MVNO

Sprint, iPCS headed back to court over WiMAX

Lynnette Luna — Tue, 06 Jan 2009 23:54:41 -0500

Sprint and iPCS are headed back to court this year after an Illinois court last week ruled a 2006 decision on whether Sprint's acquisition of Nextel violated its exclusivity agreement with iPCS also applied to Sprint's WiMAX operations.

"Sprint and those acting in concert with Sprint may not compete against iPCS in iPCS's exclusive service areas," Cook County Circuit Judge Kathleen Pantle said in her ruling.

iPCS has claimed it holds exclusive rights to market Sprint products in certain areas in Illinois, Iowa, Michigan and Nebraska, along with bordering parts of Indiana and Missouri. At the trial, set for March 30, the court will determine whether Sprint actually has control over the new Clearwire, formed when Sprint and Clearwire combined their WiMAX assets, and if exclusivity agreements apply if Sprint acts through a related party.

Sprint has indicated it will act as an MVNO to sell Clearwire's WiMAX service under the brand "Sprint 4G." This ruling will not be enforced until another Cook County Circuit judge, the one who made the original 2006 ruling, decides on a claim by Sprint to dismiss that ruling based on new evidence.

For more:
- check out the Daily Herald

Related articles:
iPCS thwarted; Sprint can move ahead with Clearwire
Court halts Sprint-iPCS suit over WiMAX

A breakdown of the Sprint-Clearwire deal

Thu, 08 May 2008 06:59:57 -0400

After months of rumors and speculation, the deal that the mobile WiMAX industry has been hoping for finally became a reality. Sprint and Clearwire announced that they will be combining their WiMAX businesses and creating a new company that will include a $3.2 billion investment from Intel, Google, Comcast, Time Warner Cable, Bright House Networks and Trilogy Equity Partners. The deal is complex, so here's a breakdown of the key elements:

The "new" Clearwire: The new company will be named Clearwire. It will include Sprint's Xohm unit. Sprint will contribute its 2.5 GHz spectrum to the new Clearwire in exchange for an ownership stake in the new company. Clearwire CEO Ben Wolff will be the CEO of the new Clearwire. Barry West, Sprint's CTO and Xohm business unit leader will be the president. The new company will include staff from both the existing Clearwire and Sprint Xohm business unit. Headquarters will be in Kirkland, Wash., with significant presence and R&D in Herndon, Va.

MVNO deals: Comcast, Time Warner, Bright House and Clearwire will operate as MVNOs selling Sprint 3G services. But unlike the former Pivot JV, these players will sell the 3G wireless services using their own brand names. Once the 4G WiMAX network is built, Comcast, Time Warner, Bright House and Sprint will be MVNOs on the Clearwire network.

Sprint's role: Sprint won't be involved in the day-to-day operations of Clearwire but as the largest shareholder it will have input on the portfolio and the go-to-market strategy.

Intel: Intel will work with manufacturers to embed WiMAX chips into laptops and devices. It will also have the option to enter into a 3G or 4G wholesale agreement with Clearwire and Sprint if it wants too.

Google: Google will partner with Clearwire on an open Internet business model. Clearwire will support the Android operating system. In addition, Google will be the default provider of Web and local search on Sprint's network and Sprint will preload several Google services including Google Maps for mobile, Gmail and YouTube. Like Intel, Google will have the option to have a 3G or 4G wholesale agreement with Clearwire or Sprint if it wants too.--Brian Dolan

For more details
- see this press release

Related articles:
Read this timeline of the Sprint/Clearwire WiMAX deal
Check out this chart depicting Clearwire's new spectrum position

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 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

Helio to cut 100 jobs

Tue, 04 Sep 2007 06:59:53 -0400

MVNO Helio, which is targeting the young and savvy segment of the market with high-speed data services, confirmed reports that it cut 100 jobs in an effort to streamline operations and refocus its sales team on direct sales, according to a report from GigaOM. Helio has 700 employees before the cuts. Most of the cuts will come from sales teams and Helio's headquarters will reportedly remain largely intact.

According to Helio's spokesman Rick Heineman, the MVNO also plans on increasing its kiosks from 30 to 50. Heineman said the company had its best month in July and is still on track to do $100 million in revenues.

For more on Helio's cuts and future plans:
- read this article from GigaOM

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