North America: Wireless Network Carrier Update

Abstract:

Huge and significant changes are occurring in the Telecommunications and Wireless space during the month of July! Significant change in plans for consumers and consolidation of smaller-tier carriers may offer more competitive choice for consumers... but with advancements comes security risks.

On the Mobile User front...

2013-07-10: T-Mobile’s new "Jump" service plan gives customers two upgrades per year

At a press conference in New York City Wednesday, T-Mobile unveiled a new type of mobile service plan that will allow customers to upgrade their phones up to twice a year with no outright financial penalty or waiting period. On the “Jump” plan, customers will still pay to switch phones, but they can get them at new-contract prices. Customers on T-Mobile will have to pay an extra $10 per month for the Jump plan.

2013-07-16: AT&T jumps on the frequent-phone-upgrade bandwagon with “AT&T Next”

Not to be outdone by T-Mobile's "Jump" program and Verizon's rumored "Edge" program, AT&T on Tuesday announced a plan called "AT&T Next" that will allow its customers to upgrade their smartphones and tablets more frequently without having to pay the full, unsubsidized price for the devices. AT&T Next gives customers the option to get a new phone or tablet with no down payment in exchange for an extra charge, equivalent to about five percent of the device's unsubsidized price, on their monthly bill.

2013-07-15: Verizon’s rumored "Edge" plan may ensure you always have a new phone in your hands

It looks like the days of waiting two years for your next handset upgrade might be over. DroidLife is reporting that Verizon may be introducing its own “buy a new phone if you’re sick of your old one” plan later next month. According to the site’s source, the plan is called VZ Edge, and it will enable customers to upgrade their phones more often than once every two years to help them “stay on the leading edge of technology.”

On the Carrier front...

[AT&T storefront, courtesy Business Insider]

2013-07-12: In move for spectrum and prepaid customers, AT&T buys Leap for $1.1 billion

As a way to solidify its spectrum holdings and gain a stronger foothold in the growing prepaid mobile market, AT&T has agreed to acquire Leap Wireless (and its prepaid Cricket brand) for $15 per share, which works out to $1.1 billion, given 79.05 million in outstanding shares. Considering that Leap’s closing stock price on Friday afternoon was $7.98 per share, that’s a hefty premium. ... As of April 15, 2013, Leap had $2.8 billion of net debt. Leap shareholders will also receive a contingent right entitling them to the net proceeds received on the sale of Leap’s 700 MHz ‘A Block’ spectrum in Chicago, which Leap purchased for $204 million in August 2012.”

2013-07-05: FCC clears way for SoftBank to buy Sprint, Sprint to buy Clearwire

The U.S. Federal Communications Commission on Friday announced the removal of the last barrier to a three-company merger that will see Japan's SoftBank take control of Sprint Wireless, which itself is set to take over Clearwire.

2013-07-10: SoftBank priority is beefing up Sprint, not exec changes

SoftBank Corp (9984.T) will move rapidly to use airwaves from Clearwire Corp CLWR.O to bolster Sprint Nextel Corp's (S.N) wireless service, but it does not plan any big personnel changes once it takes over the No. 3 U.S. mobile carrier, a top SoftBank executive told Reuters.

2013-07-11: Sprint wants to become the mobile autobahn, removes all limits for life

Sprint has thrown down its own gauntlet in attracting...(e.g., contract) customers: guaranteed unlimited voice, text, and data, forever. In a press release Thursday, Sprint said that this deal would apply to both new and existing customers who sign up for Sprint’s new Unlimited, My Way, or My All-In plans. The deal will be available starting Friday, July 12, 2013 for just $80 per month.

On the Hardware front...

[image courtesy article on femtocells from gigaom.com]

2013-07-13: Femtocell flaw leaves Verizon subscribers' Wi-Fi and mobile wide open

Security researchers have demonstrated a flaw in femtocells that allows them to be used for eavesdropping on cellphone, email, and internet traffic. The hack was demonstrated on Verizon hardware, and the telco giant has issued an update to patch the vulnerability, but up to 30 other network carriers use systems with software that can be hacked in the same way. Femtocells are used to boost Wi-Fi and mobile signals within a household, but a common form of software that many devices use has a major security flaw that allows all traffic to be recorded and analyzed.

Wireless Network Carrier Updates: Clearwire, Sprint, DISH, and SoftBank

[Sprint storefront photo, courtesy Reuters]

SoftBank, Dish, Sprint, Clearwire

Abstract:In the area of network, there are 3 major modes of communication: satellite, tower, and wired infrastructure. The first two require finite shared resources referred to as spectrum. The final requires expensive infrastructure to be dug into the ground or strung along poles. In order for companies to compete effectively in a nation's network, infrstructure must be built or acquired. The process of acquiring or merging of assets with smaller network players is always going on, but this latest battle has been somewhat interesting.

[Disk logo, courtesy The Verge]

Background:
Clearwire, an early 4G U.S. network provider, is in talks to be acquired by two different domestic companies: Sprint (wireless provider) and Dish Networks (satellite provider.) Foreign SoftBank is interested in buying Sprint, at the same time, adding tremendous uncertainty to the mix.


[Charles W. Ergen, Dish Network’s chairman, courtesy NYTimes]

The Time Line: In October 2012, Japanese SoftBank tried to acquire the third largest U.S. network provider: Sprint. In December 2012, Sprint bought for itself a little Christmas present - Clearwire: a 4G network service provider. In January 2013, Dish made an unsolicited bid to purchase Clearwire, even though Sprint was in process of buying it. In March 2013, foreign SoftBank tries to aleviate security concerns in the U.S. by indicating Chinese equipment maker Huawei will be ejected from the network. In April 2013, domestic Dish offers to purchase Sprint to build a combined satellite and tower based wireless infrastructure. In May 2013, SoftBank agrees to U.S. government veto power over board of director appointments. Also in May 2013, Sprint increases their bid for Clearwire, to get their wireless spectrum.

[Sprint and Clearwire logos, courtesy Engaget]

What They Want & Need:
SoftBank owns about 1/3rd of Chinese electronic commerce company Alibabba, and wants a foothold in the U.S. market but has regulatory issues to overcome. (SoftBank uses primarily Chinese equipment.) Sprint needs to upgrade to 4G networking and find additional sources of revenue. Clear has wireless spectrum, but their gamble on early 4G WiMAX has not turned out to be the standard once hoped for, and needs to upgrade it's 4G network. Intel Corporation used to be a WiMAX advocate, Clearwire uses Huawei equipment. SoftBank uses the same cell phone wireless spectrum that Clearwire owns, making the purchase of Sprint (who is purchasing Clearwire) a very good investment - one phone, one infrastructure, multiple nations. Intel, a SoftBank partner, is pushing for SoftBank's acquisition of Sprint (and Clearwire) - possibly because of new promised equipment sales. Dish needs to expand it's market from Satellite television, provide content through wireless towers to cell phones, and add voice to their television service.

Ironies of Irony:
A foreign owned communication company wants to buy its way in the U.S. telecommunications market and pledges not to expel foreign equipment. A domestic owned communications company wants to expand it's U.S. telecommunications market but will not pledge to expel foreign equipment. Which is more secure, from a U.S. governmental perspective? Japanese SoftBank appears to be bending-over-backwards to make their acquisition happen.