SK Telecom

ALSO NOTED: Aruba ships 10,000th 802.11n access point; mobilkom claims world's fastest HSDPA data call; and much more...

Mon, 12 May 2008 06:59:51 -0400

> Aruba Networks announced it has shipped its 10,000th 802.11n access point. Release

> Austrian mobile carrier mobilkom claims to have carried out the world's fastest HSPA data call. Article

> SK Telecom says its not in talks with Virgin Mobile over a possible sale of Helio. Article (WSJ sub. req.)

And Finally... Ofcom outlines future wireless vision Article

Where does EarthLink go from here?

Mon, 11 Feb 2008 06:59:58 -0500

Last year in July I questioned whether EarthLink would become a model of success in the muni-WiFi and MVNO market or an example of a company that took too many risks. It appears the latter has happened.

Wireless was supposed to represent a new frontier for EarthLink, which was looking for ways to offset its dramatically declining dial-up customer base. It was EarthLink's former CEO Gary Betty who had the original passion and vision to see the new businesses through, but he died in January 2007. Current CEO Rolla Huff came in and cleaned house.

It's not that anyone could blame him. The company was losing money from these initiatives. EarthLink's most recent earnings report said it lost $80 million in 2007 from municipal operations, including a $28 million impairment charge that wrote down the municipal assets' goodwill. The ISP also took an $111 million hit from Helio, its MVNO joint venture deal with SK Telecom. It would have taken significant time for EarthLink to find the right business model for muni-WiFi, and a company whose core business isn't wireless doesn't have the time nor the funds to experiment.

But where does EarthLink go from here? Virtually all of EarthLink's businesses aren't faring well. Dial-up customers continue to decline and its broadband business is struggling. Despite losing $54.8 million in 2007 and experiencing a drop in customers by 27 percent, Huff was able to show Wall Street some progress in the fourth quarter: operating income of $22.6 million compared with a loss of nearly $18 million the previous year. And after repurchasing 10.1 million shares of its own stock, it is forecasting "record income from continuing operations" for 2008.

Huff may be able to keep Wall Street happy with all of his cost cutting in the short term, but he still must address the fact that his company's core business is floundering. Will the company look for another wireless opportunity to grow or simply become a small regional version of itself?--Lynnette

EarthLink officially pulls plug on muni-WiFi business

Mon, 11 Feb 2008 06:59:57 -0500

Not surprisingly, EarthLink has officially pulled the plug on its muni-WiFi business. The ISP revealed in November that it was mulling an exit from the business and was actively looking for a buyer. The company revealed during its fourth-quarter results that it is writing down a $20.7 million charge on discontinued operations related to the muni-WiFi assets.

"We made the decision to stop any further market rollouts and substantially reduce the cash being spent on this initiative while we search for ways to make the model viable," CEO Rolla Huff said during a conference call. "We'll continue to provide service to people currently on the networks until disposition of the assets in the various communities has been accomplished. We're actively working to determine if there are viable outside buyers for the assets or if the cities themselves are interested in the assets. We are looking to come to a solution with the municipalities that work for them and reduces our future spending obligations."

The question is: Who wants to buy these assets? EarthLink's earnings report said it lost $80 million in 2007 from municipal operations, including a $28 million impairment charge that wrote down the municipal assets' goodwill, essentially. The ISP also took an $111 million hit from Helio, its MVNO joint venture deal with SK Telecom. However, gross revenue was $1.2 billion.

For more about EarthLink's muni-WiFi business:
- read this article from RCR Wireless News
- take a look at this report from WNN Wi-Fi Net News

Related Articles:
EarthLink could dump Philadelphia muni-WiFi Report
Earthlink may bow out of WiFi altogether Report
Who would buy EarthLink's muni-WiFi business? Editorial

Is WiMAX a service complement for mobile operators?

Thu, 07 Feb 2008 06:59:58 -0500

A new report from In-Stat says WiMAX is more of a service complement than a competitive threat for mobile operators. The research firm says the debate can be broken down into two camps.

"One camp led by select equipment vendors with no stake in WiMAX has taken an either/or approach to discussing mobile WiMAX," said In-Stat analyst Daryl Schoolar. "Any gain by WiMAX comes at the expense of other 3G data technologies. In the other camp, infrastructure vendors like Alcatel-Lucent, Motorola, and Nokia Siemens see a world where multiple mobile wireless broadband technologies will co-exist. In-Stat believes that the latter camp's view will prevail."

In-Stat backs this up for a few reasons. First, since the technology has been accepted by ITU, that move will open new markets for WiMAX. And mobile WiMAX will be more successful with laptops and other consumer electronic devices than in phones, offering new revenue opportunities for existing mobile operators.

Indeed, many WiMAX advocates have always touted WiMAX as a complementary technology. But when companies such as infrastructure giant Ericsson and leading chip vendor Qualcomm aren't in the WiMAX camp, WiMAX becomes a competitive threat to HSDPA and LTE.

Interestingly, Rupert Baines, vice president of marketing with picoChip, a leading WiMAX base station semiconductor company, says the market has already evolved to the point where WiMAX isn't a competitive threat since it is serving different groups of operators. He notes that most of the W-CDMA community will evolve to 4G LTE while the world's major CDMA operators, with the exception of Verizon Wireless, are going for WiMAX since we've seen Sprint, Japan's KDDI and Korea's SK Telecom deploy WiMAX. "UMB (the 4G path for CDMA) doesn't even count as the walking dead anymore," noted Baines. --Lynnette

Sprint rejects bailout bid

Mon, 03 Dec 2007 06:59:57 -0500

According to a report in the Wall Street Journal, Sprint rejected a $5 billion investment from SK Telecom and PE firm Providence Equity Partners that also included installing Sprint's former chairman Tim Donahue as CEO of the company. Donahue and the PE firm proposed the deal to Sprint in a letter dated Nov. 10, according to the report, but Sprint did not grant the former chairman or the firm a meeting to discuss the proposal before declining.

Donahue was the CEO of Nextel who negotiated the carrier's $35 billion sale to Sprint in 2004 before becoming chairman of the merged company. He stepped down as chairman about a year ago. Donahue says he was prepared to bring in a fresh crop of executives to revamp Sprint Nextel's marketing and operations teams. Some Sprint Nextel directors, however, are not eager to invite Donahue to lead the company again because Sprint has performed poorly since its merger with Nextel. That camp blames Nextel's network as the core of its problems, while many former Nextel board members blame Sprint's bureaucratic style. Still others are pushing for an outsider to come in and lead the company, like Embarq's Dan Hesse.

For more on the deal that never was:
- read this article from the WSJ

SK Telecom 'reluctantly' expanding WiBro in Korea

Mon, 26 Nov 2007 06:59:55 -0500

Reports coming out of South Korea indicate SK Telecom is reluctantly expanding its WiBro service because of pressure coming from the government. The service has attracted less than 1,000 users so far. The operator is now trying to figure out a long-term business plan for the business and will increase the number of "Hot Zones" from 56 in 23 cities that include Seoul and the metro district to more than 100 in 42 cities by next year. The operator also plans to upgrade the network to Wave 2, which should double speed and capacity. In a market that has HSDPA services from SK Telecom and EV-DO Rev, a services from LGT and other operators, selling WiBro has to be a significant challenge. It doesn't appear that SK Telecom nor competitor Korea Telecom have marketed the technology very aggressively.

For more:
- read this article from Telecoms Korea
- see this posting from Techdirt

Earthlink may bow out of WiFi altogether

Mon, 19 Nov 2007 06:59:57 -0500

After cutting 900 jobs and closing several offices in August, Earthlink now is mulling an exit from the muni-WiFi business altogether. In a statement on Friday, CEO Rolla Huff said the company "decided that making significant further investments in this business could be inconsistent with our objective of maximizing shareholder value." Earthlink has long been looking to stem losses associated with its muni-WiFi business and its MVNO joint venture, Helio, with SK Telecom. In September, the company indicated it wouldn't invest anymore in Helio for now and revealed that partner SK Telecom will invest an additional $270 million in the MVNO.

Since August, Earthlink has bailed out of a deal to provide WiFi service to San Francisco and Houston. While Cincinnati halted plans for a muni-WiFi network amid Earthlink's struggles.

The ISP said it is looking at "strategic alternatives" (aka selling) for the WiFi division, which it said was worth about $40 million. As it considers the alternatives, the company said it would work closely with cities it already has deals with.

To read more:
- check out this article from AP

Related articles:
Muni-WiFi market shakeout? Report
Earthlink drops out of SF WiFi deal Report

EarthLink ends Helio funding for now

Mon, 24 Sep 2007 06:59:56 -0400

EarthLink, which has been struggling with its investments in muni-WiFi and MVNO Helio, has indicated it won't invest anymore in Helio for now and revealed that partner SK Telecom will invest an additional $270 million in the MVNO.

Helio, founded in 2005 and launched last year, is spending a lot of cash as it ramps up operations. It is expected to lose between $340 million and $360 million this year, according to EarthLink. Last month to ISP let go 900 employees amid steep losses in the second quarter.

For more about SK Telecom's additional investment:
- read this article from IDG News Service

Related articles:
EarthLink struggling with wireless initiatives
Report: New Earthlink CEO could cut Helio
EarthLink CEO devoted to Muni Wi-Fi and Helio
Helio's struggles show risks of serving niche markets

Earthlink struggling with wireless initiatives

Mon, 30 Jul 2007 06:59:57 -0400

Two of Earthlink's high-speed wireless initiatives are coming to a head for the ISP. During the company's second-quarter conference call last week, Earthlink President and CEO Roll Huff acknowledged that his company's approach to the muni-WiFi market is not working. To make sure the company gets a return on its investment, he wants "municipal government to step up and become a meaningful anchor tenant on completion of a build."

The announcement is similar to how MetroFi has changed its strategy by pursuing a path that requires anchor-tenant commitments from municipalities to ensure that MetroFi can make money in the market. Earlier this year, EarthLink revealed it was pulling back on its muni-WiFi business to focus on its existing contracts and larger cities for the rest of the year.

Meanwhile, Earthlink's MVNO joint venture with Korean operator SK Telecom continues to bleed money. Thanks to Helio, EarthLink posted a loss of $16.3 million in its second-quarter filing, down from a profit of $16.6 million this time last year. Revenue for the quarter fell 6 percent to $312.2 million, down from $332.1 million a year ago.

Reports circulated a few weeks ago when Huff first took the helm as CEO that he might cut Helio, but EarthLink SK Telecom are making good on their promise to each invest an additional $100 million in the MVNO. Both partners have already approved respective initial funding of $30 million.

For more about Earthlink's wireless woes:
- read this blog from MuniWireless
- check out this press release