Big 3 air out plans at investor conference

AT&T Inc. and Verizon Communications Inc. see opportunities ahead for their international operations, according to remarks by company executives at last week’s Lehman Brothers Worldwide Wireless and Wireline conference. Meanwhile, Sprint Nextel Corp. is doing its darnedest to convince Wall Street that the company is undervalued, and that the carrier is on the road to recovery.
Randall Stephenson, who takes over this week as CEO of AT&T, said the company believes the key to success is to “win the home” and that the effort to provide multiple services to customers “begins and ends with wireless.” A strong entertainment component is key, he added. As AT&T is able to leverage content across multiple screens, the integrations will offer “a significant advertising opportunity for AT&T.”
Another big opportunity, Stephenson said, is in international operations. Stephenson noted the company would continue to look at opportunities to expand its operations internationally (such as its recent exploration to acquire a stake in Telecom Italia, which eventually fell through).
Asked about AT&T’s interest in the upcoming 700 MHz auction, Stephenson described the spectrum as “beachfront property.”
“We don’t have any great sense of urgency for it,” he said, but added that “we’d love to have it.”
Did someone say “iPhone?”
Executives from all three telecom companies addressed the imminent launch of Apple Inc.’s iPhone. Stephenson said AT&T Mobility, which has the exclusive launch rights to the hyped device set to bow this month, has had more than 1 million people express interest in purchasing the iPhone.
“I don’t know what your expectations are for the iPhone, but I’ll tell you they’re probably too low at this point,” he told the conference audience.
Meanwhile, Sprint Nextel CFO Paul Saleh and Verizon CFO Doreen Toben emphasized the variety of devices and applications in their existing wireless lineups. Asked if the debut of the iPhone could set off a handset subsidy war among carriers, Saleh said that he believes Sprint Nextel’s CDMA handset lineup is competitive and noted that the carrier’s music devices have over-the-air downloads capabilities, which the iPhone is not expected to have immediately.
iDEN, WiMAX update
On the iDEN front, Saleh said that Sprint Nextel is poised to release a new Powersource dual-mode phone this month that is capable of accessing the carrier’s CDMA2000 1x EV-DO data network as well as the iDEN network; the current dual-mode phone operates on iDEN and CDMA2000 1x. Saleh reiterated the company’s goal of making its CDMA-based QChat push-to-talk product available early in 2008 and that the ability to transition iDEN customers to a similarly high-performing CDMA PTT service would allow the carrier to cut network costs on the iDEN side. Trials of the QChat-based PTT product are expected to begin this summer.
Sprint Nextel recently reported that it plans to invest about $800 million this year in its WiMAX network, which Saleh envisioned as a network that would allow various types of short- or long-term subscriptions for use (such as during the length of a vacation when a customer might want to upload photographs) and could bring in additional revenue from advertising. Saleh said that the move to WiMAX would allow Sprint Nextel to reap the benefits of being first to market and establish critical partnerships, and the lower network costs of WiMAX would allow the carrier to offer services that aren’t currently economical.
Saleh also said there is no reason Sprint Nextel cannot improve its metrics to the same level as its competitors, whether the measures are financial or customer-related.
“There’s nothing fundamental that our competitors are able to do that we are not able to do in terms of raising our margins,” he said at one point, and later added, “I don’t see something magical that Cingular is doing or Verizon is doing that we cannot do on the churn side.”
VZW experimenting with greater prepaid growth
Toben said that Verizon Wireless is seeking to sustain its successful performance and will continue to focus mainly on retail postpaid customers, although she added that the carrier has done some experimenting with its prepaid offering and may put a little additional effort into prepaid. She also said that if the Broadcom Corp. patent lawsuit against Qualcomm Inc. turned in a negative ruling for Qualcomm, Verizon would seek a presidential veto-which would ensure its supply of Qualcomm handsets covered in the dispute. A jury ruled in Broadcom’s favor last week, although the legal machinations continue.