Verizon Wireless

As 3G laptops become must-haves for enterprise, how will operators respond?

Mon, 02 Jun 2008 06:59:58 -0400

Gartner is predicting that laptops embedded with 3G are likely to become a must-have for the business world beginning next year because new technologies--namely those that incorporate various frequencies for better coverage--and better pricing plans are making them more attractive. Today, the high cost hardware and expensive monthly charges have so far kept the enterprise from investing in laptops embedded with 3G. But that is expected to change.

Does that mean operators will be pushed to lift the 5 GB per month cap they currently have in place on their "unlimited" laptop data packages? Both Verizon and AT&T have a 5 GB cap on unlimited usage while Sprint has no cap but is rumored to be instituting one shortly.

As attractive as the wireless data enterprise market is, 3G operators are in a bit of a conundrum when it comes to mobile Internet access as voice capacity--still the bread and butter of this business--is being sacrificed for high-speed data services. As such, it's difficult to offer a truly unlimited high-speed data plan. That's why Verizon and others have never positioned 3G as a replacement for DSL.

As the enterprise becomes more attracted to 3G-enabled laptops because of the reasons Gartner outlines, usage will surely skyrocket. You have to think that enterprise customers will use the service even when they aren't traveling.

In March, iPass released a new survey that measured 3G enterprise usage in 2007, giving insight into how the enterprise market is shaping up. It found monthly usage increased steadily throughout the year, growing from an average of 152 MB per user in the first quarter of 2007 to 190 MB in the fourth quarter. Of those more established users who had been on the service since January 2007, monthly usage averaged 188 MB in Q1 and 225 MB in Q4, indicating that usage seems to rise with experience.

At the extreme, a small number of users exceeded 2 GB of usage in a given month. These heavy users accounted for less than one half of one percent of all users in the sample and were offset by the 32 percent of business people who used an average less than 50 MB in a month.

Of course, those statistics come from the encumbered environment Gartner mentioned. Clearly, operators have to be careful about the traffic mix in their networks, but they certainly don't want to alienate the valuable enterprise user either. It will be interesting to see how they tackle the issue going forward. Will femtocells in the enterprise and where business people travel to be the answer? Or will it be 4G?--Lynnette

Alltel chooses LTE for 4G

Mon, 19 May 2008 06:59:55 -0400

In a move that is not surprising, Alltel announced it was committed to evolving its network to LTE during the next five years. The decision isn't surprising given the fact that Alltel typically follows in Verizon's footsteps when it comes to technology decisions. Earlier this year Verizon committed to the LTE standard to align itself with partner Vodafone.

"We do currently plan to move towards LTE in the three-to-five year timeframe vs. WiMAX, but we're still early in that," Alltel President and CEO Scott Ford said during the operator's first-quarter conference call.

Alltel's COO Jeff Fox, however, noted that the carrier won't be talking seriously about LTE this year. "We are working through our planning phase and will be talking to our board about all that over the next two quarters," Fox said. "Certainly there's no money for 4G evolution anytime in our near-term plans, and so I think from a cash-flow perspective you should not expect to see us talking about 4G anytime at least in 2008." Plus, does Alltel have enough spectrum to deploy LTE? The operator didn't win anything at the 700 MHz auction.

For more on Alltel's LTE choice:
- read this RCR article

Verizon, Google spar over open access again

Mon, 12 May 2008 06:59:54 -0400

After Google filed a petition with the FCC, insisting that the regulator put in place stricter terms for Verizon Wireless' C Block 700 MHz open access provisions, Verizon Wireless claimed the petition had "no legal basis." The carrier plans to file its own petition with the FCC soon, but noted that "it's really no surprise that despite not winning spectrum, [Google] continue[s] to try to change the rules and further their own business interests through the regulatory process." The carrier said it knew the rules before it took part in the auction and "of course" they will abide by them, but if it doesn't the carrier points out that "Google or anybody else..." can use "legitimate and expedited ways to address that."-Brian Dolan

For more on Verizon's response:
- read this article from Verizon's policy blog

Sprint's backhaul conundrum

Mon, 05 May 2008 06:59:58 -0400

Last month Sprint Nextel said provisioning of backhaul is the primary hold-up to the operator's nationwide deployment of mobile WiMAX. Sprint, which was supposed to launch its Xohm network in April, is having difficulty finding high-capacity transport links to connect cell sites as typical T-1 lines that feed today's mobile networks are inefficient for high-speed wireless broadband data.

The problem is that the majority of Sprint's sites today are T-1 lines, and there just isn't a lot of fiber and microwave options available across the country. The link between the local area network and local fiber ring is still challenged by older technology and poor coverage, offering limited access to high-capacity connections. The use of microwave is still limited to operators' highest density sites as they have traditionally rolled it out on as-needed basis.

Most experts believed that Sprint was going to initially start out with T-1s for backhaul of the WiMAX network since it was readily available, eventually migrating to backhaul technology capable of dealing with high-speed broadband data. Perhaps Sprint decided the quality of WiMAX was at stake, and now it finds itself scrambling for alternatives. Suppliers are short in this area because they haven't seen the demand coming from operators and because T-1 lines are a highly lucrative business.

With AT&T and Verizon rolling out Long Term Evolution in two years, we'll begin seeing a big demand T-1 alternatives, although these two landline companies can leverage the much of the fiber networks they have. The dark horse is cable. With a deep penetration of fiber, they could be powerful partner for a company like Sprint, but have yet to make any significant moves in the area.

The next few years should see an explosion in alternative backhaul technology providers, making the traditionally boring business quite interesting--Lynnette

NextWave selling big swathes of spectrum

Mon, 28 Apr 2008 06:59:58 -0400

Just in time. Last week NextWave announced it enlisted the help of Deutsche Bank and UBS to assist in the sale of its vast U.S. spectrum holdings, which include licenses and lease rights for a total of 4.7 billion MHz/pops of spectrum comprised of 154 AWS licenses in the 1.7/2.1 GHz band, 30 WCS licenses in the 2.3 GHz band, and 39 EBS and BRS licenses and spectrum leases in the 2.5 GHz band.

With the last of the so-called beach front spectrum--the 700 MHz airwaves--being auctioned and swallowed up primarily by AT&T Wireless and Verizon Wireless, NextWave has received multiple offers for its spectrum assets, NextWave President and CEO Allen Salmasi said.

For sure, NextWave will be able to get top dollar for the spectrum now that the FCC doesn't plan to release anymore spectrum, and there are still a number of companies chomping on the bit to get their hands on spectrum. NextWave's state mission in the past was to make spectrum available to companies that wanted to enter the mobile broadband space and use its products and technologies, including WiMAX and TD-CDMA. Today, NextWave says it no longer needs this spectrum in order to reach its product sales objectives.

NextWave's sale could give WiMAX the bigger U.S. foothold that the technology's proponents were hoping for with the 700 MHz auction. LTE, not WiMAX, emerged as the big technology winner in the 700 MHz band as AT&T and Verizon announced their intentions to deploy the 4G technology in the major swathes of spectrum they won.

While not announced by the WiMAX Forum, sources close to the forum say an FDD profile for the AWS band in the U.S. is imminent as is one for the 2496-2690 MHz band, which is reserved for broadband services in the U.S and in many European countries such as the UK. SpectrumCo, the joint venture formed by Sprint (which withdrew from the consortium in August) and cable heavyweights Comcast, Cox, Time Warner and others, purchased $2.37 billion worth of spectrum in the AWS band last year and has yet to announce its plans for the spectrum. But sources say WiMAX equipment is now being tested for this band. Moreover, speculation is that Comcast might be mulling an entrance into the wireless broadband market as a network operator.--Lynnette

How much spectrum do AT&T and Verizon have?

Mon, 28 Apr 2008 06:59:57 -0400

In just how many markets do AT&T Mobility and Verizon Wireless exceed 95 megahertz of spectrum? Since spending a collective $16 billion in the recent 700 MHz auction, analysts have believed the two now hold more than 95 megahertz of airwaves in several markets. The FCC is looking at at whether it should request winning bidders to dispose of some of that excess spectrum.

But according to a report in RCR Wireless News, concerns may have been overstated over the number of markets where the two operators exceed 95 megahertz. Based on the publication's interviews and research from investment firms, AT&T and Verizon do not appear to have exceeded the FCC's 95 megahertz spectrum screens in as many markets as have been suggested by Congress. However, it appears the two exceed the 95-megahertz threshold in more than a dozen large and small markets. The FCC uses a 95-megahertz screen to scrutinize spectrum holdings and mergers. The screen was applied at a higher level in the FCC's approval of AT&T Mobility's purchase of Dobson Communications last year.

According to analysis from Alan Weissberger with DCT Advisors, AT&T or Verizon exceeds the 95 megahertz threshold in eight of the top 10 U.S. markets, 17 of the top 25 markets and 38 of the top 100 markets. See his chart of these markets here. In the Dallas-Fort Worth market, for instance, AT&T now holds 124 megahertz of spectrum.

For more about the vast spectrum holdings of Verizon and AT&T:
- read this article from RCR Wireless News

Related articles:
Could the 700 MHz auction trigger spectrum caps? Editorial on 700 MHz auction
Leap's testimony on the 700 MHz auction

Could the 700 MHz auction trigger spectrum caps?

Mon, 21 Apr 2008 06:59:58 -0400

Could the recently completed 700 MHz auction trigger spectrum caps--which were lifted in 2003--and other regulations on the mobile wireless industry?

Last week, some in Congress lamented that AT&T and Verizon Wireless walked away with the lion's share of the licenses. AT&T and Verizon Wireless spent $16 billion, or 85 percent of the total money raked in from the auction. Analysts believe the two now hold more than 95 megahertz of spectrum in several markets.

According to an article in BusinessWeek, FCC Chairman Kevin Martin told members of Congress during a hearing last week that he will look at whether the FCC should request winning bidders to dispose of some of that excess spectrum.

But Martin also found himself defending the auction and arguing against the notion that AT&T and Verizon won the lion's share of licenses. He pointed out that congressional leaders and other various parties had plenty of time last year to assist the FCC in crafting the auction rules. He also noted that small and rural providers won 500 licenses covering nearly 60 percent of the spectrum available outside the top 15 markets, in certain slices of spectrum that were available for sale at the auction. A total of 99 bidders other than Verizon and AT&T won 754 licenses-representing almost 70 percent of the licenses sold. And a bidder other than Verizon or AT&T won a license in every market.

Still, Verizon and AT&T spent the bulk of the money at auction. And that is to be expected. Simply put, these two incumbents have the wherewithal to spend billions on licenses and billions more to build out network infrastructure. That's their core business. And with the 700 MHz band the last of the so-called beach-front property, these operators were prepared to drive the price up to a hefty level, especially given the fact that new 4G networks need a nice chunk of extra spectrum, about 20 megahertz, to deliver the broadband data speeds that are advertised.

The FCC has tried in the past to make special concessions for new and smaller entrants with disastrous effects. The PCS C-block auction resulted in bankruptcies and a number of companies essentially serving as shell companies for large incumbents.

In the wireless broadband world, I'd have to say that we are seeing some smaller companies find their niche. TowerStream is offering pre-WiMAX in several markets, successfully targeting the enterprise market with services that fixed incumbents can't offer. Xanadoo has spectrum in the 2.5 GHz band and is targeting consumers and small- to medium-sized businesses with WiMAX services to compete with DSL and cable offerings. The ISP offers seven different pricing plans beginning at $15 per month with plans to soon launch a prepaid wireless broadband offering. This large number of pricing plans is how Xanadoo is differentiating itself from DSL and cable, which typically only offer two different plans and require bundling of services.

And many winners of 700 MHz spectrum have varying business plans, with CenturyTel, for instance, using wireless to extend DSL over rural areas. Some will offer TV services. We have yet to hear about many of the winners' business plans.

In light of this, it's too early for the FCC to make any rash decisions about placing additional regulations on the mobile industry. And Congress should wait to see what the impact of the 700 MHz auction will really be.--Lynnette

Vodafone CEO: Verizon likely to deploy LTE first

Thu, 17 Apr 2008 06:59:55 -0400

Vodafone CEO Arun Sarin indicated in an interview with BusinessWeek that its partly owned venture Verizon Wireless would likely have to upgrade before Vodafone because the company is "riding the 3.5G wave."

"We are headed [toward LTE]. But we want to get a lot of the technical and standards and intellectual-property rights issues resolved before we say we are ready to sign up for it. Frankly, in this particular instance we have a great advantage. We have deployed something called HSDPA [High-Speed Downlink Packet Access] which is 3.5G. So if you said there is no technology available to you before 2012, we at Vodafone are completely relaxed because we are riding the 3.5-generation wave," Sarin said. "In fact our affiliate here in the U.S., Verizon Wireless, will need the fourth-generation wave faster than we do."

Is that really the case? Simply put, Verizon now has the spectrum in the 700 MHz band to deploy LTE. Vodafone has to ride the 3.5G wave until it has enough spectrum to deploy LTE. And EV-DO Rev. A appears to be running on all cylinders for Verizon Wireless.

For more on Sarin's 3.5G reasoning:
- read the whole interview over at BusinessWeek

Related articles:
- 700 MHz winners reveal plans, no big surprises Report on 700 MHz auction
- Verizon Wireless to trial and deploy LTE Report on Verizon's LTE plans

Novatel issues profit warning

Thu, 17 Apr 2008 06:59:53 -0400

Novatel Wireless, which sells laptop cards and embedded modems, warned it would miss its first-quarter financial forecast. The company reduced its first-quarter earnings estimate to $91 million from $110 million and significantly cut its per-share earnings expectations.

Novatel said it was impacted by rivals' less expensive products at Verizon Wireless stores, and it missed shipping a new modem to a major operator customer.

To read more about Novatel's profit warning:
- check out this RCR Wireless News article

Related articles:
- Novatel releases HSPA modems, software to boost speeds Novatel modem story
- Novatel hits four-year low on revised forecast Novatel stock story

Operators reveal 700 MHz plans: LTE the big winner

Mon, 07 Apr 2008 06:59:58 -0400

The CTIA trade show would have been much more livelier had the winners of the 700 MHz auction been allowed to detail their plans for the spectrum. But the FCC anti-collusion restrictions were lifted April 3 in the afternoon, when the show floor had closed for the year.

Verizon Wireless executives on Friday morning assured investors the company's $9.36 billion investment in 700MHz spectrum will provide a long-term foundation for Verizon's business. Specifically, the company said that this year it will be conducting field trials of LTE. In 2009 it will select vendors, conduct some advanced device trials with a deployment planned for the second half of that year. By 2010 the operator plans to launch commercially and have rapid acceleration of its footprint.

Meanwhile AT&T, which spent $6.6 billion in the 700 MHz auction for B-block licenses, will also deploy LTE. The new B-block spectrum will be combined with AT&T's spectrum it acquired from Aloha Partners last year. Kris Rinne, senior vice president, architecture and planning at AT&T told the audience at last week's FierceMarkets Path to 4G conference, which was co-located with the CTIA show, that the company will likely deploy LTE in the 2010 time frame.

Interestingly, it doesn't appear AT&T has any open access plans for its spectrum and and in fact said the open-access stipulations placed on Verizon's C-block spectrum will give it an advantage in the market.

"With fewer costly and complex regulations, we have the certainty and flexibility needed to move faster in rolling out new mobile technology and more customer choices in devices and applications," said Ralph de la Vega, president and CEO of AT&T's wireless business in a press release. "We will put our spectrum to work so that customers can do more with their wireless devices, the user experience is superb, and wireless connectivity can be embedded in more devices."

And we were under the impression that open access fosters customer choice in devices and applications.

With the two largest mobile operators now deploying the same 4G technology it should be interesting to see how each positions themselves in the market. For one, open access is a cumbersome thing. For the other, open access will make it the preferred partners for developers.

I also want to share with you some of the tidbits I learned at CTIA last week:

One CDMA vendor I talked to believes UMB, the 4G path for CDMA, is nearly dead. KDDI is reportedly the only operator interested in deploying it but only if some other operators commit as well--slim chance.
NextWave Chairman and CEO Allen Salmasi said the phone has been ringing off the hook at the company's headquarters now that the 700 MHz auction is over. Part of NextWave's strategy is to offer spectrum it owns to companies that want to enter the mobile broadband space using NextWave's end-to-end solution of products and services, which are numerous. Moreover, Salmasi said to expect to see NextWave involved in a major LTE trial later this year.
HSPA technology is reportedly facing capacity problems in Korea as the popularity of video services is hurting voice quality.--Lynnette

P.S. Group Editor-in-Chief Sue Marek will be talking about all the highs and lows from CTIA with Andy Seybold and Linda Barrabee of the Yankee Group on Thursday, April 10 at 2 p.m. EST. Be sure to tune into the lively discussion. Register here.