Monday, December 16, 2013

The US wireless carrier market is firmly stuck in the past

Over the past year or so, there has been a lot of talk about how the US wireless market is leading the way globally and that a new dawn is coming for the carriers. This line of reasoning is mainly built on the argument that the carriers here (especially Verizon) are at the forefront with 4G LTE deployment.

I would beg to differ. I think the US wireless market is one of the last, globally, to be liberated from its bloated past and suffer a massive reality check. I see two major trends affecting the US wireless market in the short and medium term that spell trouble for the carriers and will be awesome for everyone else.

Sprint is dreaming...

According to Fierce Wireless and WSJ, Sprint is considering a bid for T-Mobile to bring the four national carriers down to three and ease competition.

If these rumors are true, I think it is extremely doubtful that this deal will actually happen for several reasons.

Sunday, November 24, 2013

Why do I love the Jean-Claude Van Damme commercial for Volvo trucks so much?

Just like Avril Simmons, I have watched and re-watched the recent Volvo Trucks commercial featuring Jean-Claude Van Damme, and I agree, it is one of the best commercials I have seen in a long time.

The question that has been bugging me a bit, is, why?

Let me explain. For me, this commercial is all about Jean-Claude

Wednesday, September 11, 2013

Optimal level of carrier competition

I just read this wonderful quote from Orange CEO, Stephane Richard, "The optimal level of competition looks to be three carriers per market rather than four." I agree with Richard, when it comes to the profit margins of the carriers, three is better than four, but I would like to suggest that maybe just one carrier would be even better!

For users of carrier services, consumers and businesses, it is quite clear that optimal market outcomes indicate something entirely different. The facts, both EU-wide, in France (Orange home market) and in the US market tend to strongly suggest that when you go below four carriers in a market, competition decreases significantly.

Why do we include unprofitable products in global smartphone market share?

When we look at measuring the market shares of various smartphone manufacturers today we first of all can observe the battle going on between the two OS platforms, iOS and Android.

However, most of the attention in both mainstream media and in dedicated tech media has focused on the occasionally shrinking market share of the Apple iOS device family. And while this is certainly true, I would like to ask the question:

Is this measurement relevant?

Tuesday, September 10, 2013

Both iPhone5C and S will support TD-LTE

Based on the technical specifications for the new iPhone5S and iPhone5C, it appears that both models will come in versions that will support TD-LTE in addition to the, as of now, more commonly used FDD-LTE 4G technology.

Monday, September 9, 2013

Verizon want to end the Internet (they just don't know it)

Today, Verizon squared off against the FCC in what promises to be a long fight over the future of the Internet. What is at stake is something called Net Neutrality. FCC want to keep it, Verizon does not. 

On the face of it, the case argued in Federal Court in DC today is about whether the FCC has legal authority to regulate the internet (within the US) at all. But the reason why this case came to be in the first place was that the FCC decided that Net Neutrality was one of the core principles that had contributed to the explosive growth and innovation provided by the Internet as we know it.

Verizon didn't like it and decided to go nuclear by questioning the FCC authority in court.

Monday, September 2, 2013

Vodafone return of cash and shares to investors signals bleak future

Today, Vodafone and Verizon finally announced their expected deal where Verizon buys out the remaining Vodafone ownership share in their US joint venture. This deal has been expected but also a long time coming.

I think this deal is very well timed by Vodafone as the competitive landscape in the US wireless market is most likely about to change and Vodafone may have sold their interest in Verizon "at the top".

I do support this rare win for Vodafone. However, after reading through the details of the Vodafone announcement, I think there is a significant risk that the Vodafone management and board has pretty much given up on the future of the company and that we can expect the past decline to continue and possibly accelerate. Even a takeover might be in the cards.

Thursday, August 29, 2013

Vodafone should sell Verizon and buy T-Mobile

The speculation over what will happen with the 45% Vodafone ownership stake in Verizon Wireless has heated up over the past few days with reports of ongoing negotiations between the two companies. Pundits valule the stake at around $130Bn.

While it is unlikely that Vodafone would be paid in full with cash and very likely that analysts would prefer that Vodafone use whatever gains they get to lower their debt burden, I have a different proposal.

Vodafone should sell the stake in Verizon Wireless and then use some of the proceeds to immediately buy T-Mobile.

Friday, August 16, 2013

Carriers lost. OTT won. Now what?

I think the "war" on OTT from the carriers perspective is more or less lost. It is now more about running down the clock and eking out as much revenue as possible.

A more pressing problem going forward is not the death of SMS or other services exposed to OTT, it is the failure to be open to innovation as well as often times missing out on strategic openings that are much more closely aligned with the carriers strengths than fighting OTT.

Monday, July 15, 2013

The case for T-Mobile bidding on Leap Wireless

After the never-ending Leap Wireless and Metro PCS merger speculation saga, AT&T finally decided the other day to put Leap Wireless out of their misery by agreeing to purchase the company for $1.2Bn.

The deal makes sense for AT&T, no doubt about it. They get an interesting mix of PCS and AWS spectrum which they badly need after the T-Mobile merger debacle. To sweeten the deal, they also get about 5M Leap customers as well as ownership of the brand "Cricket". On top of this, the deal is a test to see what the federal regulators, FCC and Department of Justice will tolerate after the regulators killed the proposed T-Mobile merger.

All this for only $1.2Bn. Congratulations AT&T!

I will here make the case for why T-Mobile (or to a lesser degree, Sprint) should, or possibly must, get involved and start bidding on Leap Wireless before the deal with AT&T is closed.

Wednesday, April 17, 2013

What is next for the US wireless market?

Here are three major trends that will shape the US wireless market over the coming 12-24 months.

Dish eager to extract value from spectrum holdings concocts elaborate plan to buy Sprint

Dish Network Corp. recently launched an unsolicited bid for Sprint in the midst of the Sprint - Softbank merger. At the same time, Verizon declared that they would be interested in purchasing spectrum from Clearwire that would become part of the Sprint - Softbank merger.

Both of these offers are unlikely to prevail and it is very unclear wether they would deliver any benefits beyond Dish and Verizon. 

Justice Department nails it with FCC filing about spectrum auctions

The US Department of Justice recently filed a brief with the FCC commenting on upcoming rules for spectrum auctions. The brief outlines reasons for why ensuring low frequency spectrum access to smaller carriers (in this case Sprint and T-Mobile) would be good for the competitiveness of the US wireless market and by extension, the American consumer and society at large. 

Tuesday, April 9, 2013

AT&T immediately matches Google Fiber offering in Austin

It took only moments for AT&T to react to the Google announcement that they were deploying Google Fiber in the Austin, TX market. Consumers, apparently competition works after all! This is what you can look forward to in the coming markets Google enters. 

Friday, April 5, 2013

Who are the winners and losers when carriers kick the contract habit?

T-mobile recently announced that they would drop the prevailing practice of signing up customers for two year contracts and instead let all customers go month-to-month. This, combined with a decision to stop subsidizing handsets is a first among the major US carriers.

Let us take a look at who stands to gain from a change like this.

Wednesday, April 3, 2013

Verizon denies any joint Vodafone takeover bid madness

Verizon Wireless today went out of their way to deny any involvement in a speculated joint AT&T/Verizon takeover bid for global wireless operator Vodafone. While the speculated plan had some interesting features to it, I think it is very unlikely to happen, at least in the configuration that was suggested.

While the plan would have solved three major problems in one sweep, it would also have created a major strategic headache for Verizon.

Thursday, March 14, 2013

Google kills off Google Reader, what is next?

Google announced yesterday that they will sunset their Google Reader application together with several other applications and APIs in what they brand as a "spring cleaning". This is not the first time Google decides to trim their application portfolio. Does anyone remember Google Wave?

I think the push-back might be much stronger this time. Google Wave was a very experimental platform which never saw its usage case validated beyond a very small core of dedicated users and some of its innovations were supposedly put to use in other applications such as Google Docs and Google+. Google Reader on the other hand has been a very reliable and loved RSS-reader with a significant user base as well as platform for many third party Readers and Apps. 

Monday, March 11, 2013

Netflix take on corporate culture

I recently came across this great presentation by Reed Hastings, explaining the Netflix corporate culture. The core is really about how to be able to stay nimble and innovative while growing. The answer according to Netflix appear to be hiring top talent and minimizing rules, unnecessary processes and admin and continue to work as a startup.

CTIA and WBC promotes international Spectrum Harmonization

A recent report by CTIA and the Wireless Broadband Coalition urge US regulators to harmonize the intended spectrum use for the bands 1755-1780Mhz and 2155-2180Mhz with international policies already in place. 

CTIA and WBC touch on an important aspect of wireless regulation and competition in the US. As the report indicates, significant savings and benefits can be achieved by harmonizing spectrum planning in the US with the rest of the world.

Tuesday, January 22, 2013

Investors contribute to an unhealthy feedback loop for unsustainable startup valuations

This post was originally created as a comment on the Glen Hellman blog, Driven Forward.

I think there are (at least) two different parts to the problem of investors contributing to "bad startups".

First, as the industry cycle starts heating up and a bubble is close to forming, we have the issue of a lot of existing startups (as well as the launch of new ones) becoming "valuation driven" instead of "business/revenue/profit driven".