Mobile broadband gateway developer Stoke Inc. said it deployed its 100th mobile gateway earlier this week, less than two years after shipping its first commercial system. The company expects to deliver its 200th system by the end of the year, said President and CEO Vikash Varma.
“We've experienced hock-stick growth, which we're proud of because the components market has been tight. We can't tie up too much cash so we need to be as close as possible to just-in-time with inventory,” Varma added.
The company offers a Stoke Session Exchange gateway, first deploying the solution with NTT DoCoMo in Japan for a femtocell solution, and in January, winning an LTE contract with DoCoMo. Indeed, DoCoMo has invested in the company, which recently completed $25 million in series D funding round. Noted venture-capitalist firms Kleiner, Perkins Caulfield and Byers and Sequoia Capital also have invested in Stoke. Varma said that the last time those two VCs invested in the same company the investment was in Google Inc. Indian operator Reliance Communications also has invested in the company after deploying its solution.
ABI is predicting a 100-fold increase in data traffic by 2015, Varma said. Wireless networks are struggling to meet today's data demands and the expected future data explosion because 3G networks simply were not designed to handle all that traffic. “It doesn't matter how efficient Facebook video chat is if 500 million Facebook friends are video chatting at the same time. This is what is driving the mobile broadband network,” Varma said.
Network systems designed 10 years ago were built for a “nicer time” when operators were able to better predict traffic on the network. Going forward, operators face won't necessarily be able to predict what application or device will drive traffic. “Apple and Android have up-ended the market.”
Because of that, operators are trying to respond to dramatic growth with usage-based billing models but that likely won't work until end users understand what a gigabyte means. Instead, operators need to optimize the network by offloading traffic from the mobile core, Varma said. Stoke's solutions address key areas of the network, offloading data with Wi-Fi, femtocells, LTE network gateways and non-intrusive Iu-PS breakout. The gateway solution also provides seamless transition between 3G, LTE and Wi-Fi technologies. “Our approach is different because we have no legacy product that we have to build from. It helps businesses cross over from the limitations from how they've done things years ago.”
The gateway product sits between the Radio Access Network (RAN) and the core network, diverting the session to the nearest Internet Protocol point. Varma said the Stoke Session Exchange solution addresses the problem “surgically,” noting that AT&T Mobility's network congestion occurs on the West and East coasts, so the operator only needs to address the problem in those regions, not nationwide.
8/30/2010 4:03:22 PM
Mobile broadband gateway developer Stoke Inc. said it deployed its 100th mobile gateway earlier this week, less than two years after shipping its first commercial system. The company expects to deliver its 200th system by the end of the year, said President and CEO Vikash Varma.
8/30/2010 3:56:54 PM
Editor's Note: This article is an excerpt from RCR Wireless News' May Special Edition, ''Enabling the Mobile Revolution: Mobile Chips, Devices and Accessories.'' The 80-page special edition is available here.
There is not a more vexing problem for the wireless industry than the plight of rural operators.
On one hand rural operators are essential in that they provide services to a large portion of the nation that larger operators have overlooked, and they also offer network roaming capabilities for just about all of the industry's largest operators. On the other, rural carriers have very different operational structures from their larger brethren and thus are often at odds with the nationwide carriers when it comes to regulatory and competitive concerns.
To the surprise of few, rural wireless operators continue to face a number of challenges in their collective daily quest to remain viable options for consumers increasingly bombarded with advertising and promotions from nationwide operators--operators that spend billions of dollars on marketing each year and, in the case of the nation's two largest operators, are dominating the market.
This has often resulted in a ''big vs. small'' dynamic among wireless carriers that has prevented a cohesive front to regulators.
Battling big brothers
At this year's Rural Cellular Association event, a number of speakers representing smaller carriers noted during a panel discussion that the wireless industry was dominated by two operators that were increasingly driving the industry to a duopoly.
''It's not inevitable, but it's heading that way,'' said recently named RCA President and CEO Steven Berry during a panel session entitled, ''Wireless at a crossroads.''
Berry noted that 90% of all new postpaid customer growth in 2009, or roughly 9 million customers, were signed up by either Verizon Wireless or AT&T Mobility. And that even the smallest of the nationwide operators, T-Mobile USA Inc., was more than five times larger than the largest member - U.S. Cellular Corp. - of RCA.
Beyond the pressure being applied by rival operators, Berry noted rural wireless carriers were also at a policy crossroads.
''Decisions are being made now that will determine whether we are allowed to compete fairly or that will put us at a disadvantage,'' Berry warned.
Those decisions include voice and data roaming, of which RCA gained a victory on earlier this year when the Federal Communications Commission cut home-roaming exclusions; spectrum interoperability surrounding the 700 MHz band, details of the National Broadband Plan and Universal Service Fund reform.
''If any of these decisions go into AT&T's or Verizon's favor it could put us all in danger,'' warned Slayton Stewart, outgoing chairman of RCA and CEO of Carolina West Wireless.
USF making way for NBP
One topic that has garnered strong opinions from both sides of the battle is USF reform. Smaller carriers claim these funds are necessary for them to be able to continue to provide services in areas that cannot justify investments, while opponents think the fund is a way for larger carriers to subsidize their smaller competitors. The FCC has long sought ways to reform the current system and with its latest proposal in the National Broadband Plan is asking that traditional USF funds be diverted to operators, regardless of size, that will build out wireless broadband networks.
Berry noted that the recently announced National Broadband Plan basically will eliminate USF support to rural wireless carriers, but that the Connect America plan in its place is still lacking details.
''The NBP falls short for regional carriers,'' Berry said. ''I am very disappointed in it. It creates new non-facilities-based competitors for regional carriers.''
Smith noted that while USF may need some reform, the premise of the program is still needed for rural wireless carriers looking to offer service.
''USF has been about providing telecom capabilities no matter where you are in the U.S.,'' said Smith. ''I am still trying to build out wireless voice in some areas. There are still places without basic wireless service.''
This lack of actual customers to serve is highlighted by Hays, Kansas-based Nex-Tech Wireless, which operates a CDMA-based network covering portions of western Kansas and eastern Colorado. The carrier said its network covers around 190,000 potential customers spread accross 30 counties.
''Much of our coverage area has more coyotes and potatoes than people,'' noted Johnie Johnson, CEO of Nex-Tech Wireless.
Johnson said that Nex-Tech was still reeling from 2008 cuts in USF funding and that it has seen around $20 million in lost funding that had been set aside to increase coverage in Kansas.
''It would be very difficult to operate as a business without the USF funds,'' Johnson said. ''Without those funds our network would likely be just like our competitors, covering just the interstates and highly traveled state roads.''
Another issue concerning rural carriers is roaming, whether it's the increasing loss of voice traffic as larger carriers expand their coverage or their own access to data roaming agreements that they say larger carriers are reluctant to provide.
''Data roaming is every bit as important as voice roaming,'' said Carolina West Wireless' Stewart. ''We have seen a huge increase in data traffic. If we are not able to offer the latest and greatest handsets and the same size of a network, which is nationwide, it's difficult to compete. It's hard for consumers to stick with us.''
RCA incoming chairman Ron Smith, who is also president at Bluegrass Cellular Inc., added that the recent FCC decision on home-market exclusion adds the presumption that there should be roaming, but that until it spells out that data roaming being included, plans for national broadband coverage will suffer.
''The FCC has to realize it's still an issue out there,'' Smith said.
Industry observers agreed that roaming is still a significant issue for smaller operators, but added that they do have some power in the segment. ''Roaming is still critical for the big 4,'' said Amit Patel, CTO for Alcatel-Lucent's U.S. strategic wireless accounts. ''But, the big carriers are not looking to create roaming agreements. … T-Mobile might be more motivated, but AT&T is not.''
Patel noted that AT&T Mobility's recently reported first-quarter financial results showed continued strong customer growth for the carrier despite a strong marketing push by rival Verizon Wireless touting the lack of reach of AT&T Mobility's network.
''Those December ads against AT&T did not drive AT&T to want to fill out its map,'' Patel said.
However, AT&T Mobility's LTE plans could spell a different story. Patel noted that the carrier's 700 MHz spectrum assets are not as wide-ranging as those held by Verizon Wireless, which could lead to opportunities for rural carriers with 700 MHz spectrum in areas where AT&T Mobility is lacking.
Another potential for rural carriers is investment firm Harbinger Capital Partners, which recently closed on its acquisition of SkyTerra Communications Inc. The $1.8 billion deal includes stipulations that Harbinger use the 30 megahertz of spectrum it acquired in the deal to build out a nationwide cellular network to supplement the satellite-based services being offered by SkyTerra.
Patel noted that Harbinger will be required to cover 100 million potential customers within three years and 190 million pops within five years, and that rural wireless carriers could be good partners for the buildout. Harbinger has reportedly decided to use LTE technology for its network, and, according to media reports, has recently begun talks with T-Mobile USA Inc. as a potential customer on the network.
''Harbinger is looking at a lot of different business models,'' Patel added.
700 MHz details still up for debate
There is also increasing concern amongst RCA members that the FCC will not take a solid stand on 700 MHz spectrum interoperability, which would require carriers and device makers to make their networks and equipment compatible with the different spectrum positions in the band. This concern arose from device and equipment requirements from Verizon Wireless that included support for only its band 13 and from AT&T Mobility for its band 17 in the 700 MHz band.
This issue was originally handled by the FCC in the PCS auctions with requirements that equipment and standards for the spectrum being auctioned be interoperable with all the spectrum auctioned in the 1.9 GHz band. For the 700 MHz auction, the FCC did not mandate such interoperability.
''If you auction spectrum in good faith and allow after the plan for band plans to be developed, how do you plan for that?'' Bluegrass Cellular's Smith asked rhetorically.
Berry also noted this could be an issue for public-safety, which is set to receive spectrum in band 14 in the 700 MHz band. Without interoperability requirements, public-safety equipment might not be able to operate on other networks in the 700 MHz band.
Handset exclusivity issues is also a topic rural wireless carriers have been battling. Smaller operators have been pushing the FCC on the issue, saying that if they are not allowed to offer compelling devices to their subscribers, they will not be able to stay competitive.
''We try to differentiate ourselves with coverage and better customer service and have been pretty successful,'' noted Stewart. ''But, when you don't have access to the latest stuff, customers won't stay with you in the marketplace. Customers are choosing carriers that provide good local service, but if we don't have the latest offering, it's hard to compete. People are willing to stay with us if we are competitive.''
Smith noted that rural wireless carriers were having some success in negotiating access to some devices, but that more needed to be done.
''We've historically had exclusivity in the wireless industry, but in the past it has typically been short-lived,'' Smith said. ''In some cases that has now gone to lifetime or takes it out through the lifetime of the device. On the CDMA side, we have the Associate Carrier Group that has been very successful in getting devices, but it's not the ultimate solution. There is still an issue with 46 of the top selling handsets having some sort of exclusivity tied to them.''
Local still matters
Despite the increased competitive pressure from nationwide operators, panel members in general indicated that smaller wireless operators still had an advantage in being able to ''localize'' themselves with their customer base, an advantage they were urged to continue to take advantage of.
''The strength of rural carriers is that they are involved in their community,'' said Huawei's Jagernauth.
Alcatel-Lucent's Patel added that the involvement should include customization options that take advantage both of technology changes as well as local knowledge.
''Make your customization geared toward your customer base,'' Patel explained. ''Tie in local events with local community groups.''
8/30/2010 3:48:26 PM
Job categories experiencing the fastest growth online are marketing, IT and creative services, and the biggest demand for specific skill sets include cloud computing, mobile marketing and online marketing. Google Inc.’s Android App Engine skill, which climbed into the top 50 skill sets in the first quarter of the year, showed a 10 times increase in demand quarter to quarter, to reach spot No. 37, to become the cloud platform highest in demand in the second quarter.
“Frustrated by the traditional on-site staffing model, businesses are embracing virtual and hybrid work structures which allow them to tap into highly skilled online teams on a flexible basis. Talented workers with hot skills such as Google App Engine development, HTML5, SEO and social media marketing are experiencing unprecedented demand for their expertise and can find steady work and growing incomes,” said Ellen Pack, VP of Marketing at Elance.
Demand for skilled Apple Inc. iPad developers increased 200% in demand, to hit the No. 16 spot on the IT skills chart. Meanwhile, the iPhone skill set is now at the No. 8 position, while Android is at No. 25 and Research In Motion Ltd.’s BlackBerry app skill set jumped to the No. 36 spot.
8/30/2010 3:45:28 PM
Qualcomm Inc. (QCOM) is hiring an iPhone application developer for its new incubator lab, Qualcomm Services Labs Inc. QSL is an incubator for mobile applications, so it stands to reason the CDMA chip company would expand to popular mobile platforms like Apple Inc.’s, (AAPL) even though the iPhone today only works on GSM-based technology.
The job post is leading some websites to speculate that Apple Inc. is moving beyond UMTS technology to include the CDMA platform and that Qualcomm wants to be ready. Rumors have been swirling for months that Verizon Wireless (VZ) will get the iPhone once AT&T Mobility’s exclusive contract with Apple is over.
Qualcomm said it is looking for an iPhone developer to work on its Neer project, a geofence location-based service, which it expects to launch on several different mobile platforms. Neer is already available on the Android platform and Qualcomm said it expects it to soon be available on its own Brew MP and the App Store. QSL plans to develop mobile applications and services around communication; information and entertainment; discovery; life automation; and digital to physical experiences.
8/23/2010 2:02:44 PM
Cellular Sales, an authorized Verizon Wireless retailer, said it is expanding into Florida and Tennessee over the next four months, including opening a call center that plans to staff at least 350 employees, as part of a $6 million expansion effort.
Cellular Sales Verizon Wireless will open new stores throughout Southeast Florida in Key West, Aventura Mall, Stuart, Wellington Mall, Fort Pierce and the Lauderhill/Sunrise area. Cellular Sales already has operations in 11 locations in South Florida and more than 300 stores across the United States. Sales consultants for Cellular Sales earn an average of more than $51,000 per year, said Ann Snyder, national recruiter for Cellular Sales.
The retailer previously announced plans to hire between 200 and 250 employees to work at its national call center in Knoxville, Tenn., where the privately held company is based. The new call center expects to employ supervisors, managers and customer service representatives in full-time and part-time positions starting at $10 per hour.
“This unbelievable growth Cellular Sales is experiencing is directly related to the ultimate customer service we provide. We do things that other companies cannot or will not do,” said Jay Witherspoon of Cellular Sales. “We want every customer who purchases a wireless device in one of our 300-plus stores across the country to get a call from us within 24 hours of the time they leave our store.”
The company has grown by about 30% every year in its 17-year history, and expects to open another 50 stores by year-end. For the past two years, Inc. Magazine has named Cellular Sales one of the nation's fastest growing retailers. People interested in applying for positions at the company should call (888) 915-6624 or visit its website at www.cellularsales.com/opportunity.
8/23/2010 1:59:21 PM
Verizon Wireless said it has completed the purchase of former Centennial Communications Corp. assets from AT&T Mobility covering portions of Louisiana and Mississippi.
The $235 million purchase included Centennial’s spectrum licenses, network assets and more than 117,000 current customers in six service areas, including: Lafayette, Beauregard, Iberville and West Feliciana, La.; and Claiborne and Copiah, Miss. The additional customers helps bolster’s Verizon Wireless’ position as the nation’s largest wireless operator, though a recent report said that the position will be AT&T Mobility’s within a year.
Verizon Wireless said that beginning today it will begin serving customers in those markets, but will continue with the Centennial brand for the next several months as it begins to convert the network assets to the carrier’s CDMA-based technology. Both Verizon Wireless and AT&T Mobility have become quite adept at network integrations as they have spent the past several years gobbling up a number of regional operators.
AT&T Mobility was required to divest the markets as a requirement to receiving approval of the Centennial acquisition that was announced in late 2008.
8/18/2010 4:03:41 PM
Looking to keep its foot to the floor, LightSquared said it has delivered a notice to satellite communications provider Inmarsat plc (IMASF.PK) triggering “Phase 1” of their agreement that calls for Inmarsat to begin re-banding its L-Band spectrum covering North America.
The plan, which LightSquared said could take up to 18 months, also calls for Lightsquared to make payments totaling $337.5 million to Inmarsat over the duration of the transition. The plan was part of an agreement signed in late 2007 by Inmarsat and LightSquared's predecessor companies SkyTerra Communications Inc. and Mobile Satellite Ventures L.P. Both companies were eventually acquired by Harbinger Capital Partners.
Once completed, the re-banding will provide LightSquared with spectrum it plans to use to begin building out a terrestrial/satellite hybrid network.
“Triggering this agreement will now give us the contiguous spectrum we need to support additional network capacity to meet the growing demand for wireless data,” said Sanjiv Ahuja, chairman and CEO of LightSquared.
The company last month announced a $7 billion agreement with Nokia Siemens Networks to begin building out the LTE-based terrestrial network that will include more than 40,000 base stations and cover 92% of the U.S. population by 2015. LightSquared said it plans to wholesale access to the network.
LightSquared added that it also has the right to initiate “Phase 2” of the agreement anytime through Jan. 1, 2013, which will provide it with additional spectrum at an annual cost of $115 million. If exercised Phase 2 is expected to take up to 30 months to complete.
Inmarsat recently unveiled its first mobile satellite handset to round out its portable device offerings.
8/18/2010 4:00:05 PM
The Federal Communications Commission is being flooded with comments regarding its Further Notice of Proposed RuleMaking on plans to change rules around utility pole attachments, which among other things tries to bring the cost for telecommunications service providers to attach equipment to utility poles more in line with the costs cable providers pay.
Although the order impacts wired telecom and cable operators, wireless service providers deploying Distributed Antenna System (DAS) networks would also benefit from the new rules proposed by the FCC. As such, The DAS Forum, CTIA, NextG Networks, T-Mobile USA Inc. and other wireless industry players commented on the need for new rules. Not surprisingly, utility companies that submitted comments are generally unhappy with the proposal.
The FCC is proposing new rules for utility pole attachments as part of its National Broadband Plan, designed to bring Internet access across America, especially in rural areas. Specifically, the agency is trying to address disparity in prices utility companies charge pole attachers; timelines during the attachment process; and ways to resolve disputes in a timely manner.
The DAS Forum, a group within PCIA, proposed a 90-day timeframe for utility companies that do not have a standard for wireless pole attachments to work with wireless companies to establish a standard.
The Forum also addressed cost disparities. “The commission must affirm that wireless attachers are subject to the telecom rate and not monopoly rates. DAS Forum members report a wide disparity in the rate charged for wireless attachments, ranging from tens-of-dollars to over a thousand dollars per year. There is no justification for a utility to charge these illegal rates that are significantly above the regulated rate for wireless attachments. While a wireless attachment may occupy more space than a wired attachment, and therefore proposes that the wireless attachment rate should be equal to the telecom rate times that amount of usable space occupied above one foot.”
TW Telecom and Comptel, which represents competitive local access communications providers (CLECs) , said the FCC needs to be able to fine utility companies that do not comply with the new rules. “To begin with, the record shows that utilities continue to insist on including in pole attachment agreements provisions that have been deemed unlawful by the FCC, and utilities often engage in other conduct that has been deemed unlawful by the FCC. The utilities apparently believe that they have little to lose by ignoring FCC decisions.”
In a 110-page filing, The Alliance for Fair Pole Attachment Rules – a coalition of large utility companies including Duke Energy Corp. and Southern Co. – said the FCC's proposed rules do the opposite of the intended purpose. “In stark contrast to the Alliance's recommendations, the FNRPM does precisely the opposite of what the Commission's own findings warrant: it focuses almost exclusively on pole owners, without distinguishing between electric utilities (who have only the best interests of their own ‘infrastructure at heart') and ILECs (who ‘can make no such claim.') "
A group of utility companies calling itself the Coalition of Concerned Utilities said the FCC's proposed rules do not take into account the safety of its workers or the true cost to the utility when allowing attachments to their poles. “For decades, communications companies have attached their facilities to tens of millions of utility poles across the country without incurring the substantial cost and inconvenience of constructing and maintaining their own distribution systems. In return for making their internal distribution systems available to attachers, utilities have been ‘rewarded' with unfair and discriminatory pole attachment rates, countless unauthorized attachments, myriad safety violations and innumerable administrative burdens. Electric utilities should not be required as a matter of public policy to jeopardize the safety and reliability of their systems or to subsidize the deployment of broadband or other services for the benefit of third party communications companies under any conditions, much less ones that would have little practical benefit. Even if they made sense from practical and policy perspectives, most of the Commission's proposals exceed its statutory authority.”
The Public Utilities Commission of Ohio suggested the FCC adopt a plan similar to its in which disputes must be addressed in a hearing within 30 days and a ruling must be issued 30 days after the hearing.
8/9/2010 11:23:07 AM
Looking to venture successfully where others have struggled, Harbinger Capital Partners’ Lightsquared venture has many in the industry scratching their head. This has not deterred the Lightsquared squad in the least as the company appears very confident in its chances to compete in a highly competitive market.
The biggest question about Lightsquared’s plan is whether there is a market for the carrier’s planned wholesale data network. Previous attempts at constructing such networks have failed to generate sustainable business models either due to an inability to attract and keep wholesale partners that can generate enough traffic and revenue as well as companies that quickly balked at the costs needed to construct and operate a mobile network.
Having already announced its ambitious build out plans, the company appears undaunted by the challenges.
“We are wholesale only,” explained Frank Boulben, Lightsquared’s chief marketing officer in an interview with RCR Wireless News. “Each dollar we raise will go back into our network. No money is going into marketing or call centers. Our business will be very lean.”
Lightsquared thinks this leanness will allow the company to succeed in a market where others have failed.
“The U.S. is an exception in the developed world,” Boulben explained. “In other parts of the world you have very vibrant MVNO and wholesale models. The primary reason it has not worked in the U.S. is due to wholesale economics. We are developing the next generation of technology on a greenfield build so we have the best economics, we have broad coverage, very high level service quality, low cost because we will benefit from 4G LTE advantageous spectrum position and a contract with NSN that was won through a competitive bidding process.”
Boulben added that the wholesale-only model is important as it frees any potential conflict with customers, a conflict Lightsquared said it has heard from companies is one of the reasons they have yet to attempt to enter the mobile space.
“We are only successful if our partners are successful,” Boulben said. “Our business plan is built on market share, and with our cost structure we don’t need a lot of market share to be successful.”
The wholesale only mantra is counter to how Clearwire Corp. is running its network as the carrier offers both a branded offering as well as an avenue for others to offer mobile services. Clearwire, which is also looking to attract wholesale customers to its current WiMAX-based network, noted during its recent second quarter conference call that while direct customers that have signed up for its “Clear”-branded service make up just over half of its 1.7 million strong customer base, those customers constitute a vast majority of its service revenues. This is due to the fact that each direct customer generates more than $40 per month in service revenue, while it only receives a portion of the revenue from customers through its wholesale partners.
But, by having to support its direct customer base, Clearwire is forced to invest in marketing and customer support that Lightsquared is looking to avoid. Clearwire has hinted that at some point it would like to reduce the prominence of its branded offering in favor of a greater reliance on its wholesale partners.
In addition to staying out of the retail fray, Lightsquared also said it will allow its customers to deploy their own voice offering using its data network.
“Our network will be completely net neutral,” Boulben explained. “If a customer wants to run a peer-to-peer VoIP application or streaming video they will be free to do that. We will just charge on a price per megabyte basis. … Voice will just be a data application.”
Boulben added that this will allow customers to provide their own voice offering, but that it would also step in to provide a white label service for those that ask.
Capacity not a concern
Lightsquared is also confident that its spectrum position and that its choice of spectrum and technology will be a benefit in the current mobile climate.
“We have more spectrum than the other two LTE providers and we are starting from a market share that is zero,” Boulben said. “It’s highly unlikely that we will have any spectrum concerns with our market share perspectives. We think we would need more than double our market share expectations to have any concerns about spectrum.”
Lightsquared said it feels fortunate to be launching services at this time as the backhaul market is exploding with new fiber capabilities that are tailored made for high-speed data networks. The company expects more than 60% of its estimated 40,000 cell sites to have fiber backhaul.
Lightsquared also noted that unlike previous attempts to build out such wholesale networks, the expected capacity crunch forecast by many due to increased mobile data usage means the timing is right for bringing more capacity to the market.
“We can help satisfy that demand,” Boulben said. “Other operators will not have that capacity in the next five years.”
Satellite part two
While satellite communication services have had a rocky history in trying to compete with traditional land-based cellular systems, Lightsquared sees its ability to tap into that option as an early benefit.
“We think the satellite component provides us with a number of advantages,” noted Boulben. “First is that from day 1 we will be offering 100% population coverage of the continental United States. Anywhere you can see the sky you can make a call or send a text.”
Boulben also said that the satellite feature will provide a boost for rural coverage, an issue that still plagues land-based services.
Boulben explained that while the carrier is high on the benefits of the satellite services ability to bolster its traditional cellular network, Lightsquared will be leaving it up to its customers as to whether they want to integrate satellite into their service offerings.
“It’s very important to realize that we are in the wholesale business only,” Boulben said. “It’s up to our partners as to what they want to offer. If they just want land-based services, we will offer them that.”
Despite the broad coverage made possible by satellites, Lightsquared realizes that it will have to rely initially on roaming agreements with traditional cellular operators to bolster its cellular coverage to a depth that customers have accustomed to. The company said it was in discussions on reciprocal roaming agreements that it expects to close in the next six to nine months and that those deals could involve both 4G and for the short term 3G coverage. Boulben hinted that the 3G deals would likely be for HSPA+ services.
Another topic analysts have expressed concerns about is Lightsquared’s ability to convince equipment makers to produce devices and chipsets compatible with the carrier’s unique network requirements. To gain full access to Lightsquared’s network assets a device would have to provide support for satellite communications and LTE technology using the carrier’s 2 GHz spectrum as well as any technology or spectrum needed to access roaming services.
Satellite communications provider TerreStar Networks Inc. has begun offering a dual-mode cellular/satellite smart phone through a partnership with AT&T Mobility that can access either the company’s satellites or AT&T Mobility’s GSM/GPRS/EDGE/HSPA network.
Analysts have noted that Lightsquared’s success could ride on its ability to begin seeding the device ecosystem to attract potential customers.
“This will be a big challenge for Lightsquared,” said Larry Swasey, co-founder of Visant Stategies. “It will be a chicken-and-egg scenario. They have to be able to show to customers that device makers are indeed willing to make devices to meet the network needs before they will sign on. And device makers are only going to be interested in making these devices is they can be guaranteed scale in the millions of units.”
Lightsquared appears set for that challenge noting that it has contracted with three handset vendors to produce devices and is close to signing up two more.
“We plan to announce these in the fall,” Boulben said. “The initial devices will be data centric; data cards, netbooks, embedded modules, personal hot spots and wireless routers. Later we will announce smart phones.”
8/2/2010 1:44:57 PM
Capital spending on wireless infrastructure is set to rise in 2011 as global operators build out fourth-generation networks, according to iSuppli Corp. Following two years of less spending worldwide, operators are expected to spend a collective $40.3 billion on wireless network equipment next year, up 6.7% from 2009.
In the short term, capital spending is expected to continue to decline this year to $37.8 billion, a trend that began in 2009 as carriers slowed infrastructure spends in light of the global recession and as they tried to recoup their investments on 3G and 3.5G technologies. Capital spending on infrastructure accounts for about 30% of an operator's total capital outlay, the research company said. While 2011 will be the first year to see an increase in capital spending, operators will continue to invest in their networks through 2014, spending more than $43 billion that year, iSuppli predicted.
“The upturn in 2011 signals renewed commitment within the wireless industry to move on expansion plans that had been delayed or put on hold because of the global recession,” said Dr. Jagdish Rebello, senior director and principal analyst for wireless research at iSuppli. “Starting in 2011, wireless carriers in industrialized countries will start to deploy 4G in order to attain faster speeds and to unclog the heavy data traffic generated by the exploding use of smart phones. This 4G-driven growth in capital spending will continue at least through 2014.”
WiMAX technology will remain a niche protocol, as most operators choose to deploy LTE networks, iSuppli predicted. Further, operators will begin to implement tiered data pricing in order to pay for their capital investments.
While Western Europe, Japan and the United States will push forward with 4G deployments, Latin America, China, India and the rest of the developing world will focus on expanding geographical coverage of their networks to improve wireless penetration. Some operators may choose to share networks in order to reduce their capital outlays, iSuppli said.
8/2/2010 1:42:45 PM
Alcatel Lucent (ALU) posted a second-quarter loss but reaffirmed its full-year outlook with nominal growth of between 0% and 5%, despite continued component shortages. Like its competitor Ericsson, (ERIC) Alcatel Lucent revenues were buoyed by wireless development in North America. A-Lu and Ericsson are primary network providers for both Verizon Wireless and AT&T Mobility as they build out LTE networks.
Q2 revenue increased more than 17% sequentially to $4.9 billion, but was down more than 2% from the same period one year ago, but the network firm reported a loss of $240 million. “Networks saw a year-over-year single-digit decline in revenue, driven by fixed access, switching and optics. This has been partially offset by continued strong growth in IP and W-CDMA,” according to the company.
I am pleased with the continuing progress in our transformation journey, illustrated in the second quarter both by the top line and profitability. Revenues for the quarter reflect the on-going and expected overall improvement in market conditions and the good traction of our product portfolio. This is notably highlighted by the good performance in IP and wireless and, from a geographic standpoint, by strong growth in North America,” said CEO Ben Verwaayen.
The company’s wireless division revenues saw a 5% increase from a year ago, driven by its W-CDMA business. “Our W-CDMA business was the key driver of that increase with another quarter of near 50% year-over-year growth driven primarily by the North American market. A very strong sequential increase in our CDMA business reflected spending to accommodate data traffic growth on 3G CDMA (EV-DO) networks, and the year-over-year decline in our GSM business eased to a single digit rate.” Its applications business saw a 5.8% increase in revenue, while its services business saw a 1.1% increase in revenue. However, declining revenues in its wireline business contributed to the quarterly loss.