AT&T to acquire T-Mobile USA
AT&T, the nation’s largest carrier has agreed to buy T-Mobile USA, the nation’s fourth-largest carrier for $39 billion.
The merger would create the largest cellular phone carrier in the country as consumers increasingly flock to smartphones and tablets to access the Internet.
The unexpected move follows a recently announced plan by T-Mobile to reorganize and restructure to reverse its poor performance. The carrier’s subscriber base dropped in 2010 to 33.73 million from 2009′s 33.79 million and revenues fell to $16.55 billion from $16.76 billion. Operating profits also fell in 2010.
T-Mobile was also known to face constraints in expanding its 3G/4G network to take on more 3G/4G subscribers because it had fewer spectrums than other carriers.
AT&T on Sunday had announced that its board and that of Deutsche Telekom had approved the deal, which includes $25 billion in cash and the rest in AT&T stock.
According to AT&T CEO Randall Stephenson, this transaction represents a major commitment to strengthen and expand critical infrastructure of our nation’s future. The merged company would bring wireless access to more rural and underserved areas sooner than the separate companies would.
Specifically, AT&T promised to provide 4G wireless services to 95% of the population by building more cell towers across the country. That’s 46.5 million more consumers than the company originally planned to provide with 4G.
The combined company would have about 130 million users. Economists and policymakers have been looking to mobile Internet services as a driver of future growth.
The deal will be closely examined by federal regulators because a merger would have consequences for many consumers.
Key lawmakers, including Sen. Herb Kohl (D-Wis.), head of the Senate Judiciary antitrust subcommittee stated that the group would closely scrutinize the deal for implications on consumer wireless prices and quality of service.
Consumer advocacy groups immediately criticized the merger. They pointed to consistently higher mobile phone bills each successive year. Carriers are also switching billing to tiered data plans that consumer groups fear will lead to higher costs.
T-Mobile has offered some of the lowest service prices in recent years.
The deal would have to be approved by antitrust regulators at the Justice Department and the FCC, which oversees the transfer of wireless licenses.
According to Deutsche Telekom AT&T has the right to increase the portion of the purchase price paid in cash by up to $4.2 billion with a corresponding reduction in the stock component.
Although the planned purchase is logical for AT&T because both carriers’ networks use GSM and W-CDMA HSPA + technology, T-Mobile’s 3G and 4G phones operate in the 1.7/2.1GHz bands, whereas AT&T’s 3G/4G phones operate in the 850/1900MHz bands. Merging the networks will create challenges in migrating consumers from one set of bands to another.
LightSquared and the United States GPS Industry Council File Their First Joint Report to the Federal Communications Commission (FCC)
LightSquared, the nation’s first wholesale-only integrated wireless broadband and satellite network provider, and the United States Global Positioning System (GPS) Industry Council (USGIC), the leading organization worldwide representing the interests of the satellite navigation industry and users, announced both the filing of their first joint report as required by the Federal Communications Commission (FCC) and the formation of a technical working group required by the FCC.
Last month the FCC granted LightSquared’s waiver to integrate terrestrial broadband network wireless services with satellite communications along with a requirement to complete an interference study. The grant required several interested parties who use neighboring radio spectrum to establish a working group to fully study potential interference concerns and, in particular, to identify any measures necessary to prevent potential interference to GPS.
LightSquared and the USGIC, working cooperatively, issued their first joint filing to the FCC Friday, February 25. It outlines the key milestones for the overall analyses that they plan to conduct together. The next report will be filed in March, and it will provide the FCC with details about test plans and procedures. Joint filings providing progress reports will be delivered to the FCC each month, with the final report due June 15, 2011.
Guam Public Utilities Commission approves sale of GTA TeleGuam
The Guam Public Utilities Commission has approved the planned sale of GTA TeleGuam, (a dominant telecoms network) to Advantage Partners, the largest private equity investment firm based in Japan. More than two thirds of Advantage Partners’ capital comes from global investors outside of Japan.
GTA TeleGuam is also seeking approval from the USA’s telecoms regulator, the FCC, before Advantage Partners can assume ownership of the company from Shamrock Capital Advisors. GTA TeleGuam announced its deal with Advantage Partners Nov. 15. It expects to complete the transaction in mid-2011.
According to Daniel Tydingco, Executive Vice President of External and Legal Affairs for GTA TeleGuam, they appreciate the Public Utilities Commission’s diligent review and approval of this transaction. This transaction is good for all stakeholders including investors, customers, employees, and the island of Guam. Their new financial backers intend to retain all employees and management team and operate with business as usual.
Americans overpay $336 on wireless bills every year
A price-comparison website has claimed that US consumers pay an average of US$336 per year, too much for their cell phone service, by miscalculating their use of voice minutes, texts and data. It was found that people are more likely to overestimate their anytime minutes and texts, but underestimate their data usage.
Consumers are therefore purchasing wireless plans that don’t actually fit their needs and in doing so, are giving an estimated extra $79 million to wireless companies each year.
The company claims that the discrepancy likely stems from opaque bills, where vague fees get buried within utilization breakdowns.
According to sources, despite the best efforts from the FCC and the carriers to create transparency in wireless fees, they’ve found that people are becoming even more confused about how to right-size their cell phone plans. While tiered pricing creates more choice, it makes it paramount for people to accurately assess their phone usage. Even though data usage is surging, the majority of wireless customers are still throwing away money by getting plans with too much data capacity.
As per studies conducted from December 2009 to December 2010, it was found that more than 230,000 individuals are seeking advice on wireless plans. They found that over that time frame, anytime minutes increased by 229% over the last year (from 193 minutes in 2009 to 634 minutes in 2010), while text message usage increased by 170% over the last year (from 660 messages in 2009 to 1782 messages in 2010).
Less surprising, thanks to the rise in smartphone sales, is that the data usage increased by 94% over the last year (from 64 MB in 2009 to 124 MB in 2010). However, people assume that they need 54MB of data per month,but they are actually using 81MB, which is still considerably less than the current tiered data options which start at 150 MB.
While most people pay too much upfront by overestimating their need for voice and text messages, their underestimates on mobile data use leave them open to excess usage fees afterwards.
LightSquared faces data network hurdle (USA)
The USA based start-up LTE network, LightSquared is facing regulatory glitches after several US government agencies cited concerns about significant interference concerns from the network’s radio spectrum allocation.
As per Lawrence Strickling, assistant secretary of communications and information in the Commerce Department, services as disparate as the GPS network and some maritime and aviation emergency communications could be affected by interference from LightSquared’s network.
Mass-market use of LightSquared’s airwaves would create a challenging interference environment that must be addressed. It is incumbent on the FCC to deal with the resulting interference issues before any interference occurs.
According to Julius Knapp, Chief of the agency’s Office of Engineering and Technology, the FCC is reviewing LightSquared’s request and will ensure that any approvals would not result in harmful interference to current licensed users. They remain committed to moving forward with an open and transparent process.
According to LightSquared, it will begin trials in Baltimore, Denver, Las Vegas and Phoenix early this year and has signed a US$7 billion contract with Nokia Siemens Networks to deploy a nationwide network. The company won’t sell direct to consumers, but plans to offer access to its network on a wholesale basis to the other networks.
Radwin launches Point-to-Point system
Radwin has announced that the availability of a new range of Point-to-Point and Multiple Point-to-Point systems that operate in the licensed 3.4-3.7 GHz spectrum.
With new platforms, companies holding 3.x GHz licenses will be able to use their spectrum to deliver cellular and data backhaul services.
Radwin 2000 3.5 GHz solutions deliver up to 100 Mbps and up to 16 E1s/T1s for long ranges (up to 120 Km/75 miles). The solutions comply with FCC, IC and ETSI regulations.
According to Roni Weinberg, Radwin’s EVP and COO, Radwin offers a complete product portfolio in sub-6 GHz to carriers and service providers. The company has successfully deployed backhaul and access solutions to Tier 1 carriers in over 120 countries and the benefits of their solutions are globally recognized. This past year they saw a great demand for point-to-point systems from operators that own a partially used or unused 3.5 GHz band. With the addition of the new 3.5 GHz products, Radwin is positioned to provide solutions for all regulated sub-6 GHz bands globally.
AT&T, Verizon May caution Mobile-Phone Users exceeding monthly Limits
Verizon Wireless, AT&T Inc. may have to start alerting mobile-phone subscribers who are on the brink of exceeding their monthly limits and generate higher service charges.
According to Chairman, Julius Genachowski, the Federal Communications Commission will propose rules tomorrow and may take a final vote in coming months.
According to reports citing FCC’s e-mail, subscribers may get voice or text alerts when they use too many minutes in a month or place calls using more expensive networks outside the U.S.
Genachowski further stated that it’s clear that the magnitude of this problem is significant, and that it’s time to take action. A survey by the FCC showed 30 million Americans, or one in every six mobile-phone users, had experienced bill shock.
Carriers led by Verizon Wireless, under FCC investigation for overcharging 15 million customers for data, have stated that mandatory messages aren’t necessary because carriers give customers ways to track use of data, voice and text features.
According to Christopher Guttman-McCabe, a vice president for CTIA- the Wireless Association, a Washington-based trade group, providers are concerned about prescriptive and costly rules. The industry continues to develop tools to keep customers informed about their level of usage.
According to the summary, the FCC’s proposal would require clear disclosure of the tools to track minutes of use, in part because too many consumers don’t know about them.
According to FCC, a Verizon Wireless customer, Robert St. Germain of Dover, Massachusetts, faced an $18,000 bill after free data downloads expired without warning. The company agreed to forego the charges after the bill was featured in a newspaper article and the FCC intervened.
According to Jeffrey Nelson, a spokesman for Basking Ridge, New Jersey-based Verizon Wireless, the company was able to resolve that issue. There are occasions when company messes up, and sometimes it takes awhile to get it right.
AT&T Increases Smartphone Early Upgrade fees (USA)
If you are an AT&T customer and planning to upgrade your AT&T smartphone before your two-year contract be ready to pay extra as the company has increased upgrade pricing options. The carrier has increased its early upgrade fee from US$75 to US$200.
According to reports, AT&T has raised its smartphone early upgrade fee to US$200 on top of the new two-year contract price. Before October 3, when the new policy went into effect, it was US$75 to upgrade your smartphone before the 18-month mark in a two-year contract.
According to the company, the change will not be applicable to Apple’s iPhone or basic and quick-messaging phones. When Apple released the iPhone 4, the existing users who are using their phones for less than 12 months will have to pay US$100 more to get the upgraded smartphone. But according to Apple chief Steve Jobs, AT&T would subsidize iPhone customers upgrading to the iPhone 4 up to six months earlier than their current upgrade date.
An AT&T spokeswoman confirmed that the notice posted on BGR was legitimate.
AT&T pointed to the BlackBerry Torch, which costs US$199.99 with a two-year contract, is now available at US$399.99 for customers who agree to early upgrades. The no-commitment price is US$499.99, so a customer will save US$100 providing they don’t mind adding more time onto their contract.
FCC Chairman Julius Genachowski will appear at the Center for American Progress in D.C. on Oct. 13 to discuss the steps the commission is taking to avoid bill shock and unveil the findings of a new white paper on the topic.
Verizon Wireless `Mystery’ Charges Show Need for Oversight (USA)
According to three Democratic U.S. senators Verizon Wireless’s admission it billed customers for mistaken Internet access shows the need for regulators to oversee mobile-telephone billing practices.
As per the letter to FCC Chairman Julius Genachowski by Amy Klobuchar of Minnesota, John Kerry of Massachusetts and Mark Begich of Alaska, the Federal Communications Commission should remain committed to vigorous oversight.
The FCC is probing Verizon Wireless, the largest U.S. wireless company, for charging 15 million customers mystery†fees for data use on their mobile phones.
The FCC started its investigation 10 months back after customers complained about the fees, the FCC revealed in a statement on Oct. 3.
According to reports, Verizon Wireless has put the amount of the overcharges at more than US$50 million in the past two years.
Verizon Wireless which is owned by Verizon Communications Inc. and Vodafone Group Plc will refund the amount to 15 million customers in the next two months. The refunding per customer is between US$2 to US$6.
