Verizon Wireless

Rumour mill: Vodafone, Verizon merger more likely, claims analyst

Paul Rasmussen — Fri, 04 Dec 2009 12:24:57 -0500

Vodafone's long-suffering frustrations with Verizon Wireless over a lack of dividend payment from the US operator could be resolved with a merger of the two companies to form a telecoms provider with global clout.

This viewpoint--which is not altogether new--has been given fresh impetus following comments from US analysts that the chances of a merger have risen substantially compared to a few years ago. "A couple of years ago I would have said the likelihood of them merging was 10 per cent, but now I would say it's more like 30 or 40 per cent," said Execution analyst Will Draper.

However, other industry watchers maintain that Vodafone should not push the idea given that Verizon Wireless will at some point approach the UK-based company asking for help. One thought is that Verizon Wireless might make a divided payment next year (the last payment was made in 2005) providing Vodafone with a transformational cash return of nearly US$4 billion.

If this happens, it could trigger action by Vodafone to move from being a minority shareholder in Verizon Wireless into a position of greater control in a vital market.

The possibility of Vodafone selling its 45 per cent stake in Verizon--which is valued at US$65 billion--would mean a huge tax bill for Vodafone and would rely on the only likely bidder, Verizon Communications, being able to afford it.

One option being floated is that Vodafone does sell its shareholding, perhaps simplified by Verizon including a swap of its 23 per cent stake in Vodafone Italy business as part of its payment, leaving Vodafone then free to partner with someone like T-Mobile US.

For more on this story:
Reuters

First in GSM, second in WCDMA: Where will Europe be with LTE?

Keith Mallinson — Tue, 24 Nov 2009 14:47:58 -0500

Most European operators will trail significantly behind major commercial LTE deployments elsewhere. Transition to the mainstream 3GPP technology track for non-HSPA operators and new spectrum availability are the driving forces for LTE front-runners in America, Asia and Scandinavia.

Next generation network implementation plans vary enormously worldwide. For example, India has yet to auction spectrum for legacy 3G technologies, while Verizon Wireless in the U.S. will start its transition from CDMA2000 to the dominant 3GPP technology track with LTE on its newly acquired spectrum in commercial deployments next year. While travelling west and east to chair conference tracks on mobile broadband at Informa's LTE Americas in Dallas and GSMA's Mobile Asia Congress in Hong Kong this month, I've been able to assess LTE strategies and deployment plans first hand with a total of 11 operators in my panel sessions, while quizzing and listening to several more.

Europe created GSM and deployed it first. Japan blazed the trial with WCDMA for a couple of years before European pioneering deployments began in earnest by 3 in the U.K. and Italy with market entry using new spectrum. This time around with the LTE transition, the most fertile conditions for adoption are mostly in China, Japan and the U.S. With the exception of Scandinavia where TeleSonera and Telenor are likely to launch commercial services in Norway and Sweden next year, these conditions do not yet exist in most of Europe. Major European multinational operators Vodafone, Telefonica and T-Mobile will do little more than just trials during 2010 and seek fresh spectrum for most of their national operators.

Migration from 3GPP2 to 3GPP in the U.S.

In the U.S., LTE provides the timeliest opportunity for CDMA operators Verizon Wireless, Metro PCS and Leap to get onto the mainstream in network technology. Flush with new spectrum from 1700 MHz and 700 MHz auctions, these operators will deploy LTE in allocations that are currently unoccupied by cellular technologies. There are no preexisting mobile devices with any technology for the 700 MHz band. Whereas Verizon Wireless plans to launch and rollout LTE aggressively in 2010 and cover virtually all its current nationwide 3G footprint by yearend 2013, America's other top-two operator, AT&T, will use its new stash of 700 MHz and 1700 MHz spectrum to follow with its deployment approximately starting one year later.

Leapfrogging 3G in China

China Mobile is the wild card among LTE early-movers. The operator drew the short straw in this year's 3G technology allocations with a requirement to implement the immature TD-SCDMA technology. China Unicom and China Telecom were awarded WCDMA and CDMA2000 respectively. It is already too late for much ever to come of TD-SCDMA. Whereas the TD-SCDMA mandate serves as a face-saver for China, the opportunity to establish China Mobile as a world leader in next generation technology is with LTE in its TDD form. This technology has some valuable commonalities with TD-SCDMA including the frame structure. Huawei was boasting a van drive demo for TD-LTE at the Hong Kong show. The vendor will also benefit from resurgent interest in TDD technology outside of China following its lackluster adoption as a UMTS technology in the rest of the world.

PCCW in the dynamic Hong Kong market is eager to use its paired "LTE spectrum" recently obtained in auction and will likely launch FDD-based LTE commercially in a couple of years time.

Refarming 2G in Japan

Japan has world-leading mobile data use at around 40 percent of ARPU and with 90 percent of subscribers already using 3G technologies. Success in 3G with such heavy use in this densely populated nation makes the case to trade up to LTE is most compelling. In addition to new spectrum allocations for LTE, plans to close down 2G PDC within the next year or so will ensure significant additional spectrum to refarm for use with LTE.

DoCoMo suffered by going it alone for several years with WCDMA but is undeterred in its desire to lead with LTE. Among other difficulties with WCDMA early on from 2001 until the middle of the decade, DoCoMo's FOMA customers had poor coverage due to absence of backward compatibility with 2G PDC. Meanwhile KDDI performed better in 3G with CDMA2000, benefitting from volume shipments in the US, Korea and from backward compatible with cdmaOne. In Japan and elsewhere worldwide, multimode devices with backward compatibility to legacy 3G technologies will prevail with LTE.

Waiting game in Europe

Whereas European 3G operators can cautiously upgrade all the way to HSPA+ in existing 3G spectrum, LTE will in practice require separate allocations that are not yet generally available. Although it is theoretically possible to substitute LTE for GSM or HSPA spectrum usage, that is unappealing at this stage and some operators have already undertaken to reallocate some 900 MHz spectrum to UMTS with HSPA. With the exception of limited new allocations, such as in Scandinavia, European operators are waiting for 2.5/2.6 GHz and the so called digital dividend spectrum in the 800 MHz band. It will be years before the latter is allocated and generally available for use.

It is no tragedy for the rest of Europe that the U.S. and Asian operators will be driving early LTE volumes, supplemented by deployments in the relatively small Scandinavian region. Front-runners have the new spectrum resources to make the change efficiently and some have a particular desire to switch technology that makes LTE deployment urgent. The early years of 3G were unpleasant for European operators with onerous spectrum fees, clunky and costly terminals with disappointing performance. European operators will benefit from LTE technology and terminal improvements in commercial use elsewhere because most do not yet have the additional spectrum to deploy commercially themselves. Meanwhile, HSPA and HSPA+ provide the natural upgrade path on existing spectrum.

Keith Mallinson is a leading industry expert, analyst and consultant. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.

Smartphone revolution tests established players – page 2

Keith Mallinson — Tue, 27 Oct 2009 17:15:32 -0400

Major operators such as Vodafone are no less challenged by the rise of Apple and others. Vodafone's moves--I'm loathe to describe most of these as strategic--aim to hedge its position against competition for customer control and margin right across the value chain. Whereas the old enterprise-focused BlackBerry provided significant added-value for operators and did not pose a competitive challenge, in its expanded guise to consumers the BlackBerry ecosystem competes for the customer relationship and bottom line profits. Vodafone and Orange picking up iPhone distribution in the UK counters O2 on expiration of its iPhone exclusivity. Whereas this eliminates a competitive advantage for O2, it also puts Apple in an even stronger competitive position versus the operator market. Apple anticipates a fall in street prices with carrier competition in iPhones, but it does not expect its wholesale prices to fall. So far, Google's Android is predominantly with the T-Mobile with the HTC G1, but this OS is also set to diversify. For example, Vodafone's Verizon Wireless joint venture with Verizon is imminently expected to announce a Motorola "Droid" phone.

Vodafone and other carriers have numerous possibilities in smartphones. Focus is required. Vodafone has had a mixed relationship with Nokia for a decade or more. Club Nokia's mobile portal threatened to circumvent Vodafone and was crushed in order to preserve the regular handset trade. Club Nokia's reincarnation with Ovi was backed by Vodafone since 2007.

Vodafone's 360 initiative is an attempt to get back into the driving seat where its Live! portal has failed. It is promising sophisticated personal contacts management, social networking and an applications store. Its payment mechanism enables content and applications charges to appear on the phone bill. Vodafone plans to rollout 360 to Germany, Greece, Italy, Ireland, Portugal and Spain by yearend and into a further nine nations during 2010.

Vodafone has signed-up phone suppliers Samsung and Nokia with LiMo and Symbian OS respectively for 360. The attraction of LiMo's Linux is the pledge that this will never be used to circumvent the mobile operator with the independent service portals and applications stores that are strategically being pursued by Apple, RIM, Google and Nokia with Ovi.

A key potential competitive strength for 360 versus Apple, BlackBerry and Google is that Vodafone can allow developers deeper access into network capabilities with applications running on a variety of OSs. Similarly, Orange has opened up applications programming interfaces under its Orange partner Program.

Easier said than done. Most carriers groups are loosely structured federations: ownership and control is not absolute. It is difficult for Vodafone's corporate centre to impose a one-size-fits-all approach across many operating companies because local history and conditions differ significantly from nation to nation.

Carriers are disadvantaged by their limited scale. Even though Vodafone is a large group with 315 million proportionate subscribers worldwide, this is still less than a tenth the worldwide market of 4 billion subscribers addressed by Nokia and increasingly other smartphone and OS vendors. Scale attracts developers, helps amortize development and operational costs and build cool brands.

The Joint Innovation Lab initiative promotes creation of mobile applications and services with a global platform for developers. Widget compliant handsets from supporters LG, RIM, Samsung and Sharp will enable developers to create applications that can be rolled out to customers across JIL member companies China Mobile, Softbank, Verizon Wireless and Vodafone with a combined user base of more than 1 billion worldwide.

Many such alliances in IT and telecoms have failed over the years in their attempts to drive cohesion and scale. Alternatively, Ericsson is helping carriers by offering mobile internet, applications and messaging services including hosting to all comers on a white label basis. Carriers worldwide brand these as their own.

Vodafone's old anxieties about Nokia should be the least of its worries with so many new strategic challenges.

Keith Mallinson is a leading industry expert, analyst and consultant. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.

Alca-Lu wins LTE trials, 14 planned for next 6 months

Paul Rasmussen — Fri, 23 Oct 2009 12:11:38 -0400

Operators are indicating their increasing level of interest in LTE by contracting to trial the technology with infrastructure vendors, claims Alca-Lu. The company has confirmed it will launch 14 new LTE operator trials over the next six months, bringing the total number planned for next year to 22.

This news follows on from the company's CEO, Ben Verwaayen, stating that LTE was the "flagship of change at Alcatel-Lucent", and hinted that the vendor was increasingly well placed to win more contracts.

Speaking to Unstrung, Alca-Lu's new president of 4G/LTE wireless networks, Ken Wirth, said that this trials activity was enabling the company to encroach into other suppliers' territory. "Those trial customers... are not just necessarily customers that have our Alca-Lu 2G or 3G infrastructure in their network," said Wirth. "They involve a number of our competitors' embedded bases as well."

While some industry observers were surprised at Alca-Lu's inclusion in the Verizon Wireless LTE contract announced earlier this year, it has placed the company alongside its major competitors as the market develops. "[We're] really seeing customers move much more quickly than I think people thought maybe a year or so ago to really evaluate LTE and evaluate what it can bring to their business," added Wirth.

Ericsson is thought to have the largest number of LTE trial contracts, Huawei has admitted it will have more than 25 by the end of this year, and Nokia Siemens Networks claims four LTE reference contracts.

For more on this story:
Unstrung

UK ripe for mobile network consolidation – page 2

Keith Mallinson — Tue, 29 Sep 2009 17:13:32 -0400

Significant problems remain with two issues: control and branding. With partners' desire for equality, there is by definition no controlling shareholder. In absence of this, the JV agreement will stipulate, among other things, dividend policy with 90 percent to be distributed to shareholders. That will avoid the pickle that Vodafone is in with no cash flow from its 45 percent stake in Verizon Wireless in the U.S., but it is a recipe for management gridlock. Instead, agility is required. It is difficult to predict what the future holds and how the interests of the shareholders might diverge. Deferring the decision for 18 months on whether or not and how to consolidate brands reveals the JV is already having difficulties with the weightiest of decisions.

The competition authorities in the UK and Europe might attach some strings or at least undertake a thorough review prior to approving the JV. There is so much infrastructure sharing in the UK that competition might be affected. T-Mobile shares its 3G network with 3UK. Orange announced RAN sharing with Vodafone, although it seems only mast sharing has occurred. Instead, Vodafone and O2 are sharing infrastructure. These arrangements, including the provisions for folding them up, are the kinds of things the antitrust authorities will likely review. If the JV is allowed, it would be difficult to justify denying H3G, with around 7.5 percent market share, the right to be acquired by Vodafone or O2. This, however, would limit the market to just three network-based competitors.

The proposed new JV stirs memories of the sorry tale when FT and DT combined their international fixed service offerings to corporate customers in the mid 1990s. That old JV was named GlobalOne. DT and FT even arranged cross-shareholdings to consummate its partnership. It was actually a bit more complicated because Sprint also joined with a $3 billion investment by FT and DT. Within five years from start to finish the failed partnership was dismantled. Thankfully the strategic logic is much better this time in UK mobile.

The new mobile JV's integration will be a walk in the park in comparison to T-Mobile's rumoured desire to acquire Sprint in the US. Sprint is still floundering with the legacy of disparate mobile network technologies, brands, marketing strategies and organizational clashes with its acquisition of Nextel in 2005. Its diversification into WiMAX with Clearwire makes matters worse. Sprint Nextel is suffering massive customer losses while market leaders Verizon and AT&T are still enjoying significant additions. With its severely depressed stock price and market capitalization at only around $11 billion Sprint Nextel might go for a song; but there's no quick or easy fix, with or without T-Mobile USA.

Keith Mallinson is a leading industry expert, analyst and consultant. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007.

LTE: Operators split over support for legacy voice services

Paul Rasmussen — Wed, 27 May 2009 12:58:36 -0400

The lack of support for legacy voice and SMS services within LTE could threaten the deployment progress, claims T-Mobile International. Given that LTE is an all-IP network and does not support existing circuit-switched services, T-Mobile is calling for the operator community to back the new Voice over LTE via Generic Access (or VoLGA) initiative.

However, Orange has been reluctant to openly support the VoLGA project, and instead sees LTE--in the short-term--as being a data-only platform. Both Verizon Wireless and Orange favour the circuit-switched fallback option for voice and SMS, which would mean using the existing 2G/3G networks for these services.

According to a report carried by Unstrung, T-Mobile believes that without support for voice services from day one, the promised cost-per-bit efficiency of LTE would not be fully realised. Also, T-Mobile's assumption, according to Franz Seiser, head of core network architecture at T-Mobile, is that the majority of classic 2G/3G services would also be expected of LTE. "It's difficult to position LTE as a data-only network. We need a good solution for voice and SMS as soon as possible."

While the VoLGA Forum has the support of nearly all the major mobile infrastructure vendors, except for Nokia Siemens Networks, T-Mobile stands alone in its backing for the idea. To build more momentum for the concept, the operator community believes VoLGA will need more active involvement by service providers to get its specifications accepted by the 3GPP standards body.

For more on this story:
Unstrung

Verizon joins cellco giants to boost common mobile widget platform

Paul Rasmussen — Wed, 01 Apr 2009 13:13:01 -0400

The development of mobile widgets has taken a giant step forward following the announcement that Verizon Wireless has joined the Joint Innovation Lab (JIL)--recently formed by China Mobile, Softbank and Vodafone--to focus on a single global platform for mobile widgets.

While the JIL has a broader remit than widget development, the group has decided to focus on this particular technology to encourage the expansion of new and innovative services. If successful, this move to a common platform should enable widgets and applications to run on different handsets and OSs across numerous mobile operators, while safeguarding customer security, data privacy and billing systems.

While this action will be seen as an attempt by four of the world's largest operators to put themselves in the driving seat in terms of mobile web apps, it will bring them into competition with the likes of Qualcomm, which is already pushing forward with its own widget application platform.

However, the JIL has stated that leter this year it plans to launch a range of tools including a common mobile widgets specification, developer kits, an online repository, and distribution and payment mechanisms to ensure developers can roll out their products to customers in more than 70 countries across North America, Asia, Europe and Africa.

For more on this story:
Mobile Entertainment

Nokia Siemens eyes Nortel breakup -- wireless unit tops list

Paul Rasmussen — Fri, 13 Mar 2009 15:06:59 -0400

As Nortel struggles to find a viable route out of bankruptcy, Nokia Siemens Networks (NSN) is being put forward as the most likely purchaser of Nortel's wireless business unit. While Ericsson and Alcatel-Lucent--and possibly Chinese infrastructure vendors--could make a pre-emptive bid, analysts believe NSN will want to win any bidding battle due to the need for it to strengthen its North American revenues.

Nortel, which claims to have received more interest in its mobile infrastructure and enterprise systems than expected (it would say this, or course), has something NSN would dearly like--a long-term relationship with Verizon Wireless. NSN made a significant effort starting in 2007 to build stronger links with the company, with the result that it was recently awarded with a contract for IMS from Verizon Wireless.

Another factor behind NSN's interest in Nortel is the in-depth discussions ongoing between Verizon Wireless and Nokia about an LTE device agreement; Nokia could be very interested in further bolstering its negotiating position with the US-based operator through a buyout of Nortel's wireless product line.

For more on this story:
Rethink Wireless and GLG Group

HSPA and LTE to dominate by 2012, says Ericsson CTO

Paul Rasmussen — Wed, 11 Feb 2009 09:36:52 -0500

Around 80 per cent of mobile broadband services will be enabled by HSPA and LTE technologies by 2012, with WiMAX only managing to gain a lowly 4 per cent of the market over the same period, said Ericsson's senior VP and CTO, Hakan Eriksson.

While mobile operators using W-CDMA, CDMA 2000 and TD-SCDMA are all expected by Eriksson to migrate to LTE-enabled services in the future, the Ericsson executive also claims WiMAX service operators, such as Clearwire, have also decided to adopt LTE. With WiMAX and LTE technologies compatible in some areas, Taiwan-based WiMAX equipment makers should accelerate their development of LTE-enabled products, leveraging their WiMAX expertise, Eriksson urged.

The latest figures from the GSA show more than 20 mobile operators around the world have already committed to LTE deployment, while 171 commercial HSPA networks are already in operation.

One of the key players affecting the speed of LTE adoption, Verizon Wireless, is set to announce the network vendors it will be working with at this week's Mobile World Congress in Barcelona. The company has been trialling the technology in conjunction with Vodafone, and is said to have told vendors the network needs to be running this year.

For more on this story:
itwire, Digitimes and engadget

Related stories:
AT&T reiterates: LTE a long way off
24 million subscribers to use 3G LTE technology for mobile broadband services by 2012,
Vodafone head sees LTE as an umbrella standard
Samsung developing own baseband for LTE and WiMAX

Voda chief calls on Verizion Wireless and China Mobile for greater collaboration

Paul Rasmussen — Tue, 27 Jan 2009 12:11:09 -0500

Vodafone's CEO, Vittorio Colao, has indicated to Verizon Wireless and China Mobile that greater co-operation between the three firms could provide significant benefits to subscribers, and that their joint purchasing power should be used to obtain substantial savings from handset and infrastructure vendors.

Colao said in an interview with the Financial Times that, with China Mobile being dominant in China, Verizon Wireless being very strong in the US, and Vodafone having significant operations in Europe, Africa and India, there was the potential for much better collaboration. "If these three companies could work more closely ... in the management of customers, procurement and service creation, we could be unbeatable."

The three firms agreed last year to co-operate on 4G technologies--the first time all three will potentially have a common technology platform to base their service development efforts and joint procurement plans upon.

For more on this story:
Financial Times

Related stories:
China Mobile joins Vodafone, Verizon in LTE trial
Vodafone head sees LTE as an umbrella standard
Mobile industry pushes LTE
Wireless carriers among top brands worldwide