In 2012, wireless carriers look only to the future
Every year wireless companies make investments and plan for the future. It's just part of doing business.
However, this year a number of companies made moves that will legitimately set them up for years of growth ahead. The deals that were announced, if they get approved by regulators next year, will reshape the U.S. wireless industry.
I believe the biggest story of the year was not just T-Mobile USA's decision to merge with MetroPCS (NYSE:PCS), but the smaller steps it took to transform its business. Thanks to "rock star" CTO Neville Ray and his team, the carrier is fundamentally reorganizing its network, using expanded 1700 MHz AWS spectrum holdings for LTE next year and pushing HSPA+ service off of AWS spectrum and onto its refarmed 1900 MHz PCS spectrum. A company that a year ago was spectrum-poor and weak after AT&T's (NYSE:T) failed $39 billion acquisition is now in a position to be aggressive in 2013. Did I mention that T-Mobile is finally getting the iPhone and doing away with handset subsidies? T-Mobile is making waves.
Right behind T-Mobile's moves in terms of importance is the $20.1 billion investment Japan's Softbank is making to buy 70 percent of Sprint Nextel (NYSE:S). Sprint has been in the financial doldrums for years as CEO Dan Hesse has tried valiantly to recover from the Nextel merger. Now, with Softbank CEO Masayoshi Son as his backer (and in effect, banker), Hesse can push Sprint forward as a recapitalized company eager to take on AT&T and Verizon Wireless (NYSE:VZ). Indeed, Hesse already finalized a deal to acquire partner Clearwire (NASDAQ:CLWR) for $2.2 billion. Sprint is going on the warpath next year.
Verizon and AT&T also made deals this year: Verizon received nationwide AWS spectrum from a group of cable companies for $3.9 billion and AT&T scored significant chunks of AWS and 2.3 GHz WCS spectrum. However, to me, the biggest step they took was to launch shared data plans. The plans have been controversial with some customers who might have to pay more for data access, but for the carriers these plans just make sense. More consumers are using multiple wireless devices; voice is becoming a commodity; and average data usage is increasing in the long term--these conditions make shared data plans a way to generate more revenue. In a future where even your refrigerator is connected to an LTE network, shared data makes sense.
Other key issues this year include policies around spectrum auctions and acquisitions, as well as the growing importance of wireless patents.
Fleetwood Mac sang "Don't Stop Thinking About Tomorrow." This year, that's all wireless executives seemed to do, which means 2013 is bound to be an exciting year. --Phil
P.S. FierceWireless will not publish during the holidays. However, we'll update the website with any breaking news, and we will be back in your inbox Wednesday, Jan. 2, 2013. Enjoy the holidays and have a Happy New Year!