Editor’s Note: Following are the most-read stories from RCRNews.com this year. They have been edited to fit in paper format.
1. Vodafone records $41B loss, reworks strategic plans
May 30
Vodafone Group plc posted a massive $41.1 billion loss for 2005, mainly from impairment charges over assets it acquired during the telecom boom days, but promised its investors an even larger than expected payout, which sent its stock up slightly in early trading in London and New York.
Excluding the asset impairment charge, the European-based operator’s revenues witnessed 7.5-percent organic growth and Vodafone added 21.5 million proportional customers during the past year. The company promised to return $17
billion to its shareholders, one-third more than had already been promised.
Still, the operator outlined a strategy to cut its costs including outsourcing its information technology application development and maintenance activities, regional consolidation of its data centers and cutting more than 400 jobs.
2. Cingular, Verizon face class-action suits
July 7
Class-action consumer lawsuits have been filed against Cingular Wireless L.L.C. and Verizon Wireless, litigation that comes as the mobilephone industry lobbies Congress and federal regulators for protection against such legal challenges through broader federal pre-emption.
A nationwide lawsuit filed against Cingular yesterday alleges the top U.S. cellular operator crippled service and overcharged former AT&T Wireless Services Inc. customers after Cingular acquired AT&T Wireless in October 2004.
The class action, filed in federal court in Washington, alleges that instead of the new and improved services that Cingular promised AT&T Wireless customers, Cingular immediately began dismantling and degrading the AT&T network, forcing the latter’s customers to move to Cingular’s cell network.
Verizon Wireless, meantime, faces a new class-action suit that moved to federal court in Detroit late last month.
The suit-technically filed against parent Verizon Communications Inc. but directed at its wireless unit-alleges Verizon Wireless charged a monthly $2 roadside assistance fee since January 2004 without prior consent and later refused to offer refunds for the charge.
3. Razr sales halted by T-Mobile, Cingular in component glitch
March 13
Cingular Wireless L.L.C. and TMobile USA Inc. halted retail sales of Motorola Inc.’s best-selling Razr handset, after the vendor informed the carriers that a component glitch was cutting off calls as if the flip phone was closed.
T-Mobile USA halted sales last Tuesday and Cingular followed suit the next day in order to address the problem.
“At retail, it’s virtually impossible to tell which Razrs have the defective component,” said Peter Dobrow, spokesman for T-Mobile USA. “We’re targeting early next week to resume retail sales.”
4. Industry cheers defeat of excise tax
May 29
The wireless industry applauded the Bush administration’s decision today to abandon the U.S. government’s long-held support for the federal excise tax on wireless and long-distance services.
The tax, incorporated in 1898 to fund the Spanish-American War, adds 3 percent to monthly bills of the 214 million cellular subscribers. The U.S. government has lost several FET challenges in federal appeals courts around the country in past months. The wireless industry has been lobbying for years to ax the 3-percent federal tax.
“With the FET finally taking its rightful place aside the Spanish-American War in our history books, wireless consumers can now turn their attention and efforts to repealing discriminatory wireless taxes on the state and local level,” said Steve Largent, president and chief executive officer of CTIA.
5. White House releases GPS upgrades
Jan. 25
The Bush administration today announced the availability of new Global Positioning System capabilities, accuracy and reliability upgrades that are expected to benefit cell-phone communications and strengthen the U.S.’ technological leadership position. The move comes as Europe inches closer to launching its own satellite-based navigation system.
6. Bush proposes tax on Wi-Fi services, unlicensed spectrum
Feb. 6
President Bush, facing a huge budget deficit, today proposed squeezing more money from the nation’s airwaves by supporting legislative changes that would allow the Federal Communications Commission to set “user fees” on “un-auctioned” radio spectrum.
UPDATE: White House denies Wi-Fi tax; satellite, taxi companies could face spectrum fees.
The proposal, contained in the president’s 2007 budget plan and projected to raise $3.6 billion during the decade, is believed to be aimed at unlicensed frequencies used for Wi-Fi and other applications.
It’s unclear whether the “user fee” tax would be paid by equipment vendors or end users.
7. Spectrum auction ends on $13.7B note
Sept. 18
The advanced wireless services spectrum auction, also known as Auction 66, closed up shop this afternoon, with bidders putting up a total of nearly $14 billion.
The 28-day-long auction ended after 161 rounds, with 104 of the 168 registered bidders winning at least one license. All but 35 of the total 1,122 licenses up for grabs received bids.
T-Mobile USA Inc. was the big spender of the auction, winning 120 licenses with bids totaling nearly $4.2 billion. The fourth-largest U.S. carrier gained spectrum across the country , including licenses in the large markets of New York, Los Angeles and Chicago. As soon as the auction closed, TMobile
USA put out a statement saying that it will not immediately reveal its plans for the spectrum.
Smaller, flat-rate carriers Leap Wireless International Inc. and MetroPCS Communications Inc. also left the auction laden with new spectrum.
Sprint Nextel Corp.’s joint venture with several cable companies came away with spectrum covering 267 million potential customers and won the second-highest number of licenses in the auction: 137 licenses with a total price tag of about $2.4 billion. Only NextWave Telecom Inc.-backed AWS Wireless Inc. won more individual licenses, with a final tally of 154 licenses for $115.5 million-though they cover a relatively small 60 million pops.
8. Cingular, Sprint Nextel tussle over ads about network quality
May 26
Tussles over advertising claims have led to a lawsuit, and Cingular Wireless L.L.C. wants an Atlanta court to validate its assertion that its network has the fewest dropped calls among national carriers.
The suit was sparked by Sprint Nextel Corp.’s challenge to Cingular’s claim. According to Sprint Nextel spokesman Matt Sullivan, Sprint Nextel filed a compliant with the National Advertising Division of the Better Business Bureau, alleging Cingular does not have the fewest dropped calls. The NAD handles such challenges confidentially, and generally releases information on the issue only when the matter is resolved. However, the NAD closed its review of Cingular’s claim when Cingular decided to take the matter to court.
9. AT&T merges with BellSouth; Cingular to go back to AT&T brand
March 6
AT&T Inc. announced Sunday that it will merge with Baby Bell BellSouth Corp. in a $67.1 billion, all-stock transaction that, if approved by regulators, would give Cingular Wireless L.L.C. a single parent company. The transaction also would replace the Cingular brand with the very AT&T brand that Cingular tried to stamp out after acquiring AT&T Wireless Services Inc. in 2004.
The boards of BellSouth and AT&T have already approved the merger, which also must receive a thumbs-up from stockholders and U.S. anti-trust regulators. The merger would put AT&T back on top as the largest telecommunications company in the United States-and, in fact, the world-after it was broken up into eight smaller companies by the federal government in 1984.
A company statement also indicated that the Cingular brand is not long for this world, stating that “currently, the three companies [AT&T, Cingular and BellSouth] support three d
istinct brands with three separate advertising campaigns. Following the merger, they expect to move to a single brand: AT&T.” The statement went on to add that “while the majority of Cingular’s operations will remain unchanged, simplifying the ownership structure will lead to more efficient marketing and service provisioning, which will come under a single AT&T brand.”
10. Cingular tweaks pricing for messaging
June 23
Cingular Wireless L.L.C. has turned to flat-rate bundles for messaging. The move mirrors pricing strategies from other national carriers, some of which have been offering flat-rate bundles for messaging for about a year and a half, according to a Current Analysis research note.
The flat-rate packages mean that consumers don’t have to distinguish between text and multimedia messaging because they both come out of the same bucket of allowed messages. For $5 per month, Cingular subscribers can use 200 messages, and at the $20 price point that limit goes up to 3,000 messages. Cingular has been “one of the last holdouts for flat-rate messaging among the national carriers,” noted analyst William Ho of Current Analysis.
11. Loss of Cingular brand could cost AT&T
May 2
It cost $4 billion to turn it into one of the best known names in the country, a future-forward, dynamic brand with a strong connection to young consumers and a share
lead in the wireless marketplace. Yet, in 2007, Cingular Wireless L.L.C. will be tossed aside like an old sock.
AT&T Inc. plans to kill the Cingular name and logo.
Not only is AT&T-in the throes of acquiring Cingular owner Bell-South Corp.-planning to ditch the Cingular name and ubiquitous, sprightly orange jack, but it will replace it with its own stodgy moniker, renaming the division AT&T Wireless. Such a move could conjure up images of the rotary dial and cause so much confusion that experts estimate it may take another $2 billion in marketing expenses to explain the changes to consumers.
AT&T argues that the $4 billion spent building Cingular-it will lay out around $1 billion this year alone-won’t be wasted, because, in the words of spokesman Michael Coe, it has “created a brand that has led to a customer base which is the largest in the U.S.”
12. Cable companies look at AWS spectrum
May 10
The Sprint Nextel Corp.-cable TV joint venture today took the first step toward competing for spectrum at the advanced wireless services auction this summer, a move with implications for the No. 3 mobile phone carrier and cable TV operators as they attempt to strengthen their respective market positions with expanded bundled offerings.
“We are . evaluating whether it would be a good idea to have a more direct interest in wireless spectrum. Accordingly, we, together with our partners in the Sprint Nextel joint venture, are planning to file a shortform application at the FCC to participate in an auction of advanced wireless service spectrum, which will start on June 29,” Time Warner Cable stated. “The filing of this application does not obligate Time Warner Cable or other companies to bid in the auction, but it provides us the flexibility to take part should we decide it makes business sense to do so.”
13. Cingular to shutter TDMA, analog networks by 2008
March 27
Cingular Wireless L.L.C. started out in 2001 as a company with a network that was more than two-thirds TDMA and analog technology. Now, the company has indicated that it is on track to turn off both its legacy TDMA and analog networks in 2008.
14. Verizon smashes 4Q with 2M net adds
Jan. 24
In a record-smashing quarter, Verizon Wireless clocked 2 million net customer additions to pull past Cingular Wireless L.L.C.’s blockbuster results of 1.8 million net adds.
Verizon Wireless continued its streak of 14 consecutive quarters with double-digit growth, with its customer growth results up 20.5 percent from the fourth quarter of 2004. For the full year of 2005, Verizon added more than 7.5 million net customers, up 19.5 percent from 2004. The carrier ended the year with 51.3 million wireless customers.
Verizon Wireless only released customer numbers; full financial results are expected on Thursday.
Cingular’s 1.8 million net adds are more than double the number posted in the third quarter of 2005. Along with strong customer numbers, Cingular Wireless reported its lowest ever churn rate of 2.1 percent; postpaid churn was a mere 1.9 percent.
15. $1,400 gets you Voce’s voice-only MVNO service in L.A.
May 3
Voce, the luxury mobile virtual network operator, has begun offering its services on a small scale in the L.A. area.
Steve Stanford, Voce’s chief executive officer, described the quiet start as an invitation-only market trial, with participation capped at around 500 people. Stanford said that Voce plans to launch this fall in its other two targeted markets, New York and San Francisco.
Voce’s service runs on Cingular Wireless L.L.C.’s GSM network; since Cingular does not offer data services to its MVNOs, Voce does not offer a data service component and therefore is not targeting data users. However, Stanford said that the MVNO would like to offer data services and is exploring moving into the CDMA arena for that component, and that Voce would like to eventually offer both CDMA phones and GSM phones.
16. Google introduces mobile ad service
Sept. 11
Google Inc. has joined the mobile marketing playground with a wireless version of its AdWords service.
The Internet giant quietly launched the offering that allows AdWords customers to place marketing messages-including clickable links-in listings retrieved through Google’s mobile search service.
17. FCC refuses to probe NSA records
May 24
The Federal Communications Commission said it will not investigate whether telephone companies violated consumer-privacy laws by reportedly releasing millions of phone records to a U.S. spy agency.
In a letter released Tuesday, FCC Chairman Kevin Martin said an inability to obtain classified material would prevent the agency from looking into a newspaper report that AT&T Inc., Verizon Communications Inc. and BellSouth Corp. handed over call records to the National Security Agency.
18. D.C. sues InPhonic over complaints
June 9
The attorney general of the District of Columbia is reportedly suing InPhonic Inc. as a result of more than 2,000 consumer complaints filed against the company during the past three years. The attorney general filed suit against InPhonic yesterday in D.C. Superior Court, according to the Washington Post, which said that the lawsuit was based on 2,210 complaints to the D.C. Better Business Bureau.
19. Verizon interested in Vodafone’s stake
Jan. 27
Though Verizon Communications Inc. executives say that they have received no official notice that Vodafone Group plc is ready to sell its 45-percent stake in Verizon Wireless, they made it clear during a conference call this week that they “would be interested in increasing ownership of Verizon Wireless, whether in stages or actually acquiring 100 percent of it,” in the words of Ivan Seidenberg, Verizon’s chairman and chief executive officer.
20. Verizon to offer speakerphone software upgrade for Chocolate
Sept. 27
Starting next week, Chocolate phone users will be able to get a software upgrade that will add speakerphone capabilities to their handset. Users will be able to visit Verizon Wireless retail outlets to get the free software upgrade.
Verizon recently introduced its music-focused Chocolate phone, which features a sleek, sliding design and dedicated music keys.
