iDEN

Sprint to keep iDEN network

Phil Goldstein — Fri, 31 Oct 2008 10:22:03 -0400

Sprint Nextel put to rest any speculation that it would try to sell the iDEN push-to-talk network that it acquired when it merged with Nextel in 2005. The company said it will hold onto the network, despite rumors that it had been shopping for a buyer.

In a statement, Sprint CEO Dan Hesse reiterated what he has said before: that the iDEN network is critical to Sprint's operations. "The iDEN network is a key differentiator for Sprint, as it allows us to offer products and services no other carrier in the industry can match," he said.

In September, Hesse said that Sprint was going to hold onto the iDEN network despite the drag it had made on the carrier's business, as the operator hemorrhaged subscribers. However, in early October rumors swirled that either Cerberus Capital Management or Latin American cellular operator NII Holdings might be a possible buyer of the network.

For more:
- see this article

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Sprint Nextel outlook darkens following S&P downgrade

Phil Goldstein — Fri, 05 Sep 2008 10:33:41 -0400

Sprint Nextel, the U.S. carrier, saw its outlook turn bleak following a downgrade by a Standard & Poor's analyst who forecasted the carrier's credit measures will perform poorly over the next year.

The report, by credit analyst Allyn Arden, said rising competition and weak subscriber growth would contribute to Sprint's woes, and it comes as the company is reeling from the side-effects of the credit crisis. Though the carrier has taken steps to shield itself from customers affected by the subprime crisis by tightening credit checks, it looks to be another a victim of the spreading effects, as its iDEN network, acquired when the carrier bought Nextel, continues to lose high-revenue subscribers.

For more:
- see this article

Related article:
Sprint Q2 churn down, data ARPU strong

Is Sprint selling its iDEN business?

Sue Marek — Thu, 07 Aug 2008 09:11:20 -0400

During yesterday's second quarter earnings call with investors, Sprint executives tried to gloss over the continued losses to the firm's ailing iDEN network. CEO Dan Hesse remarked that the company is committed to improving service levels on iDEN and that the network is performing at "the best levels ever."

But Sprint executives couldn't hide the fact that customers are still churning from iDEN at a rapid rate. At the end of second quarter, Sprint had 14.6 million subscribers on iDEN, down from 17.3 million at the end of first quarter. And don't be fooled, those iDEN subscribers aren't migrating over to PowerSource (phones that use both iDEN and CDMA). At the end of second quarter, Sprint had 1.7 million PowerSource customers, only slightly up from 1.4 million at the end of first quarter.

During the call, CEO Dan Hesse skirted questions about whether the company would consider selling its iDEN business. Hesse diplomatically said that he would consider all potential offers on the table and not discount any without further review. Clearly something needs to be done to fix the problem and analysts such as Walter Piecyk of Pali Research believe that it's inevitable that Sprint will sell its iDEN network. In fact, Piecyk said that yesterday's announcement by Sprint that it plans to make an offering of $3 billion in cumulative perpetual convertible preferred stock is another sign of iDEN's imminent sale. Piecyk says that the convert deal will offer added liquidity so Sprint can sell iDEN and prevent debt from being transferred to the acquiring company.

If Sprint is preparing to sell iDEN, who would be the potential buyer? I suspect there is an opportunity here for some savvy firm that is willing to cater to the prime Direct Connect customers that Sprint seems unable to maintain. I'm talking about those blue collar professionals that Nextel carefully selected back in the early 90s. Any ideas? --Sue

On the Hot Seat with SouthernLinc Wireless CEO Bob Dawson

Mon, 12 May 2008 11:38:44 -0400

In this era of consolidation, the number of successful small regional operators is dwindling. SouthernLinc Wireless has always had a unique proposition. The regional operator, which is a subsidiary of Southern Company, uses iDEN technology to provide wireless service to its customers in Alabama, Florida, Georgia and Mississippi. Sue Marek, editor-in-chief of FierceWireless, recently talked with Bob Dawson, CEO of SouthernLinc Wireless about the future of iDEN and the value of push-to-talk.

FierceWireless: With Sprint migrating away from iDEN and onto the QChat platform and Motorola planning to separate its handset unit from the infrastructure division, are you concerned about the future of iDEN?

Dawson: I think there is a general concern about how many people are going to be buying [iDEN]. All indications I have is that iDEN is in good shape. It could be better if that other carrier wasn't going to another product. But I believe iDEN has life in it. It's the best push-to-talk product out there.

Everything I have heard from Motorola is that they are still working on iDEN. We are currently on it. We have deployed the highly available DAP [dispatch application processor] and real-time mirrored backup. It's just one box--a smaller box but more powerful.

FierceWireless: Do you think push to talk is still a valuable application?

Dawson: It's still very valuable. Clearly people in various companies are making economic decisions and will get a better deal. Real workers still want PTT but they are not always in a decision-making process. Our biggest problem is the economy is in a downturn. There is a perception that companies are cutting back on work force. The economy and more competition are our biggest problems, not whether or not the technology is needed.

FierceWireless: Where is the competition coming from?

Dawson: There's more competition from larger carriers building in areas where we are. But we are competing with cellular, not push to talk. People that tried alternative push-to-talk offerings have abandoned them.

FierceWireless: Are you able to get enough compelling iDEN handsets?

Dawson: Yes, we are getting them. We have seen the Motorola roadmap for handsets up until 2009 and there are some good looking phones with smaller features. I'm not worried about handset roadmap. In late 2006 and 2007 that was problem but it isn't any more.

FierceWireless: Sprint Nextel says that one of the benefits of migrating from iDEN to QChat is the ability to do push-to-x. What do you think of push-to-x?

Dawson: Push-to-x, we have been talking about that for iDEN for awhile. In fact, we built our whole ad campaign around push-to-succeed. We've been looking at applications talked about for push-to-x. Sometimes it's confusing. What is push-to-x? Yeah, it's neat. But do people want it? How much will it cost?

Most of our customers are looking to talk. They want to get someone fast. If you can push to do some other thing, there is a market for it. But there's still the question of how much will it cost?

I don't see any one thing that can replace iDEN for two-way radio. This is a highly reliable network. And it seems to do the best in really bad weather. I don't think we'll find a replacement for it. I told our board that we will be doing this to 2017. Our coverage isn't prefect but no carrier can do what we do.

FierceWireless: What is your biggest challenge today?

Dawson: The economy. People are quitting services. Customers that have several radios will turn off a few because of layoffs. And with the penetration rates that we have in the wireless industry, it's a matter of 'I'll take your customers while you take mine.' And the rate plans are designed to do that.

Churn is still low, which is good. It's just gross sales that are missing now. We are putting things in place to lift that with incentives and rate plans.

Some days it's hard. I'd like to have advertising budget and a national footprint. That's why we push so hard on PTT roaming and data roaming. You can look at regional as negative or positive. When customers want to talk, they get local people that know the issues. People that will take care of them because they live and work here.

Sprint Q2 churn down, data ARPU strong

Wed, 08 Aug 2007 06:59:58 -0400

For troubled operator Sprint Nextel, the second quarter was a mix of good news and bad. On the profit side, the No. 3 carrier reported a net income of $19 million, down from $370 million in second quarter 2006. But total wireless revenue was $8.8 billion, an increase of 3 percent year-over-year and wireless data revenues were up 40 percent compared to a year ago. Sprint added nearly 400,000 subscribers bringing its total subscriber base to 54 million. 41.6 million are post-paid subscribers with 25.3 million on the CDMA network and 15.5 million on iDEN. The carrier has 850,000 PowerSource users who use both the CDMA and the iDEN network.Ã‚Â Ã‚Â

Here's a rundown the firm's second quarter highlights:Ã‚Â

ARPU: Post-paid ARPU was $60. Data accounts for 16 percent of postpaid ARPU. The CDMA platform data ARPU was $12.75 per month. Sprint says there's been strong demand for data aircards and the company has sold more than 1 million cards.Ã‚Â Ã‚Â

Churn: Churn was reduced to 2 percent and the company says that network performance continues to improve.Ã‚Â Ã‚Â

Boost Mobile: Boost Mobile prepaid net subscriber additions were 169,000, bringing Boost's total subscriber base to 4.5 million. The Boost Unlimited plan has attracted 100,000 subscribers. The unlimited plan is in four markets and the company has not seen any postpaid cannibalization from the unlimited plan, however those subscribers do have higher usage. The company will decide later this year what its next step is with Boost Unlimited.Ã‚Â

ITC ban on handsets with Qualcomm chip sets: Sprint is exploring its options so that its customers have the latest handsets. It is using a technology solution designed by Qualcomm. The company believes this workaround solution isn't impacted by the ban. The company is encouraging Sprint and Broadcom to reach a resolution.Ã‚Â

Pivot Cable Joint Venture: The cable JV has launched service in 20 markets and expects to be in 40 markets by year-end. Sprint Nextel Chairman and President Gary Forsee says that the JV took longer than expected to work through back office issues and there is still some system work necessary to speed up activations. However, customers are receptive to the service.Ã‚Â

For more on Sprint's second quarter:Ã‚Â Ã‚Â
- see this press release
- see this WSJ story (sub. req.)
- see this MarketWatch story