Category: Telecom

T-Mobile USA President and CEO Robert Dotson will leave the nation’s fourth-largest carrier as of May 2011 and will be replaced by Philipp Humm, who was the former CEO of T-Mobile Deutschland. Dotson has been at the helm of T-Mobile USA, which is owned by Deutsche Telekom, for the last 15 years. However, as the mobile market shifts to higher-powered devices that consume a lot of data, T-Mobile has faltered with late network upgrades and a recent quarter that showed off weakness in its once-strong prepaid offering.

Humm will take over as CEO of T-Mobile USA in February 2011, while Dotson will remain on as a non-executive board member until May of that year. But as the mobile market in the U.S. deals with the fact that most Americans already own a cell phone and that growth now has to come from machine-to-machine services and stealing customers away from the competition, things could get rough. As the new head of the smallest player in the space, here are a few things Humm will need to keep an eye on:

Transition to LTE: T-Mobile may say its rollout of HSPA+ technology across its network will offer “4G speeds,” and for the next two years or so it might, but T-Mobile can’t rest on smartphones during that time without preparing for the delivery of data. LTE is a key component of such delivery, as it not only has the potential for faster speeds but is a more efficient user of spectrum, which means it will boost T-Mobile’s capacity.

Spectrum: T-Mobile USA’s spectrum holdings limit where it can expand and how much capacity it will have for tomorrow’s bandwidth-sucking applications. The availability of 60 MHz of AWS spectrum, which will be auctioned off next year, would help, as would a deal with another player like Clearwire, which may be shopping its spectrum around.

Prepaid: T-Mobile had its lunch handed to it during the first quarter, when its prepaid net adds drop by 92 percent. More competitors are entering the prepaid market and prices are falling rapidly as those providers compete for market share. T-Mobile either has to cut costs to the bone so it can offer rock-bottom prices or differentiate (GigaOM Pro sub req’d) so subscribers will pay more for its service.

M2M: AT&T, Verizon, and even Sprint have efforts to sell their underlying network capacity to makers of gadgets and appliances. T-Mobile is no exception, although it has been quieter than the others. However, it has an agreement with Echelon to supply network capacity for smart grid services, and has also offered up its network for other devices, but it’s smaller coverage area makes it a hard sell.

So as Humm takes over T-Mobile USA the problems of stalled growth and a saturated market may be familiar to him from his time running the T-Mobile cellular network in Germany. But he will have his work cut out for him.

AT&T has what it hopes to be an ace in the hole while it transitions to the Long Term Evolution fourth-generation wireless network technology — faster 3G over its entire footprint by the end of the year. How fast? Up to 14 Mbps through an upgrade to the HSPA+ technology standard, according to John Stankey, president and CEO of AT&T Operations, who spoke with me this afternoon.

In the interview Stankey confirmed plans for the nation’s second-largest carrier to move from the current planned rollout of HSPA 7.2 (which offers maximum theoretical speeds of 7.2 Mbps down and real-world speeds of about 3.5 Mbps) to a version of HSPA+ that will offer real-world speeds closer to 7 Mbps down. He said that, for less than $10 million, AT&T can upgrade its 3G network to provide HSPA+ network access to 250 million people by the end of the year. AT&T still plans to begin its LTE roll out in 2011, but for less than $10 million it can provide a fallback network that’s more robust than the 3G network offered by its closest rival, Verizon. My hunch is that it can also afford to take more time completing its LTE rollout while still competing with its rivals, which are boosting speeds on their networks.

Verizon’s 3G network is based on a CDMA standard (EVDO Rev. A) that currently offers speeds of up to 3.1 Mbps (I generally get about 1.7 Mbps down on my modem). As Verizon upgrades to LTE (it plans to cover 100 million people by the end of this year and its entire footprint by the end of 2013) it’s going to offer its users two networks with widely varying speeds. In places with LTE, Verizon says speeds will range from 5 to 12 Mbps down, while in places it has 3G, users will see speeds drop significantly. This is one argument in favor of Verizon looking at deploying EVDO Rev. B in some places, which offers speeds of up to 14.7 Mbps down. Verizon denies this plan.

So, essentially AT&T wants to spend a fairly small chunk of change to make sure its customers have a network on which to fall back on without experiencing a steep drop in speeds. It also wants to buy itself some time to roll out an LTE network without looking like a laggard, speed-wise. Indeed, T-Mobile is deploying an HSPA+ network that’s delivering speeds of up to 8 Mbps in real-world tests.

AT&T also wants to make sure its customers have good devices and coverage while the vendor community gets the LTE ecosystem up to speed. Stankey has long been vocal about his belief that LTE won’t be ready for the mainstream until 2014, and said today, “The vendors are experiencing some challenges on certain features and software, and first implementations in 2011 will be…pretty vanilla.”

Among his worries are issues about roaming between 3G and 4G, and the handoffs between voice and data on 4G networks. He believes a wide variety of LTE handsets for the general consumer, as opposed to early adopters, won’t appear until 2014 — which is also the same time he expects voice to be delivered via VoIP on LTE. Until then, the handsets will be big, have bulky antennas and suffer from short battery life, he predicted. However, he also acknowledged that the HSPA+ handset ecosystem will take some time to develop and said the first products will likely be data cards — a forecast which effectively killed my hope of a fourth-generation iPhone that works with HSPA+ networks.

Even if the handset experience for LTE is lame through 2014, the market for data cards or service for devices like the iPad is a growing opportunity that AT&T can’t ignore. And that’s the main benefit to an upgrade to HSPA+ for Ma Bell: It gets double the speeds on its network for a low price, and it won’t fall behind as it competes with what would otherwise be faster speeds on Verizon’s LTE network, Sprint and Clearwire’s WiMAX network and T-Mobile’s HSPA+ network next year and beyond.

Related GigaOM Pro content (sub req’d):

Everybody Hertz: The Looming Spectrum Crisis

Thumbnail image courtesy of Flickr user mrbill

Privacy is different for everyone. Robert Scoble is happy sharing, while I would hate showing off pictures of my daughter to my Twitter followers or even checking into a grocery store on Gowalla or Foursquare. Add the conflicting goals of a site like Facebook — which wants to make money from people’s data — to the disparity between people’s tolerance for sharing, and we’re faced with labyrinthine privacy policies and confused messaging as big services try to please a huge section of users, most of whom who don’t want to sit down and go through 170 options to change their privacy settings.

Now even Congress is getting involved — but wireless analyst Chetan Sharma proposed an interesting idea last night in his first quarter wireless data analysis. The analysis is worth checking out, (Verizon edged past Japan’s NTTDoCoMo for the first time to become the carrier making the most money selling wireless data) but his suggestion for dealing with privacy is worth sharing with those outside of the wireless industry who might otherwise miss it:

If people are really serious about tackling privacy, OEMs and carriers should build a physical/soft privacy button on the device with 3-5 levels (just like for the ringer volume) that allows users to open/close privacy across all applications and services with the touch of a button. All apps and services should adhere to the principle via APIs. The other mistake companies make about privacy is by treating everyone the same. Privacy is about the perception of control and transparency. If it is given back to the consumer, they are likely to engage more and have a more positive impact on revenue streams that are likely to flow.

Clearly there are issues with this, including the fact that it would only work on mobiles, and that most people have different settings for different apps. Implementing such a thing would also require the carriers or handset makers to work together with app developers without trying to hijack standards or access to the information. But the idea of a privacy middleware layer or a service is intriguing, be it on a handset or as another layer in the cloud. What do you think? Let me know in the comments.

Related GigaOM Pro Content (sub req’d): Could Prrivacy Be Facebook’s Waterloo?

The Federal Communications Commission today created a task force to help it bring 500 MHz of spectrum to market over the next 10 years as dictated by the National Broadband Plan. But since most of the hoped-for spectrum is controversial to one group or another, the folks behind this task force had better have some super-human powers of persuasion, or at least an adamantine skeleton that will hold up against  powerful lobbying.

Julius Knapp, the group’s co-chair and head of the Office of Engineering Technology, told me that its primary goal is to deal with issues that will arise across multiple FCC agencies as the spectrum portions of the National Broadband Plan are implemented, a quick synopsis of which can be found in the chart below. For more details, read my post on the topic.

But Knapp, an electrical engineer by training, will also be looking ahead to long-term spectrum needs (GigaOM Pro, sub req’d). Below are some of the upcoming issues Knapp says the agency and the task force are planning to tackle. And because every comic book hero has an arch nemesis, I’ve tried to focus on the players who will fight each of the FCC’s proposals.

• Broadcast Spectrum: As we’ve explained in previous posts, the FCC is going up against the broadcast industry as represented by the National Association of Broadcasters with the hope of getting access to 120 MHz of underutilized spectrum. Already the broadcast industry is raising fear, uncertainty and doubt by saying that the FCC can’t start a spectrum proceeding without first doing an inventory of the current spectrum holdings as proposed in the Radio Spectrum Inventory Act, which recently passed the House and is awaiting passage in the Senate. However, a Knapp notes, the FCC doesn’t plan on dealing with formal rulemaking for reallocating broadcast spectrum until 2011 (it will open up the topic for comments in the third quarter), which should give it plenty of time to comply with the law.
• MSS Spectrum — Also in the third quarter, the FCC plans to take a look at why satellite providers holding about 90MHz haven’t yet deployed mobile broadband. If the FCC decides to relax the rules requiring those spectrum holders to deploy a significant satellite network, expect the CTIA and wireless carriers to play the arch-nemesis role.
• TV Whitespaces: This spectrum is between the channels used by broadcasters to deliver digital television and was a big issue in 2008. In the third quarter the FCC plans to issue a notice of proposed rulemaking on the topic that would enable equipment manufacturers and network operators to start delivering products and services that use the white spaces. The nemesis here is once again the NAB.
• Unlicensed Spectrum: Finally, toward the end of the year the FCC will come out with information on what band of spectrum it wants to use for delivering unlicensed services like Wi-Fi. The agency is currently talking to equipment manufacturers and public interest groups to determine which blocks might work. Until we know the spectrum the FCC plans to use and how much it wants to offer without a license, however, it’s hard to pinpoint the nemesis.

The task force will also take steps to get the process for WCS, AWS-2 and AWS-3 spectrum auctions for next year, but there is less controversy around those. Regardless, Knapp and his co-chair, Ruth Milkman, have a grueling few years ahead of them.

The County Executives of America plans to build a nationwide wireless broadband network to cover residents of its 700 member counties, and has applied for $122 million in stimulus grants to kick off the effort. The money would fund networks in 12 counties and would cover more than 14 million people.

The CEA hopes to let M2Z, a Kleiner Perkins-backed startup that’s been trying to build a free wireless broadband network since May 2006, build out the network using the AWS-3 band of spectrum. We explained why M2Z was a bad bet back in 2008,  but the utopian idea of free wireless broadband isn’t going away, especially since the current Federal Communications Commission Chair is so keen on mobile broadband as the great equalizer.

Here are the details on the CEA plan:

Specifically, the CEA broadband stimulus application aims to bring free broadband access to 12 major counties and serving the residents of Allegheny County, Pa.; Bronx County, N.Y.; Chambers and Kaufmann Counties, Texas; DeKalb County, Ga.; Kenosha County, Wis.; New Castle County, Del.; Prince George’s and Montgomery Counties, Md.; Will and Cook Counties, Ill.; and Salt Lake City County, Utah.

But the plan submitted by the CEA offers two service options: a paid 6 Mbps offering (the application cuts off right as it says what the paid version would cost) and M2Z’s original free service with speeds of 768 kbps — what most would call barely broadband. The FCC in March suggested that it would create a free nationwide wireless broadband network, but my sources there assured me it wasn’t related to M2Z.  Looks like now M2Z is attempting to take its free wireless broadband proposal to other entities.

Image courtesy of Gavin St. Ours on Flickr.

The FCC today began the long process of building a regulatory regime for a broadband-centric — as opposed to telephone-centric — communications world during an open meeting in which it sought comments on several sweeping policy changes, including reforming the federal telecommunications subsidy for providing rural telephone access. Even as the FCC issues these notices and requests for comments, however, Washington policy experts are still wondering when the FCC will take action to affirm its authority to implement some aspects of the broadband plan. Is the FCC blithely ignoring reality or is it just that confident?

During the first week of April a federal appellate court ruled that the FCC was wrong to chastise Comcast for throttling P2P packets because it did not ground its decision-making in the proper authority. The ruling has the effect of putting the FCC in limbo (GigaOM Pro, sub req’d) as to whether or not it has the authority to compel high-speed Internet service providers to follow some of its regulations.

FCC Chairman Julius Genachowski opened today’s meeting by saying he believes the agency has the full legal authority to move forward with these proceedings despite the Comcast ruling, but that’s what the FCC has been saying since the decision was handed down during the first week of April, and even today that authority was questioned by a fellow commissioner.

The FCC then voted on  six proposals, yielding:

• It approved a Notice of Proposed Rulemaking and request for comments on reforming the Universal Service Fund so the program fund would be used for advancing the growth of high-speed Internet access to rural areas as opposed to supporting voice telephone lines.
• It approved a change in its previous rules on wireless voice roaming, which forces carriers to automatically allow voice calls to roam, and it issued a Notice of Proposed Rulemaking on wireless data roaming in order to see if it’s feasible for wireless network providers to make it as easy for subscribers to roam on data networks in the U.S. as it is for voice.
• It approved two proceedings related to opening set-top-boxes to allow open cable boxes that could access cable networks and the Internet, leading to greater competition for television programming, and for hardware to access video content.
• It approved a Notice of Inquiry seeking comments on how to create fail-proof and resilient broadband networks in case of a natural disaster. One of the  current qualms over IP communication is that it’s not as reliable as the copper telephone networks in case of a disaster.
• It approved a Notice of Inquiry asking for comments on whether the FCC should create a cyber security program.

But during this decision-making process the issue of the FCC’s authority to implement its plans was challenged by Robert McDowell, a Republican commissioner, who questioned the FCC’s authority to require wireless network operators to automatically open their networks to roaming in the wake of the Comcast decision.

Which indicates to me that when the FCC has to implement anything difficult or controversial, the issue of its authority will come up again and again — both from lobbyists and later through the courts. So the real question is as the FCC tries to implement a new broadband-centric regulatory regime, when is going to take the time to clear up these lingering questions?

AT&T today reported first-quarter earnings of $2.5 billion and sales that were largely unchanged from the year before, at $30.6 billion — but the flat sales mask the gains made in its wireless business, which grew to account for 45 percent of revenues. In short, AT&T is betting big on wireless through the sale of phones with data plans (it added 1.9 million wireless subscribers), prepaid plans and an emphasis on providing wireless connectivity for the Internet of things.

For example, the carrier has a deal to provide connectivity for the Kindle and one with Jasper Wireless to help it provide wireless connectivity for myriad partners. I’ve spoken with Glenn Lurie, the executive in charge of At&T’s machine-to-machine efforts, who was optimistic that margins would be higher in emerging devices such as the pictured photo frame. Earlier this year AT&T said it was providing connectivity to everything from dog collars that broadcast a pet’s location to pill bottles that will remind you to take your meds (and even tell on you if you don’t).

The irony here is that M2M connectivity in many ways represents the dumb pipe future that AT&T is so worried about — it’s not providing anything to its partners but the bits. On the call, AT&T executives explained that the number of bits sent via the network are high-margin bits and the machine-to-machine clients have very low churn. Total wireless operating margin rose for the carrier to 44.5 percent.

AT&T also said it had improved its wireless network (GigaOM Pro sub req’d) in New York and that dropped calls in the region declined by 6 percent. For everyone on the wireless network, AT&T said  its HSPA network upgrades are boosting download speeds by 32-47 percent in places where AT&T has deployed fiber backhaul.  Readers, has your AT&T experience improved? Let us know in the comments.

India’s Bharti Airtel will become the fifth-largest telecom provider in the world by purchasing 15 African markets from Zain in deal valued at $10.7 billion, according to Wireless Intelligence. Combining the 15 new markets with the three that Bharti held prior, the purchase will give it just under 170 million subscribers out of a potential customer population of 450 million in all 18 areas. Unless a regulatory issue holds up the deal, the newly acquired markets will include: Burkina Faso, Chad, Congo Brazzaville, Democratic Republic of Congo, Gabon, Ghana, Kenya, Madagascar, Malawi, Niger, Nigeria, Sierra Leone, Tanzania, Uganda and Zambia.

As I review the largest mobile providers in the world, I’m reminded that I need to spend more time looking beyond my backyard in the U.S. It would take the combined subscriber counts of the two largest carriers here — Verizon’s 91 million and AT&T’s 85 million — to rival Bharti’s new size. Perhaps Nokia’s focus on emerging markets isn’t such a bad strategy after all. This worldwide approach is rubbing off on others as Dell just announced a deal with Telfonica Group in Latin America, the world’s No. 3 three mobile provider, to provide services and smartphones such as its Android-powered Aero handset. Now if we could only get the carriers to work out better international roaming agreements so that no one ever gets another $10,000 monthly bill, we’d be in business.

Here’s a look at where Airtel will fit in among the top mobile providers in the world:

Table Source: Wireless Intelligence