Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
I have to admit that there is very little in the wireless space that tugs at my heart strings. I mean, with an industry full of bottom-line financial people, super-intelligent engineers and a “what have you done for me lately?” attitude, there is rarely a moment for warm feelings. (Besides leaving a phone in your pocket too long.)
And it is with this introduction that I must admit to a bit of heart-string tugging when typically ruthless wireless competitor Verizon Wireless let its soft side show when it announced plans to “auction” off its A- and B-Block 700 MHz spectrum licenses so that rivals would have access to airwaves necessary to build out competing LTE networks.
Here is a transcript of Verizon CFO Fran Shammo explaining the sale: (Since I don’t have any video of Shammo actually saying this, please use this video as visualization).
“But we think it’s the prudent thing to do, to sell these licenses off to the rest of the industry for the benefit of their customers and to enhance their ability to build out 4G LTE. So I think we would say that we’re being good stewards.”
I dare you heartless bastards to not say “awwwww.”
Here I was thinking that Verizon Wireless was just some faceless, monolith hell-bent on one thing: destroying its competitors. Turns out, the carrier is really just a nice guy, looking out for the well being of its rivals, and in this latest move actually helping them to offer a rival service.
With Verizon Wireless apparently in such a giving mood, I figured I would pass along a few more things the carrier could do to help out its rivals.
–Loan Sprint Nextel some money. Seriously.
–Buy both Leap and MetroPCS.
–Stop carrying the iPhone.
–Bring back the “Can You Hear Me Know” guy. (This is really something more for me than rivals, but I figured I would throw it in.)
I should also note that while Verizon Wireless is obviously doing the right thing here, some analysts did point out that the A- and B-Block licenses Verizon Wireless is graciously offering to auction off – if it can gain approval of the 1.7/2.1 GHz spectrum deals (more on this later) – is perhaps not as ideal as some might believe.
“We have spoken with two of the reported leading bidders on the spectrum and believe that the A Block, with most of the available covered pops, will not be utilizable for several years until interference issues due to interference on Ch. 51 are resolved,” noted Macquarie Securities in a research note. “This is likely to mean that the proposed A-Block sale will have minimal interest from bidders with immediate LTE spectrum needs.”
Interesting.
Of course, Verizon did not not say that the spectrum was of little value to the carrier, or really any carrier in the near term, as part of its offer. Plus, it’s still spectrum, and isn’t all spectrum really good spectrum? Just ask Clearwire.
Also, there is that whole word “auction,” which is always fun. Who doesn’t love an auction? As a friend of mine who is active in the whole EBay/Craigslist world, you want to buy off of Craigslist and sale on EBay. I am guessing this is more for the value of the EBay seller than the EBay buyer.
Shammo also added that Verizon Wireless would not be auctioning these licenses on the cheap, noting that the carrier would not be conducting a “fire sale,” and that the carrier would not unload these licenses if they did not get what it viewed as perceived value for those licenses. Since the carrier originally spent $4.7 billion for these licenses, I would guess the “reserve” price would be at least that amount. In other words: bargain hunters be warned.
And this also ties into the underlying catch of unloading these licenses: Verizon Wireless’ desire to close spectrum deals involving a boatload of 1.7/2.1 GHz spectrum. Verizon Wireless managed to bury this intent a bit in its original press release, but reiterated it during Shammo’s comments when he noted “this is contingent on us getting the AWS spectrum approved because, obviously, we would need this spectrum if that’s not approved.”
Makes sense from a business perspective, but some might say it does shade a bit the good intentions of the sale. One might read this condition as Verizon Wireless greasing the wheels of this approval process, a read that Verizon Wireless said was incorrect. However, as with many “agreements” that mix business and politics, the truth is often clouded more by what is not said then what is made public.
Of course, all of this negative talk is just killing my feel-good buzz and admiration for Verizon Wireless looking out for the small guy. Where was I again?
Oh yeah.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I guess it makes sense that something as confusing as the term “4G” would finally come to head in a place down under.
It seems that the Australian government is taking to task Apple’s ability to sell its LTE-equipped iPad in the country using the “4G” moniker. Turns out the spectrum supported by the new iPad does not conform to the spectrum used by Australian carriers for their LTE service, instead having to use those operators’ HSPA+, 3G networks.
I know that Apple is all-powerful, but I would think they might think twice before tangling with Aussies.
–I am all for companies attempting to enter the highly competitive mobile space, logic be damned! It always takes me back to the good old days when there were a half-dozen “nationwide” operators vying to serve the increasing appetite of consumers, with dozens of smaller players that seemed to still have some sway in their regional markets.
But, recent claims by Dish Network that it was interested in offering a stand-alone mobile broadband service seem to ring a bit hollow and have an overtone of Cox Communications.
You remember Cox? They came out several years ago with grandiose plans to launch a wireless service that would compete on a national scale, and even spent some money sort of rolling out service. At least for a short time, until the company realized it had no chance in competing against the multi-billion dollar behemoths that rule the wireless market, quickly folded up shop and is in the process of selling off its spectrum to Verizon Wireless for the betterment of mankind (see above).
Not that I don’t want to see Dish give it a go and swim in all the wonderful stories that will come from that attempt. But, maybe at this point we should just ask Dish to skip to Phase 3.
–Nokia just can’t catch a break. Now its long-time backers in Europe have thrown the (still?) dominate handset maker under the bus claiming the new Windows Phone-powered devices are tanking in the market place.
This quote from the story seems to sum up the sentiment best:
“’No one comes into the store and asks for a Windows phone,’ said an executive in charge of mobile devices at a European operator, which has sold the Lumia 800 and 710 since December.”
Ouch.
–Not that it’s on the scale of wireless carriers claiming your device comes up short, but voicemail application developer YouMail has decided to suspend work for Research In Motion’s BlackBerry platform. This quote seems to sum up their decision best:
“It’s sad, but on many days we’re now getting fewer BB users than Windows Phone 7 users, and we don’t even have a Windows Phone 7 app!”
Ouch Part 2: Electric Boogaloo.
That’s right, the whole thing. Enjoy.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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