008, but which could take place as early as this coming August, according to some Washington observers. But the stakes in this auction probably just got higher. Now that MediaFlo has landed its 2nd contract (announced today at 3GSM in Barcelona) to provide mobile broadcast TV as part of AT&T Wireless’ 3G service package (the first contract came from Verizon for its VCast service), it should be highly motivated to add more 700 MHz spectrum to its 6 MHz portfolio. Among the 700 MHz admirers, and possible bidders, are Verizon, T-Mobile, ALLTEL, Leap, the cable MSOs with or without Sprint, satcaster EchoStar, satcaster DirecTV, now controlled by Liberty, which is flush with cash and Aloha, already a 700 MHz spectrum owner of 12 MHz…but a DVB-H technology proponent. Each of these potential bidders has different motivations (and means) for being in this auction. And that will play into their bidding appetites, should they join the fray. Add to that the ever-present speculation over a wild card (read: internet) player and private equity funds in assorted co-productions. With any variation of this cast of bidders, it’s pretty clear this will be a very competitive sale proceeding. The spectrum is high end, the amount being auctioned (30-60 MHz--30 MHz upper 700 band; 24 MHz lower 700 band) is limited and this may be the last of it, it’s very attractive for all fixed/mobile business models and it is perceived as a powerful weapon or highly fungible trading card in the hands of incumbents as well as new entrants. It’s a good bet you won’t see AWS Auction #66 price points in this go-round. 2007-02-02T16:32:53Z 2007-02-02T16:16:42Z tag:weblogs.jupiterresearch.com,2007:/analysts/armbrust/5.7781 2007-02-02T16:16:42Z

Provocative arguments over the eventual economics of mobile TV, the struggle for customer attention between content and distribution camps and the likelihood of a mass market for mobile TV continue unabated. Meanwhile, Orange has been posting real results that indicate a very attractive growth profile for live and made-for-mobile on-demand...

Sharon Armbrust Wireless Provocative arguments over the eventual economics of mobile TV, the struggle for customer attention between content and distribution camps and the likelihood of a mass market for mobile TV continue unabated. Meanwhile, Orange has been posting real results that indicate a very attractive growth profile for live and made-for-mobile on-demand viewing in this new media sector. One third of Orange mobile subscribers watch live mobile TV, on average about 35 minutes/month. They watch primarily regular TV channels, but Orange complements this with made-for-mobile /TV Lite fare as well. Subscribers can buy a subscription package of 12 Channels for 5 Euros or the full offering of 53 Channels for 12 Euros/mo. Orange also has an alternative opt-in subscription plan for ad-supported mobile TV. In this version, the sub is asked to answer a short list (3-4) of questions, then view a 15-20 second advertisement before the programming is opened. Orange is able to appeal to a wider swath of viewers by making both plans available. But Frank Boulben, former evp Marketing at Orange thinks the real driver for making mobile TV mainstream will be a satisfying user experience. With each improvement in video delivery quality via devices, infrastructure and technology, Orange has seen better consumer response. In the company’s DVB-H trials, where consumers are watching this much better quality TV, their average viewing time has escalated dramatically. Aloha Partners/Hi-Wire Preps for DVB-H Trial in Las Vegas With TV Viewer Research Those are the kind of results that Aloha Partners, license holder of 2 6-MHz channels in the 700 MHz band and that band’s proponent of DVB-H mobile video technology, has found in its viewer research as well. Aloha will start its technology trial of DVB-H mobile TV with T-Mobile in Las Vegas on April 1. It plans to use both of its available channels for 20-30 programming options. Its programming choices to start are going to be driven by TV Viewing research it conducted via Nielsen and other ratings statistics. It is going after a relataively broad 18-45 age group band, but broken down into 4 groups—15-25 and 25-45 and males and females separately within each of the age group sub-sets. These are the people already watching mobile video via cellphones and video iPods today. There are some commonalities in the viewing habits within these sub-sets but also lots of differences, which is why Aloha is thinking it will need both of its channels. And so far it is the only player with two channels at 700 MHz. What all four groups had in common, according to Nielsen stats is that they primarily watch 6-10 channels of which 4-5 basic cable channels are staples—TNT, USA, Fox and TBS for starters. But after that, there is a distinct divergence between male and female viewers. The top picks among males 25-45 are ESPN, History Channel, Discovery, FX, Spike and Adult Swim. But the female group 25-45 is partial to Lifetime, Nick at Nite, HGTV, Nickelodeon, Hallmark and the Food Channel. And according to Aloha ceo Charlie Townsend, the divergence gets even more pronounced, as one might expect, when you drop down to the two age group sub-sets and also to the males vs females within the two age groups. Aloha also determined that local networks had a big draw, so the company is aiming to get local as well as national program rights from broadcasters. While Aloha’s first appearance is a technical trial, it will also be testing pricing preferences within the control group. In advance of the sunset date for moving incumbents off the 700 MHz space, the company has also applied for a FCC waiver to operate in Dallas, using newly simplified rules of minimum interference (0.5-2%) that the FCC implemented in granting a Qualcomm blanket request for better defined and less stringent waiver processing at 700 MHz. 2006-10-25T23:40:19Z 2006-10-25T23:37:28Z tag:weblogs.jupiterresearch.com,2006:/analysts/armbrust/5.7293 2006-10-25T23:37:28Z

The MSOs’ current joint venture and reciprocal resale agreement with Sprint Nextel is a good field lab. Cablecos are getting a handle on all the back office and technology and service integration issues they will need to address, then get built and running smoothly before any fully integrated mobile component...

Sharon Armbrust Wireless The MSOs’ current joint venture and reciprocal resale agreement with Sprint Nextel is a good field lab. Cablecos are getting a handle on all the back office and technology and service integration issues they will need to address, then get built and running smoothly before any fully integrated mobile component is ready for prime time in the cable industry service bundle. But what next? The WJS today (10/25) reported on persistent rumors that Comcast might be eyeing Sprint Nextel or Yahoo as an acquisition target, given its 52 week high stock price and the other companies’ down market trading levels. Comcast recently $39, up 42% LTM, while Yahoo is down 31% to about $24 and Sprint Nextel down 25% to under $18. Comcast has been firm in roundly quashing that talk. Comcast surely doesn’t need to be in any hurry to leverage up for Sprint Nextel should it develop an interest. Timing and tactics are on its side. a. Now that it has its own wireless spectrum from the AWS auction, its bargaining position for a re-written jv with Sprint is much stronger, should the MSOs want to go that route. b. Sprint Nextel is struggling mightily with a poorly executed Nextel integration (see earlier blog) and would be a big headache to take over. And while it fixes its network problems, its stock is likely to get hit some more. c. Competitors AT&T and Verizon haven’t made much of their wireless capabilities in any bundle marketing yet, although it is on their radar to do so. But first up are AT&Ts BellSouth merger and Cingular roll-up, Verizon’s $18 bil. spend on its IPTV net. Comcast has always been measured in its pace of rolling out new technologies. It was a year behind its peer group in getting to its cable telephony offering. But after less than a year in the market it has 10% penetration of its marketed homes, and cable telco penetration in aggregate will ramp to over 20% by 2011 and over 25% by 2016, according to our latest Kagan forecasts. It’s unlikely Comcast’s mobile moves will be any less thoughtfully deliberately executed than its telephony and previously its broadband tier were. That makes the Sprint/Cable jv a perfect starter course for whetting the appetite. 2006-10-25T23:28:30Z 2006-10-25T23:25:15Z tag:weblogs.jupiterresearch.com,2006:/analysts/armbrust/5.7291 2006-10-25T23:25:15Z

Leap and Metro’s big wins in the AWS auction will bring their brand of all-you-can-eat prepaid service into a ton of new markets. Leap has already reported adding a robust 161K net new subscribers in 3Q06, up from 3K adds a year ago, thanks to 10 new 2006 market launches...

Sharon Armbrust Wireless Leap and Metro’s big wins in the AWS auction will bring their brand of all-you-can-eat prepaid service into a ton of new markets. Leap has already reported adding a robust 161K net new subscribers in 3Q06, up from 3K adds a year ago, thanks to 10 new 2006 market launches including Austin, El Paso, Colorado sprints, Houston, San Antonio, Cincinnati and Kansas City. Through the first nine months of this year, Leap’s net adds were up 180% over the full 12 months of 2005. As Leap moves into major new territories like Philadelphia, Washington, DC and Minneapolis and Metro takes its attack to the greater New York metropolitan area as well as expands its reach in Northern CA and around Dallas, they will be putting real pressure on the national competitors from the bottom up--in many, many more markets than before, in particular in coveted top 50 metros. Cingular is now touting the efficiency of its prepaid GoPhone platform as it tries to get some more share in low end market sectors and claims to have a handle on the cost structures. It tripled its net prepaid adds in 3Q06 y-o-y and indicated that 85% of prepaid subs migrating off the company’s old platform were buying into plans of on average 25% higher value than before. However, historically the big 4’s high cost networks have simply been no match for the custom-built low cost networks of the segmentation specialists like Leap and Metro. And Cingular admits that this is a lower margin business for it. First to market in another juicy market segment, T-Mobile launched its single-phone convergence service trial in Seattle 10/23 with two Samsung dual-mode GSM-Wi-Fi models for $49.99 with a 2-year service contract and the purchase of least a $39.99/mo. plan. A $19.99 flat monthly fee gets added for unlimited access to customer’s own home broadband connection (sub buys a router) and to T-Mobile’s 7K location Wi-Fi network where sub’s usage doesn’t deplete subscriber’s mobile plan MOUs. Here again, the hybrid structure of T-Mobile’s networks and its business model give it a big leg up on capturing this market segment early on. T-Mobile has no landline parent like Verizon and Cingular, so it can go full speed ahead in trying to migrate subs to a single phone hybrid net solution, where its wireline competitors have to orchestrate this evolution much more delicately and deliberately. And whatever MOUs T-Mo loses on its PCS network reduce the burden on its infrastructure (T-Mobile subs chow down more than 1K MOUs/mo. on average. In addition, if customers are making their calls from home, they are most often doing it during free evening and weekend dayparts, where T-Mobile isn’t making money anyway. 2006-10-25T23:51:24Z 2006-10-25T23:08:28Z tag:weblogs.jupiterresearch.com,2006:/analysts/armbrust/5.7289 2006-10-25T23:08:28Z

Now it’s Sprint’s turn to get eaten alive. Verizon ran rough shod over Cingular as it struggled to integrate its AT&T Wireless acquisition 20 months ago. Now Verizon and Cingular are both feasting on Sprint’s woes. Sprint is expected to be licking its wounds when it reports 3Q results tomorrow....

Sharon Armbrust Wireless Now it’s Sprint’s turn to get eaten alive. Verizon ran rough shod over Cingular as it struggled to integrate its AT&T Wireless acquisition 20 months ago. Now Verizon and Cingular are both feasting on Sprint’s woes. Sprint is expected to be licking its wounds when it reports 3Q results tomorrow. Wall Street is forecasting deep subscriber hits and probably lower ARPU again (Sprint had a $3/mo. drop in ARPU y-o-y in 2Q06. Sprint’s iDen network , which the company neglected post merger, optimistically expecting to be able to migrate iDen PTT subs to its CDMA Network solution much faster (it just signed on with Qualcomm’s QChat in October), has been bleeding high value customers and they’re getting hungrily picked up by Verizon and Cingular, both of which are now competing heavily on network quality claims. Equally painful for Sprint is that the subscribers it has been losing are from its highest revenue, highest margin category. Its ARPU dropped in 2Q06 to $62/mo. from $63/mo. in 1Q06. Should it be down again in 3Q, the pressure on its cash flow margin will be heavy as Nextel’s legacy of the highest revenue and cash flow competitor in the marketplace continues to get eroded. 2006-10-17T21:38:18Z 2006-10-17T21:27:21Z tag:weblogs.jupiterresearch.com,2006:/analysts/armbrust/5.7232 2006-10-17T21:27:21Z

Bemoaning the slow uptake of mobile broadband and mobile video has been a theme song of 2006, a tune we think got trendy too fast given the widespread lack of opportunity consumers have had to sample mobile broadband, either at all or in any manner that renders a rewarding experience....

Sharon Armbrust Wireless Bemoaning the slow uptake of mobile broadband and mobile video has been a theme song of 2006, a tune we think got trendy too fast given the widespread lack of opportunity consumers have had to sample mobile broadband, either at all or in any manner that renders a rewarding experience. But that ability to sample enjoyably—which is a proven lead-in to purchasing—could gain speed pretty quickly in 2007 based on a flurry of recent initiatives from the GSM fraternity and assorted vendors and carriers with fast-tracked projects for enterprise and consumer markets. At the Intel Developer conference in San Francisco at the end of September, Intel touted its upcoming Intel Centrino Duo mobile platform with assorted mobile connectivity options. In partnership with Nokia, Intel will embed HSDPA mini-card modems in laptops. Embedded modems will represent a reported 17% of the market in 2006, and vendors indicate that once that gets above 20%-25%, there is a hockey-stick acceleration in uptake and decline in costs. At the Symbian SmartPhone Show this week, both SlingMedia and Sony put forward services allowing at-home video subcriptions to go mobile via place-shifted streaming. Sling said it will deploy a Symbian based SlingPlayer in 4Q and Sony is putting its LocationFree software in the SonyEricsson P990 Smartphone. Vodafone is doing its part to drive the market by introducing 10 new 3G handsets for the Christmas selling season—including five at entry-level pricing and six souped-up speed HSDPA phones from Motorola and Samsung. Out of the 3GSM conference in Singapore this week came two announcements aimed at juicing the consumer and business uptakes of all flavors of mobile broadband. On the consumer side of the ledger, in a “3G for All” campaign, a dozen international GSM carriers have set a date of the Feb. 2007 3GSM Congress in Barcelona to announce which vendor they’ve chosen to bring to market a 3G phone at well below the low end of 3G handset prices today. An RFP has gone out from the GSM trade association on behalf of Cingular Wireless, Globe Telecom, Hutchison 3G, KTF, MTN, Orange, Smart, Telecom Italia, Telefonica, Telenor, T-Mobile and Vodafone. The mandate is for a 3G phone that supports internet browsing, mobile TV, advanced messaging. And the punch of 12 carriers who together serve over 620 mil. subscribers is intended to give manufacturers the scale they would need to simultaneously meet both the advanced service and low price criteria in the RFP. For the business market, the GSMA issued guidelines for implementing HSDPA for 3G in notebooks, covering essential 3G integration elements for functionality, features, security aspects, compliance and testing. Spearheading this initiative is a group of carriers and vendors —carriers Cingular, O2, Orange, TeliaSonera, TIM, T-Mobile, Vodafone, and manufacturers and mobile software suppliers Check Point, Dell, Fujitsu, Gemalto, Intel, Lenovo, Microsoft, Option Wireless, Novatel Wireless, Qualcomm, Sierra Wireless and Sony Ericsson. Content owners have already bought into the mobile platform. But getting mobile subs in contact with their programming has been a sticking point. MobiTV ceo Phil Alvelda says most people aren’t even aware they can get broadcast TV on their phones, even if they do have the capability. Even so, MobiTV’s ranks, now over 1 mil., are growing at their fastest pace. If the enabled devices continue to multiply at the rate they have been introduced in recent weeks and phone manufacturers keep improving on the one click interfaces that get subscribers to the mobile internet and video malls with ease…sometimes by mistake…we’re betting the uptick in consumption won’t be that far behind. 2006-10-07T22:22:07Z 2006-10-07T21:57:03Z tag:weblogs.jupiterresearch.com,2006:/analysts/armbrust/5.7179 2006-10-07T21:57:03Z

Yesterday (10/6) T-Mobile shared with investors its plans for its UMTS/HSDPA upgrade using its newly won AWS spectrum, but it also used the occasion to brag that it hasn’t been missing the 3G boat at all, contrary to Wall Street’s concern about it not being able to match Verizon and...

Sharon Armbrust Wireless Yesterday (10/6) T-Mobile shared with investors its plans for its UMTS/HSDPA upgrade using its newly won AWS spectrum, but it also used the occasion to brag that it hasn’t been missing the 3G boat at all, contrary to Wall Street’s concern about it not being able to match Verizon and Sprint’s race into mobile broadband and video for lack of spectrum. Rather, T-Mobile thinks it has the timing just right and the path as well. The company will roll out its new network starting in 2007, mostly in 2008 and finish in 2009. Some of the cost, timing and strategy advantages it thinks it has: 1. It expects to be buying 3G handsets at $150-300/unit vs the $250-500/unit its rivals are currently paying. So its phone subsidy picture will be vastly different from its peers today. 2. It paid just 59 cents/MHz pop (based on 2006 pops) to double its spectrum nationally, from 26 MHz to >50MHz on average, and it will operate on just two bands, vs 3 or more for competitors. 3. It likes its ratio of successful new services vs the competition—with its Blackberry, Sidekick, TM Hotspot integration, through which its moving consumers PC functionality to mobile. T-Mobile claims the sweet spot of 3G is taking widely used consumer services of today and moving them to mobile with no degradation of service, and that’s more feasible to do with things like email and fixed/mobile migration than with niche services like video where the consumer experience is still so inferior. One incubator the company has for keeping track of usage patterns from the PC to the mobile phone is with its Sidekick customers. Over 500K of its 23 mil. sub base uses the trendy device. And T-Mobile has seen that fully 30% of the web pages pulled up by Sidekick users are on MySpace--a great example of a hugely popular PC service going mobile and one that T-Mobile thinks it can build on by staying tightly focused on its chosen core customer segments. 2006-10-07T20:59:11Z 2006-10-07T20:31:35Z tag:weblogs.jupiterresearch.com,2006:/analysts/armbrust/5.7178 2006-10-07T20:31:35Z

Bemoaning the low returns available in a venture cap industry awash with funds, Sevin Rosen, the highly respected and visible venture capital firm that has been a sought-after investment vehicle for its 25 year history, announced 10/6 that it was scrapping its latest (10th) Fund and returning the $250-300 mil....

Sharon Armbrust Wireless Bemoaning the low returns available in a venture cap industry awash with funds, Sevin Rosen, the highly respected and visible venture capital firm that has been a sought-after investment vehicle for its 25 year history, announced 10/6 that it was scrapping its latest (10th) Fund and returning the $250-300 mil. which had already been committed by investors for that Fund. Why? Because of what it described as “a terribly weak exit environment”—few IPO opportunities and too low takeout prices in the private market to yield the returns its investors demand. That last point highlights one of the issues that kept venture caps at a distance from the recent FCC auction for AWS spectrum—a venture cap-unfriendly environment that would likely lower vc returns. The irony is that the spectrum went at historically low prices, but the beneficiaries were a dozen large winners (out of 166 in the race), who walked away with a ton of spectrum. The FCC changed the rules for Designated Entities--small business which could get a 15-25% discount on their bids if they met the small biz criteria and followed some new holding rules. Those new rules became a sticking point for DEs to attract financing. The FCC extended the holding time for DE licenses from five to 10 years. Most venture capital entities need and want to turn their investments in about five years. And the FCC limited the wholesaling of spectrum by DE license owners to The data below show the small business buyer activity in the last four FCC auctions of spectrum similar to cellular/PCS spectrum. In Auction #66 (1.7-2.1 GHz - 9/06) DE winners bought 1.3% of the purchased spectrum In Auction #58 ( 1.9 GHz - 2/05) DE winners bought 10.1% of the purchased spectrum In Auction #44 (700 MHz - 9/02) DE winners bought 10.9% of the purchased spectrum In Auction #49 (700 MHz - 6/03) DE winners bought 31.0% of the purchased spectrum