IP: The Wireless Week in Review

[David Farber <dave () farber net>]

> From: Dewayne Hendricks <dewayne () warpspeed com>
>
> The Wireless Week in Review
>
> Top news for the week of September 17-21, 2001.
>
> 1. TOPPING THE NEWS THIS WEEK
>
> --Who wudda thunk it? Most analysts and industry watchers, that who. 
> NextWave Telecom reportedly rolled over and accepted a deal with the FCC 
> to pay for its C- and F-block licenses and then turn them over to those 
> who bought them at re-auction earlier this year, keeping the money for 
> itself. The commission and the U.S. Treasury stand to lose about $11B if 
> this deal is indeed true, and neither party is commenting on the record. 
> The FCC also says it will drop any pending litigation against the bankrupt 
> carrier once the deal is done. The question is: why did NextWave continue 
> to push the issue when this all could have been solved months (years?) 
> ago. Apparently, it was all about money all along, despite any business 
> plans and financing commitments touted to the industry by NextWave 
> officials. Let's hope this is the end of the long, sad, expensive story.
>
> --On a sadder note, even the plan by several U.S. carriers to ring 
> cellphone and pagers numbers belonging to missing World Trade Center and 
> Pentagon workers in hopes rescuers could find them is for naught. The last 
> breathing survivor of the terrorist attack was pulled out of the rubble a 
> week ago, and even New York politicians aren't holding out much hope for 
> miracles.
>
> However, there have been some miracles when it comes to Wall Street's 
> treatment of wireless carrier and manufacturer stock in the past few days. 
> Verizon, AT&T Wireless and Nextel shares were up as much as 7%, and Nokia 
> saw a spike in its numbers as well. One research firm doesn't expect this 
> trend to last, saying handset sales and related stock movement really 
> won't rise for an extended period until sometime next year. Whether or not 
> this uptick will last is anyone's guess, but right now, people are buying 
> phones and services at a rate not seen during the course of this year, 
> mostly due to a new fear about being caught in a situation where family, 
> friends and co-workers would be unreachable.
>
> The violence of last week also has put the kibosh on any thoughts of 
> taking back military spectrum for next-gen services. Military reaction to 
> last week's events and the spectrum to help carry it out precludes any 
> action on those channels. In fact, the military may be receiving more 
> spectrum at the expense of wireless carriers, and what kind of leverage 
> can celcos wield when there's talk of war?
>
> --We thought the FCC would stand fast on its CALEA deadlines, especially 
> in light of ramped up surveillance following last week's events, but the 
> commission voted to give carriers another seven weeks to get their 
> packet-mode monitoring game plan in place. The original deadline was 
> September 30, but that now has been pushed back to November 19; the FCC 
> has left the door open to further appeals for even more time. What seems 
> strange is that carriers say no switching equipment exists to accommodate 
> this part of CALEA, so where will they get it during the next few weeks?
>
> 2. CELLULAR/PCS
>
> --There appears to be some forward motion when it comes to moving 
> incumbent broadcasters off of some of their channels in the 746 MHz-806 
> MHz range. The FCC apparently affirmed current rules and granted certain 
> additional flexibility to allow for the voluntary clearing of channels in 
> this band so that they can be turned over to commercial wireless carriers. 
> Broadcasters received certain considerations as well, with commissioners 
> saying they can continue to operate in analog mode without having to 
> convert to DTV until Dec. 31, 2005. If less than 70% of viewers in any 
> given market still can't receive digital signals by the new deadline, 
> broadcasters can seek an extension.
>
> --Mitsubishi is the latest foreign handset provider to pull up stakes and 
> leave the United States. The Japanese concern is closing down its Georgia 
> plant next April, putting 155 people out of work. It blames the soft 
> handset market for its decision, and Mitsubishi phones will be made for 
> the U.S. market in Europe and Japan following the shutdown.
>
> --For those looking for special training in wireless technology, several 
> Pennsylvania colleges are offering four-year programs designed by Wireless 
> Infotech Education Services. Classes are open to all college students, 
> with the first one being "WAP and Wireless Java Technology."
>
> --Vodafone made good on its plan to take majority control of Japan Telecom 
> and its tasty wireless division J-Phone. The U.K. carrier will pay $2.5B 
> for its controlling interest, and it already is planning a J-Phone IPO 
> when the market regains stability.
>
> In other takeover news, Telia is paving the way for its planned takeover 
> of Sonera in its plan to become "the" Nordic service provider. 
> Financially, the company looks good, predicting its profit margins will 
> grow to between 25% and 30% by the end of 2002, up from 23% in the first 
> half of this year. Telia also has its eye on acquisition and partnership 
> opportunities in Russia and the Baltic states.
>
> --China finally is close to winning WTO admittance, but it says it will 
> continue to block foreign investors from controlling any Internet, 3G 
> mobile and other telecom joint ventures in the country for a time. 
> Foreigners will be limited to no more than a 25% stake in any 
> communications operation or ISP. However, after one year in the WTO, China 
> says the cap will be raised to 35%; after three years, the cap will 
> increase to 49%. After five years participation in the WTO, China says it 
> will lift all foreign-ownership restrictions.
>
> --Qualcomm is being watched carefully by South Korea telecom ministers to 
> make sure any CDMA licensing agreements between Qualcomm and South Korean 
> handset manufacturers remain true to the original paperwork. Apparently, 
> Qualcomm has been asking its licensees to accept either the "Korean rate" 
> of 5.25% royalties for units sold locally and 5.75% for exports, or the 
> "Chinese rate" of 2.65% royalties for internal cellphone sales and 7% for 
> those exported, violating the "most favorable royalty rates" agreement 
> that was signed in 1993.
>
> --It looks like India's Bharti Enterprises won't be happy until it owns a 
> controlling stake in every celco operating in the subcontinent, and it 
> appears to have a limitless war chest to do so. The company more than 
> doubled its holdings of Madras-based celco SkyCell Ltd. from 40.5% to 
> 89.5%, buying out Millicom and BellSouth International. Bharti, which 
> follows a strategy of acquiring only majority stakes in target companies, 
> now is gung ho on the future. It and two other companies control 66% of 
> India's telecom interests.
>
> 3. PAGING
>
> --Glenayre got the nod from its board of directors to institute a reverse 
> stock split aimed at stemming its sinking share prices and at keeping it 
> up and running on the Nasdaq. Shareholders will vote on the deal at a 
> special November meeting. Glenayre has seen its share price dive from 
> almost $30 in March 2000 to 70 cents at the start of this week. The good 
> news is that the messaging carrier had $63M at the end of its second 
> quarter and no debt; company officials predict Glenayre will become 
> cashflow-positive by 2Q02.
>
> 4. WLL
>
> --Winstar is trying to get back on its feet and out of bankruptcy via the 
> approved sale of some of its assets: ISPNetworks division to WorldLEC 
> Communications Corp. for $500,000; its Winstar-NorthwestNexus division to 
> WorldLEC for $600,000; its Winstar-ICI division to WorldLEC for $700,000; 
> and its Winstar-XNET division to XNET Information Systems Inc. for 
> $500,000. It also has permission to sell its Equity Broadcasting Corp. 
> property, which is said to be worth $20M.
>
> --India's Bharat Sanchar Nigam Ltd. (BSNL) is gearing up to offer WLL in 
> the area now served by Calcutta Telephones by March 2002. Some 15,000 WLL 
> handsets will be distributed during the first phase of the rollout, which 
> only will cover a five-kilometer-wide swath; later, the network size will 
> double. BSNL also has WLL ops in Barasat, Chandannager and Joka.
>
> 5. PRIVATE RADIO
>
> --Two-way radio maker Relm won another couple of government handset deals, 
> this time selling more gear to the U.S. Forest Service for its California 
> operations in a deal worth $899,000; and supplying radios for new New York 
> City subway cars to the tune of $91,000.



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