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LTE-Unlicensed: How the Wireless Industry Plans to Conquer Your (and the Cable Industry’s) Home Wi-Fi Hotspot

special reportWith billions of dollars in new revenue and royalties to be made, Qualcomm and some members of the wireless industry are pushing regulators to quickly approve a new version of LTE wireless technology that will share many of the same frequencies used by home and business Wi-Fi networks, creating the potential for speed-killing interference.

Wireless operators believe LTE-Unlicensed (LTE-U) could be used to offload much of the growing wireless data traffic off traditional 4G LTE wireless data networks. With the cost of securing more wireless spectrum from regulators growing, LTE-U technology would allow operators like AT&T, Verizon, Sprint and T-Mobile to use the U-NII-1 (5150-5250MHz) and U-NII-3 (5725-5850MHz) unlicensed bands currently used for Wi-Fi to deliver high-speed wireless broadband traffic to their customers.

Qualcomm and Ericsson, behind the newest iteration of LTE, have a vested interest promoting it as the ideal choice for metrocell, indoor enterprise, and residential small cell applications. Every manufacturer incorporating LTE-U technology into everything from carrier-owned microcells to smartphones will owe royalty payments to both companies. With billions at stake, Qualcomm is doing everything possible to tamp down fears LTE-U signals will create harmful interference to Wi-Fi signals.

qualcomm lte-u

http://www.phillipdampier.com/video/CES2015 Qualcomm Demonstrates LTE-U 1-2015.mp4

At the Consumer Electronics Show in Las Vegas held in January, a Qualcomm representative went as far as suggesting LTE-U will improve home Wi-Fi service. (5:42)

RCRWireless News:

[Qualcomm] set up a screened room with eight pairs of access points occupying the same channel and added Wi-Fi access-point terminals in one room and LTE-U terminals in another. The results show the average throughput of 3.3Mbps with Wi-Fi alone more than doubled to 6.7Mbps when the LTE-U access point was introduced.

In another test to show that LTE-U is a better neighbor to Wi-Fi than Wi-Fi itself, they took eight Wi-Fi nodes and replaced four of them with LTE-U nodes, the result of which showed a 1.9Mbps increase in average Wi-Fi throughput. In almost every test, the LTE-U enhanced network outperformed traditional Wi-Fi.

Burstein

Burstein

Industry observer Dave Burstein is concerned advocates of LTE-U are trying to rush approval of the technology without verifying Qualcomm’s non-interference claims.

“The telcos are considering 40 and 80MHz channels that could easily swallow half of more of the Wi-Fi spectrum,” Burstein writes in response to an EE Times article about the technology. “If Wi-Fi is important, that’s a mistake to allow. Advocates are trying to rush it through even though there is not a single independent test or field trial.”

Qualcomm dismisses the interference complaints pointing to its own research showing the two standards can co-exist adequately. But multi-billion dollar wireless companies with nationwide Wi-Fi networks at stake are far less confident. In fact, LTE-U has already divided the two largest wireless carriers in the United States. Verizon Wireless is an original proponent of LTE-U while AT&T has expressed “concern,” a polite way of saying it isn’t happy. What separates AT&T and Verizon Wireless? AT&T has invested in a nationwide network of more than 34,000 Wi-Fi hotspots. Verizon offers just over 5,000, most for FiOS customers or those in especially high traffic venues.

A Stanford University professor with no ties to Qualcomm or the wireless industry privately shared his belief allowing 5GHz Wi-Fi signals to commingle with LTE-U is going to cause problems.

lte-u-unlicensed-spectrum-v3The development of “Wild West” Wi-Fi has always tracked differently than the licensed cellular/wireless business. Over more than a decade, evolving Wi-Fi standards have come to expect interference from other nearby Wi-Fi signals. In a densely packed city, more than two dozen Wi-Fi signals can easily be found all competing for their own space across the old 2.4GHz and newer 5GHz unlicensed bands.

Wi-Fi proponents credit its robustness to its “politeness protocol.” Before a wireless router or home hotspot fires up its Wi-Fi signal, it performs several tests to check for other users and constantly adjusts performance by backing off when it discovers interference from other signals. That is why a user can receive strong Wi-Fi signals but still endure reduced performance, as the hotspot accommodates nearby hotspots and other traffic.

It works reasonably well, according to Rupert Baines, a consultant at Real Wireless.

“But [Wi-Fi signals] are delicate, and they rely on implicit assumptions that there aren’t other things there (or aren’t too many),” Baines told EE Times. “In effect, they behave as though the unlicensed band were not technology neutral but were Wi-Fi only.”

The intrusion of LTE-U changes everything.

http://www.phillipdampier.com/video/Wireless Week Tuesdays with Roger LTE-Us Gain is Wi-Fis Loss 3-24-15.flv

On the March 24, 2015 episode of Tuesdays with Roger, Recon Analytics’ founder Roger Entner talks with Wireless Week about the questions raised as major carriers, including T-Mobile and Verizon Wireless, plan to launch LTE into unlicensed territory. Concerns abound, particularly for consumers and companies who rely on Wi-Fi and don’t want licensed use in unlicensed bands to interrupt that service. (7:31)

Change in and of itself is not necessarily a bad thing, especially if LTE-U is superior to Wi-Fi, and some proponents suggest it is. Jag Bolaria, an analyst at The Linley Group, argues LTE better manages data/call handoff better than Wi-Fi access points can. LTE is also a more efficient spectrum user than Wi-Fi.

Last week, South Korea’s LG U+ demonstrated LTE-U was capable of 600Mbps speed, eight times faster than traditional LTE. But to accomplish that level of speed, LG U+ had to occupy 60MHz of bandwidth in the 5.8GHz band and allocate an extra 20MHz from its traditional LTE service. The company plans to further expand its use of South Korea’s 5.8GHz unlicensed band by occupying 80MHz of it to further boost speeds to 750Mbps. But the company did not say how the tests affected others sharing the same frequencies.

If LTE-U is superior, then why not gradually move every user towards the technology and away from Wi-Fi?

Aptilo Networks AB CEO Torbjorn Ward answers LTE-U is a solution in search of a problem.

“I think LTE on unlicensed sounds like a good idea if it wasn’t for the fact that there are four billion devices on Wi-Fi out there,” he told Light Reading, noting that 802.11ac can already run at 100Mbps, so there’s little need for the LTE boost. “I think when it comes to unlicensed, you can do a longer range with LTE, but I don’t see the full benefit.”

That does not seem to matter to LTE-U’s developers or cell phone companies that lack robust Wi-Fi networks of their own.

as-is

In the original Qualcomm/Ericsson proposal, both companies promote the fact they could launch LTE-U in the unlicensed Wi-Fi bands “as-is.” That is a big problem for AT&T and other Wi-Fi users because LTE-U evidently employs few, if any protection protocols in its initial specifications for other traffic. Verizon Wireless is reportedly lobbying against the development of interference protection protocols and has publicly asserted its interest in deploying LTE-U regardless of other users.

“In [the] USA, there are no requirements for unlicensed deployment that require changes to LTE air interface,” Verizon stated in its proposal: “New Band for LTE deployment as Supplemental Downlink in unlicensed 5.8GHz in USA.”

LTE-Unlicensed has been characterized as "rude" for not avoiding interference to other users.

LTE-Unlicensed has been characterized as “rude” for not avoiding interference to other users.

Clint W. Brown, business development director of mobility wireless connectivity at Broadcom, and a vice-chairman of the Wi-Fi Alliance counters it is premature to approve LTE-U in the unlicensed Wi-Fi band without more testing and information about its interference protocols.

“We’ve heard about the tests they’ve done, but it’s not factual,” Brown told EE Times. We haven’t seen the data and we don’t know how the tests were set up. First, I’d like to see if [LTE-U] can detect low-level signals. Second, I want to make sure it features a ‘Listen before Talk’ decision process so that LTE-U will wait for an opening rather than barging into the conversation already taking place in the unlicensed spectrum. Third, there should be a back-off mechanism, when it sees a collision. “We aren’t aware of any publicly available documents explicitly stating those attributes.”

The Federal Communications Commission has also now taken an interest and issued a public notice asking stakeholders and consumers to share their thoughts on LTE-U and a companion technology known as Licensed Assisted Access (LAA) that would hand off data sessions between a wireless carrier’s traditional 4G LTE network and LTE-U.

The makes the discussion political as well as technical. The FCC traditionally permits industry groups to define standards, but Republican Commissioner Mike O’Rielly now worries the FCC might butt into that process.

“The decision to jump into this space rather casually causes me great concern,” O’Rielly said. “In particular, any step that could insert the commission into the standards work for LTE-U comes with great risk. I will be vigilant in ensuring that the commission’s involvement does not result in taking sides with various stakeholders, hindering technological innovation, or having any say about what technologies should or should not be deployed.”

monopolyFor the moment, O’Rielly’s concerns about the FCC are premature as long as a division exists over LTE-U among many of the industry players:

  • Companies FOR LTE-U: Verizon, China Mobile, Qualcomm, Ericsson, NTT DoCoMo, T-Mobile USA, Deutsche Telekom, TeliaSonera, and China Unicom.  Equipment manufacturers also in support: Nokia, NSN, Alcatel-Lucent, LG, Huawei, ZTE, Hitachi, Panasonic, and others;
  • Companies AGAINST LTE-U (as now defined): Orange, Telefónica, Vodafone, AT&T, Sprint, SouthernLINC, US Cellular, DISH and a handful of vendors.

Burstein also uncovered evidence the wireless industry may be stacking the deck against increased competition and consumers. He found 11 of the world’s largest wireless companies (including AT&T, T-Mobile, and Sprint) quietly colluding on a proposal that would block anyone other than currently licensed LTE users from being able to use LTE-U on a standalone basis. The opaquely-titled proposal, “Precluding standalone access of LTE on unlicensed carriers,” is at least frank about its reasoning: “Standalone deployment in unlicensed spectrum implies drastically different business models from nowadays and might impact the value chain.”

In other words, if consumers are able to get savings from LTE-U using a new generation of non-traditional providers like Republic Wireless or Cablevision’s Freewheel that do not depend primarily on cellular networks, it could cost those 11 traditional wireless companies billions in lost revenue. To stop that, the companies propose requiring a special LAA “guard signal” to stop standalone access of LTE-U. Since only licensed cell phone companies have access to those frequencies, it automatically locks out new upstarts that lack mobile spectrum of their own.

Sneaky insertions like that may be exactly why the Obama Administration’s FCC is being more activist about monitoring the wireless industry, potentially cutting off anti-competitive proposals before they can become adopted as part of a formal technical standard.

http://www.phillipdampier.com/video/Fairness to Wi-Fi and LTE unlicensed 5-8-2015.mp4

RCRWireless News gets deep into the development of LTE-Unlicensed and how it will impact cellular infrastructure, Wi-Fi and small cells. (25:39)

American Broadband Ripoff: Compare Your Prices With Eight Competing Providers in Bratislava, Slovakia

bratislvaThe largest telecom companies in the United States, their trade associations, and Ajit Pai, one of two Republican commissioners serving at the Federal Communications Commission routinely claim America has the best broadband in the world. From the perspective of providers running to their respective banks to deposit your monthly payment, they might be right. But on virtually every other metric, the United States has some of the most expensive broadband in the world at speeds that would be a gouging embarrassment in other countries.

Slovakia – A Long, Tough History, But Better Broadband than the United States

Bratislava, the capital city of Slovakia, has existed since the year 907. From the 10th century until just after the end of World War 1, the city (then commonly known by its German name of Pressburg) was part of Hungary and the Austro-Hungarian empire. After the “War to End All Wars,” ethnic Czechs and Slovaks jointly formed a democratic Czechoslovak Republic in 1918 which existed peacefully until the Germans arrived in 1938 and renamed part of Czechoslovakia… Germany.

Unfortunately for the Czechs and Slovaks, life didn’t get much easier after the end of World War II. As Stalin sought to create a buffer zone between Germany (and western Europe) and the Soviet Union, Czechoslovakia, along with most of Eastern Europe, faded behind the Iron Curtain into the Soviet sphere of influence.

The city center of Bratislava

The city center of Bratislava

After decades of deterioration under autocratic rule, the Czechoslovak Velvet Revolution of 1989 restored multi-party democracy and Communism was was on its way to being fully extirpated across Europe.

By the time the June 1992 election results were announced, it was clear the country’s constituent Czechs and Slovaks had irreconcilable differences and were headed to national divorce court. On one side, the Czech-oriented Civic Democratic Party, headed by Václav Klaus. On the other, Vladimír Mečiar’s Movement for a Democratic Slovakia, whose aims were obvious based on its party name alone. With the writing on the wall, Klaus and Mečiar managed to work out an agreement on how to divide the country and on Jan. 1, 1993 the Czech Republic and the Slovak Republic were born.

Since the separation, Slovakia has prospered, and is now recognized to have a high-income advanced economy with one of the fastest growth rates in both the European Union and the OECD. It joined the EU in 2004 and adopted the Euro as its currency in 2009. Slovakia had to bring its economy up to date after fifty years of Communism. The country had a functioning telecommunications infrastructure, albeit one highly dependent on dilapidated equipment produced in the German Democratic Republic (the former East Germany) and the Soviet Union.

After the Slovak Republic was born, Slovenské Telekomunikácie maintained a monopoly on Slovak telephone lines and telex circuits under the close watch of the Ministry of Transport, Posts and Telecommunications. It took until the year 2000 for economic reforms to allow for the privatization of telecommunications. As was the case in many other central and eastern European countries, Germany’s Deutsche Telekom (T-Mobile) won a majority ownership in the company, which is today still known as Slovak Telecom.

The Slovak Broadband Marketplace Today

Slovak-TelekomThe Slovak government insisted that telecommunications networks in the country be competitive and it maintains oversight to make sure monopolies do not develop. It rejected claims that total deregulation and competition alone would spur investment. Slovakia welcomes outside investment, but also makes certain monopoly pricing power cannot develop. As a result, most residents of Bratislava have a choice of up to eight different broadband providers — a mix of cable, telephone, wireless, and satellite providers that all fiercely compete in the consumer and business markets.

Many providers are foreign-owned entities. UPC, Slovakia’s cable operator, is owned by John Malone’s Liberty Global. Slovak Telecom is owned by Germany’s T-Mobile/Deutsche Telekom. Tooway is a French company.

300Prices are considerably lower than what American providers charge, although speeds remain somewhat lower than broadband services in Bulgaria, Romania, and the Baltic States. At one address on Kláštorská, a street of modest single family homes (some in disrepair), these companies were ready to install service:

  • RadioLAN offers 18/1.5Mbps unlimited wireless service for $21.85 a month;
  • UPC offers 300/20Mbps unlimited cable broadband for $30.63 a month;
  • Slovanet offers 10/1Mbps DSL with a 240GB usage cap for $18.56 a month;
  • Swan offers 10.2Mbps/512kbps unlimited DSL for $24.70 a month;
  • Slovak Telecom offers 10/1Mbps DSL with a 240GB usage cap for $21.96 a month;
  • Benestra offers 10/1Mbps DSL with a 4GB per day usage cap for $24.24 a month;
  • Satro offers 9Mbps/768kbps unlimited wireless service for $29.32 a month;
  • Tooway offers 22/6Mbps satellite Internet with a 25GB usage cap for $54.79 a month.

In other parts of the country, two providers are installing competing fiber broadband services. Slovak Telecom is slowly discarding its old copper wire infrastructure in favor of fiber optics, and is already providing 300Mbps service to some residents to better compete with UPC Cable. Some areas can get straight fiber service, others get VDSL, an advanced form of DSL offering higher speeds than traditional DSL. Orange, a provider not available in the immediate area of our sampled home, has already installed its own fiber service to over 100,000 fiber customers and is growing.

In comparison, Comcast sells 105Mbps service in Nashville, Tenn. for $114.95/mo (not including modem fee) with a 300GB monthly usage cap. That is one-third the speed of UPC Cable at nearly four times the cost… if you stay within your allowance. Prices only get higher after that.

T-Mobile: AT&T Gouges Us With Data Roaming Rates 150% Higher Than Average

bill shockT-Mobile has asked the Federal Communications Commission to investigate AT&T’s “artificially high roaming rates” charged when its customers travel outside of T-Mobile’s home service area.

T-Mobile is heavily reliant on AT&T for roaming service outside of major cities and the country’s smallest national wireless carrier complains AT&T is using their market power to put it at a major disadvantage, which could force new limits on roaming access in some areas.

T-Mobile provided examples of the damage already done by AT&T’s roaming rates:

“Limitless Mobile has severely restricted its customers’ access to AT&T’s network ‘for the sole reason that AT&T’s data roaming rates are too high and by continuing roaming access, Limitless could not maintain a commercially competitive retail wireless data offering to the general public,’” T-Mobile told the FCC.

The Rural Wireless Association noted that competing carriers “cannot sustain the provision of data roaming services if [they] must provide that service at a loss.”

The problem of data roaming rates is getting larger as carrier agreements are due for renewal at many mobile providers. Independent cellular companies are finding AT&T unwilling to renew at prices and terms comparable to their existing contracts. Instead, they face renewal rates that average a minimum of 10 and as much as 33 times higher than the national carriers’ retail rates.

For example, T-Mobile’s agreement with AT&T includes a data roaming rate that is now 150 percent higher than the average domestic rate that T-Mobile pays for data roaming.

This is one thousand percent higher than the data roaming rate negotiated between Leap Wireless and MetroPCS prior to their respective acquisitions, wrote T-Mobile.

With the stark price increases, carriers have begun imposing limits, including speed throttling and data caps, on customers when roaming on AT&T’s network.

t-mobile-set-recordBecause of AT&T’s artificially high roaming rates, T-Mobile wireless customers roaming in South Africa have a better user experience than customers roaming on AT&T’s network in South Dakota, argues T-Mobile. Their speed is twice as fast, and their data usage is unlimited.

T-Mobile is asking the FCC to intervene by establishing some type of standard about what constitutes “commercially reasonable” roaming rates as part of its 2011 Data Roaming Order, designed to protect competition.

This year, carriers dependent on Verizon Wireless or AT&T to help deliver “nationwide coverage” are negotiating roaming access to the companies’ 4G LTE networks for the first time. Most roaming agreements used to only cover 3G service, delivered at a slower speed.

If carriers like Sprint and T-Mobile are unable to negotiate fair terms, both companies will be at a major competitive disadvantage, relegated to providing only regional coverage or charging higher prices for roaming service.

AT&T vice president of regulatory affairs Joan Marsh said T-Mobile’s request bordered on being illegal, in direct violation of the Telecommunications Act. Marsh argued T-Mobile and other carriers should be incentivized to build their own networks instead of relying on cheap roaming access from companies like AT&T. Marsh added any move by the FCC to set rates or benchmarks would be beyond the FCC’s mandate. Wireless carrier rates are deregulated and not subject to common carrier regulation.

Sprint’s New Plans: Putting Lipstick on a Pig and Enraging Your Soon-to-Be Ex-Customers

tmobileIf this is the best Sprint’s Marcelo Claure can do, Softbank needs to keep shopping for another CEO.

Claure’s decision to deep-six the appallingly stupid Framily Plan was a no-brainer. Sprint’s own customer service agents barely understood the multi-level marketing scheme it actually was, and I never saw much value in alienating friends and family by cajoling them to use the atrociously bad Sprint network. Neither did Sprint employees who loudly cheered its upcoming demise.

Even Claure trashed Sprint’s network performance and upgrade program as glacier-slow and highly disruptive to customers who find nearby cell sites here today, gone tomorrow, and maybe back again someday when network upgrades have been finished. Unlike AT&T or Verizon where a cell tower outage might cut a few bars of signal strength, when a Sprint cell tower drops, it’s roaming time. It is not uncommon for residents along Lake Ontario’s shorelines in the United States to find their phones preferring to roam on Canadian networks (especially Rogers) to avoid Sprint.

Claure’s commitment to cut prices while cruelly excluding your current customer base from getting any of those savings is a sure-fire way to accelerate their departure… mostly to T-Mobile. John Legere is waiting with open arms.

Sprint doesn’t need to just cut prices, it needs to butcher them, and fast. Sprint’s loyal customers have been promised a lot since the company unveiled its Network Vision upgrade plan during the French Revolution of 1789. The Bastille might still be standing today had Sprint slapped a working 4G LTE antenna on top of it. But alas, let them suffer with Sprint 3G, declared Dan Hesse, on a network so bad that throttled customers in heavy-use prison actually saw their speeds rise. Some customers in western New York simply turn Sprint 3G data off to save the battery.

When Sprint 4G LTE finally did arrive in western New York (illogically first in rural communities like the stiflingly-dull town of Dansville), many barely noticed because Sprint’s backhaul connection between the cell tower and Sprint’s data network often stayed the same — congested and slow.

Although T-Mobile’s coverage is not that different from Sprint, its network upgrades are.

T-Mobile CEO John Legere has confidently pushed Sprint around over its newest plan, but if it does start to eat into T-Mobile’s business, Legere will no doubt respond with some new plans of his own. For current Sprint customers, T-Mobile is definitely the upgrade Sprint has promised for at least five years, and should be considered at contract renewal time. But current Verizon and AT&T customers paying Cadillac pricing should not be expected to switch to Sprint after recalling dropped calls in a store, home or in an emergency on Sprint’s less robust network. They are very unlikely to change carriers no matter what shade of lipstick Sprint applies to its plans.

Claure has the right idea — slash prices and actually deliver on promises of a better network going forward, but those commitments deserve to apply to both existing and new customers. So far Claure has managed to inflict only superficial wounds. The price cuts must go much deeper to attract business from customers of the larger carriers willing to compromise for the right price and upgrades have to be real and delivered immediately.

Sprint still doesn’t understand it cannot charge Honda Accord prices on a Chevy Spark network. Until they do, T-Mobile is likely to continue taking them to school.

 

Surprise Bid for T-Mobile USA from Iliad’s Free Mobile Has Wireless Competitors, Wall Street Unnerved

french revolutionThe French Revolution in wireless could be spreading across the United States if Paris-based Iliad is successful in its surprise $15 billion bid to acquire T-Mobile USA (right out from under Sprint and Japan-based Softbank). Wall Street hopes it isn’t true.

If you named one wireless carrier in the world guaranteed to provoke groans, sweat, and Excedrin headaches from powerful wireless industry executives living high on 40%+ annual margins, Iliad and its notorious Free Mobile would be the chief provocateur. Initially dismissed as an irrelevant upstart (much like T-Mobile itself) when it announced service on a less-robust network in 2012, as soon as Free Mobile announced its groundbreaking prices, panic was rife in the boardrooms and executive suites of competitors Orange, SFR and Bouygues Telecom, who couldn’t slash their own prices fast enough.

As one wireless executive in Paris put it, when Free Mobile launched, “the tsunami hit.”

In short order, Free Mobile has taken nearly five million of their competitors’ very profitable customers in France, mostly from its vicious price-cutting that results in rates half that of any other competitor.

Orange and other carriers promptly announced slashed shareholder dividend payouts and implemented cost-saving measures after being forced to cut pricing.

American wireless executives visiting Europe were aghast at the prices charged by the French upstart, suggesting they were reckless and would eliminate necessary investment in upgrades. Although France has been behind the United States in launching 4G service upgrades, French customer satisfaction with their wireless service is higher than in the U.S., and Free Mobile has the lowest customer loss (churn) rate of any carrier in France.

Iliad’s reputation as a nasty competitor is fine with self-made billionaire CEO Xavier Niel, who has become extremely wealthy selling cutting edge, yet affordable, telecommunications products without losing touch of his more modest roots. But he is reviled by most of his competitors for disrupting the comfortable wireless service business models his competitors have maintained for years. Niel has thrown marketing bombs into every sector of the French telecom market, ruthlessly cutting prices for customers while relying on in-house innovations to keep costs low.

http://www.phillipdampier.com/video/Euronews Telecoms turmoil in France 2012.mp4

Euronews reported on the turmoil Iliad caused incumbent wireless carriers when it forced them to respond with major price-cuts to stay competitive. (0:44)

freemobileFree’s customer care center is run on Ubuntu-based, inexpensive notebook and desktop computers. Free’s wired broadband, television, and phone service is powered by set-top boxes and network devices custom-developed inside Iliad to keep costs down. Its creative spirit has been compared to Google, much to the chagrin of its “business by the book” competitors.

“It’s not done like this,” is a common refrain heard when Free Mobile announces more price cuts, an easing of usage caps, or completely free add-ons.

Today, a typical Free Mobile customer pays $26.75US a month for wireless service which includes:

  • Unlimited calls to France and 100 other destinations, including the U.S., Canada, China, and all French overseas departments (eg. Guadeloupe, Tahiti, Mayotte, etc.);
  • Unlimited SMS/text messages;
  • Unlimited MMS messages to French numbers;
  • 20GB of 4G access before the speed throttle kicks in;
  • Unlimited free Wi-Fi on Free’s extensive Wi-Fi network.

A Free Mobile customer that also subscribes to Free’s wired broadband or television service gets an even bigger discount. Their monthly wireless bill for the same features? $21.40US a month.

Niel said the reason he has not brought the Free Mobile brand to the United States is because the wireless industry here is highly anti-competitive. The fact T-Mobile USA is now up for sale represents ‘the opportunity of a lifetime,’ a “one-time opportunity to enter the world’s-largest telecoms market,” a person familiar with the matter said prior to the announcement.

“The competitive landscape in the U.S. is a lot less aggressive than what we are used to in France,” added Niel. “There is enormous potential. It is almost too good to be true.”

A number of Wall Street analysts who prefer the current business model of high cost/high profits are keeping their fingers crossed the Iliad offer is just a pipe dream. Some, including analysts on Bloomberg TV, dismissed Niel as a former pornographer and suggested “for the guppies, it is whale season,” a reference to Iliad’s small size relative to T-Mobile USA.

“To say this is surprising is something of an understatement; it is one of the most bizarre bits of potential M&A we have ever witnessed in the sector,” said analysts from Espirito Santo in a note to investors.

http://www.phillipdampier.com/video/Bloomberg Who Is T-Mobiles New French Suitor 8-1-14.flv

Some on Wall Street are mocking the deal as a guppy hoping to swallow a whale. T-Mobile is considerably larger than Iliad, says CNBC. “It’s preposterous. Who put them up to it?” (6:18)

“Iliad is about a third of the size of T-Mobile US, and we don’t think there would be synergies from the deal,” said Jonathan Chaplin, an analyst at New Street Research, in a note. “It would be tough to finance without Xavier Neil relinquishing control. Sprint and anyone else with synergies should be able to outbid them.”

Should Free Mobile enter the United States, its cutthroat pricing would make CEO John Legere’s “bad wireless boy” campaign to make T-Mobile the “uncarrier” quaint in comparison. Every wireless carrier in the U.S. could be forced to cut rates by one-third or more to stay competitive should Niel adopt a similar business model for Free Mobile in the U.S. market.

Some worry that Softbank’s bid to merge Sprint and T-Mobile together has just become even less likely with the possibility of a new player in the U.S. market, competing against three other carriers, not two as the Softbank deal proposes.

http://www.phillipdampier.com/video/CNBC Sprint Deal with T-Mobile Has Little Chance 8-1-14.flv

CNBC spoke with Nik Stanojevic, equity analyst at Brewin Dolphin, who was surprised Iliad threw in a bid for T-Mobile, but believes Softbank/Sprint’s deal to acquire T-Mobile has very little chance getting by regulators. (2:40)

The Terrorists Win: Isis Mobile Payment Brand Flees From Its Own Name, Nobody Notices

The 1975 Saturday morning heroine delivered a morality message at the end of each episode.

The 1975 Saturday morning heroine

“O My Queen,” said the royal sorcerer to Hatshepsut, “with this amulet, you and your descendants are endowed by the goddess Isis with the powers of the animals and the elements. You will soar as the falcon soars, run with the speed of gazelles, and command the elements of sky and earth.” Three thousand years later, a young science teacher dug up this lost treasure and found she was heir to The Secrets of Isis. Andrea Thomas, teacher, and Isis, dedicated foe of evil, defender of the weak, champion of Truth and Justice.

Three thousand and one years later, AT&T Mobility, T-Mobile USA, and Verizon Wireless used their respective bank accounts to endow themselves with a mobile payment system called Isis they hoped would soar profits, run up your bill, and command the electronic payment universe. They called it Isis.

Three thousand and two years later a group of strict Wahhabist Muslims operating a terror group called the “Islamic State of Iraq and al-Sham” would establish a new caliphate covering sections of Syria and Iraq.

Seconds after they declared the new (generally unrecognized) state, the group set off terrorizing the local infidels and apostates in their midst, a/k/a Shia Muslims and Christians. Although the name of their newly declared independent nation, “Islamic State” is about as catchy as generic paper plates, the group’s abbreviated name was enough to provoke some serious Excedrin headaches.

They call it: ISIS.

The Other ISIS

The Other ISIS

Checkmate AT&T, T-Mobile and Verizon.

“However coincidental, we have no interest in sharing a name with a group whose name has become synonymous with violence and our hearts go out to those who are suffering,” said Isis CEO Michael Abbott. “As a company, we have made the decision to rebrand.”

Did Abbott just give in to the terrorists? Most Americans wouldn’t know or care, having never heard of the wireless industry’s payment system. In fact, with just 20,000 Isis Wallet activations per day, more Americans likely know that name from the 1975 Saturday morning TV series, The Secrets of Isis.

Which survives longer is open to question. Most consumers really don’t want or need an alternative to existing payment mechanisms.

According to a Forrester report released in December, “Understanding Digital Wallet Options For Your Business,” only 11% of US consumers have a digital wallet. “Driving consumer interest and adoption is a steep, uphill climb in developed markets because the current payment systems work quite well,” the report says.

Sprint Nears Deal to Purchase T-Mobile USA; $32 Billion Merger Will Face Regulator Scrutiny

And then there were three?

Official merger announcement due next month.

Several media reports breaking this evening report Softbank/Sprint is close to a deal to acquire majority interest in Deutsche Telekom’s T-Mobile USA in a deal that will combine the two carriers under the Sprint brand.

Bloomberg News reports Sprint has offered $40 a share for Deutsche Telekom’s T-Mobile USA — 50% in cash and 50% in stock. The deal will leave the German wireless carrier with a 15% minority ownership stake in the combined company. Sprint would still dwarf both Verizon Wireless and AT&T and would continue to be hampered by significant coverage caps in suburban and rural areas that neither Sprint or T-Mobile’s home networks cover.

The deal includes a breakup fee payable by Sprint if the merger is blocked by regulators or fails to be executed. Sprint reportedly offered $1 billion in cash and assets if the deal falls through, but Deutsche Telekom is reportedly seeking as much as $3 billion.

Masayoshi Son

Masayoshi Son

Bloomberg News previously reported a deal would probably be announced in June or July. It’s possible a deal announcement could slip into August, a source told Bloomberg. If no deal is reached by then, the sides are likely to stop negotiations for several years and wait for a new U.S. presidential administration more amenable to consolidation.

Billionaire Masayoshi Son, the founder of Japan-based SoftBank, which owns 80 percent of Sprint, faces skeptical regulators who are wary about eliminating one of four national wireless competitors. But in the last few days, executives at Sprint and Deutsche Telekom believe they can get the deal passed regulators preoccupied with a flurry of merger announcements, including Time Warner Cable and Comcast and AT&T and DirecTV. With a tidal wave of consolidation sweeping across the American telecommunications market, some industry insiders believe groups opposed to such deals will be overwhelmed trying to stop all of them.

More importantly, the issue of wireless spectrum was a key motivator to push the two companies towards a quick deal.

The Wall Street Journal reports the FCC originally considered barring AT&T and Verizon Wireless from bidding on airwaves that would have been set aside for smaller carriers. But a fierce lobbying effort by AT&T successfully nixed that plan and slashed the amount of spectrum available exclusively to smaller carriers. Sprint and T-Mobile believe the FCC’s decision gives them an opening to argue the government needs to allow a merger because it isn’t doing enough to help them compete.

FCC's Rosenworcel met privately with Wall Street analysts to tell them she'll keep an open mind on reviewing a T-Mobile/Sprint merger.

Rosenworcel

Another welcome sign for Sprint and T-Mobile is Democratic FCC commissioner Jessica Rosenworcel, who saw nothing wrong with holding private meetings with Wall Street insiders, telling them she would keep “an open mind” when considering the merger. With both Republican commissioners almost certain to approve a merger and Thomas Wheeler and Mignon Clyburn — both Democrats — likely opposed, Rosenworcel may have signaled she holds the deciding vote.

Prior to 2011, wireless consolidation was rampant, with an FCC predisposed to almost rubber stamping approval of buyouts and mergers. That changed in 2011 when AT&T tried to buy T-Mobile. It was the U.S. Justice Department, not the FCC, that led the charge against the deal, calling it anti-competitive. The Justice Department was vindicated when T-Mobile promptly launched new competitive service plans and pricing that forced price reductions and plan improvements from its competitors. T-Mobile has seen dramatic growth since launching its aggressively competitive service plans.

Sprint will likely claim T-Mobile’s competitive gains are illusory and will never offer a real competitive challenge to AT&T and Verizon’s market dominance. Despite the fact the combined company would still be far smaller than either AT&T or Verizon Wireless, Sprint is expected to argue it will be better positioned to fiercely compete for customers.

That argument is tempered by the fact that competition in the prepaid wireless market — already diminished by AT&T’s acquisition of Leap Wireless’ Cricket — will suffer even more if Sprint and T-Mobile, both major competitors in the prepaid market, are combined.

http://www.phillipdampier.com/video/Bloomberg Sprint T-Mobile Near Accord on Price Breakup Fee 6-4-14.flv

Sprint is nearing an agreement on the price, capital structure and termination fee of an acquisition for T-Mobile US that could value the wireless carrier at almost $40 a share, people with knowledge of the matter said. Alex Sherman has more on Bloomberg Television’s “Taking Stock.” (2:34)

Deutsche Telekom Agrees to Sell T-Mobile USA to Sprint, But Regulators May Balk

And then there were three?

And then there were three?

Deutsche Telekom has agreed to sell T-Mobile USA to the Japanese parent company of Sprint in a deal that would combine the third and fourth largest wireless companies in the United States under the Sprint brand.

Japan’s Kyodo News Agency said they learned about the buyout agreement from industry sources, but did not reveal any further details.

SoftBank CEO and Sprint chairman Masayoshi Son and his lobbyists have been promoting such a merger for weeks, so the outlines of a deal between the two companies come as no surprise.

SoftBank son

Softbank CEO Masayoshi Son

U.S. regulators have repeatedly signaled their discomfort with any merger between Sprint and T-Mobile, however. Both the heads of the Federal Communications Commission and the U.S. Justice Department have repeatedly raised concerns about the emergence of just three national wireless competitors in the U.S.

AT&T is largely responsible for that perception after its failed attempt to buy T-Mobile in 2011. The large breakup fee and spectrum T-Mobile received after the deal collapsed helped T-Mobile relaunch as a feisty competitor that has forced competitors to cut prices. To regulators, it demonstrated the importance of having at least four national competitors, if only to check the dominance of leaders AT&T and Verizon Wireless. Both the FCC and Justice Department fear any additional mergers would lead to increased prices for U.S. consumers.

Son has argued that the four-competitor policy has left AT&T and Verizon dominant against their two much-weaker competitors. An enlarged Sprint would force broadband speeds upwards as a combined Sprint and T-Mobile launch a massive network upgrade that would force prices down.

Both Softbank and Deutsche Telekom seem eager to close a deal. Softbank is already arranging financing for the estimated $50 billion Deutsche Telekom is expected to ask for T-Mobile USA and the German owner of T-Mobile has sought to exit the U.S. market for at least two years, with the proceeds of any sale used to improve its operations in Germany and eastern Europe, where the company has been more profitable.

So far, Wall Street has had only a muted reaction to the merger news. Many analysts still expect U.S. regulators to shoot down any deal that proposes merging any of the four current large wireless carriers.

SoftBank CEO and Sprint chairman Masayoshi Son was interviewed at this week’s Code Conference. On the current state of wireless: “Oh my god, how can Americans live like this?” (1:23)

A Merger Watch Has Been Issued for Your Internet Service, Cable-TV Provider

moneywedThe announced merger of Comcast and Time Warner Cable is expected to have far-reaching implications for other companies in the video and broadband business, with expectations 2014 could be one of the busiest years in a decade for telecom industry mergers and buyouts.

AT&T + DirecTV = Less Video Competition

Bloomberg News reports an announcement from AT&T that it intends to acquire DirecTV for as much as $50 billion could be forthcoming before Memorial Day. Such a merger would drop one satellite television competitor in AT&T landline service areas and promote nationwide bundling of AT&T wireless service with satellite television.

Historically low-interest rates would help AT&T finance such a deal and would turn DirecTV into a division of AT&T, easing concerns the satellite company has been at a disadvantage because it lacks a broadband and phone package.

“While the Comcast/TWC deal was the trigger, the backdrop of a slow macro economy, new competitors, shifts in technology and consumer habits all come together and force the need for more scale,” Todd Lowenstein, a fund manager at Highmark Capital Management Inc. in Los Angeles told Bloomberg.

Satellite television companies remain technologically disadvantaged to withstand the growing influence of online video and their subscriber numbers have peaked.

If AT&T buys DirecTV, the wireless giant could theoretically bundle its service with DirecTV’s video product, and in some areas of the country its U-verse high-speed broadband to the home, to compete with cable, said Amy Yong, an analyst at Macquarie Group in New York, in a note to clients.

Sprint + T-Mobile = Less Wireless Competition

Dish + T-Mobile = A Draw

mergerIn a less likely deal Sprint is still trying to pursue T-Mobile USA for a potential merger and if regulators reject that idea, Charles Ergen’s Dish Network is said to be interested.

To prepare Washington for another telecommunications deal, SoftBank founder Masayoshi Son’s lobbying firm, Carmen Group, has again been meeting with elected officials and regulators to argue the merits of a merger with T-Mobile, according to a person familiar with the matter.

Dish, which failed to buy Sprint last year, would be interested in acquiring T-Mobile if regulators block Sprint’s efforts, Ergen said. That hinges on whether SoftBank Corp. fails to win regulatory approval for its plan to buy T-Mobile, which is controlled by Deutsche Telekom AG, Ergen said last week. The Japanese wireless company owns 80 percent of Sprint.

All three deals carry a combined value of $170 billion in equity and debt and would impact 80 million Americans.

Suitors hope regulators will be in the mood to approve merger deals as they contemplate enlarging Comcast through its purchase of Time Warner Cable.

Even if all the deals don’t pass muster, Wall Street banks will still rake in millions in fees advising players on how to structure the deals. Goldman Sachs and J.P. Morgan would join executives winning considerable sums for reducing the number of competitors providing telecommunications services in the U.S.

Whether customers would benefit is a question open to much debate.

T-Mobile Unveils Operation Tablet Freedom and a $40 LTE Data Plan w/Unlimited Talk-Text

tmo tabletT-Mobile is back with some very aggressively priced packages on data plans, including one offering almost a year of free data. But more impressively, customers also have a chance to buy a 4G LTE-equipped tablet for the same price as a Wi-Fi only version.

T-Mobile’s Simple Starter Plan – $40/mo Unlimited Talk, Text + 500MB 4G LTE data

Simple Starter provides an affordable $40 unlimited talk and text offer with a 500MB entry-level data allowance with no overlimit fees. T-Mobile is intending to shame AT&T and Verizon to ditch overlimit fees on their data plans by demonstrating that a mobile carrier can automatically shut off data when a customer reaches their allowance, inviting them to voluntarily pay extra for continued service instead of slapping overlimit fees on the bill automatically. T-Mobile’s “data pass” resets the allowance, but often for only a limited time, such as $10 for one extra gigabyte, expiring after one week.

Still, the plan may be a comfortable fit for anyone unlikely to run a lot of data applications on their phone and prefer the convenience of having access to 4G speed when they need it. Some other carriers force value-priced plan customers to use 3G-only service, especially in the prepaid market.

Operation Tablet Freedom – Buy a 4G-equipped tablet at Wi-Fi prices, free 1GB data for the rest of 2014, free 200MB data for life.

tmobileThe biggest problem wireless carriers have selling tablets is justifying the cost of 4G-equipped models that typically run at least $100 more than a Wi-Fi only version. As a result, 4G-equipped portable devices like these just don’t sell well. T-Mobile is tackling that problem by discounting the MSRP of their 4G tablets to the same price one would pay for a Wi-Fi only equipped device.

T-Mobile is also offering trade-in deals for tablet customers who want something new.

“Now you can come to T-Mobile, trade it in and upgrade to a 4G LTE-enabled model and pay no more than you’d pay for the cheaper Wi-Fi-only model,” said T-Mobile’s Mike Sievert. “For example, you might choose to pay the Wi-Fi price of $499 instead of $630 for the 4G LTE-enabled iPad Air (16GB). Or pay the Wi-Fi price of $200 instead of $312 for the 4G LTE Samsung Tab 3. And remember, on all of these tablets you might qualify for no interest financing with nothing down.”

T-Mobile will also cover any early termination fees charged by your current carrier if you purchased one on contract.

Customers will also find good deals on tablet data plans. Beginning April 12, new and existing postpaid voice customers can add tablets to their plans and get nearly 1.2GB of data per month free for the rest of this year. In 2015, customers can keep that data plan for $10 a month or revert to T-Mobile’s 200MB for life data plan, free of charge. Customers who want a 3 or 5GB data plan will find them priced $10 off for the rest of 2014. Be aware that the free 1GB data offer does seem to require at least one voice plan, whether that’s an existing one or one you sign up for in store when you get your tablet.

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  • sandiegohdtv: In another part of my town, Cox offers this program as well. However, they offer it all year round and I believe you can register for it online....
  • sandiegohdtv: Made a huge error. It was 15 mbps to 60 mbps. Sorry, for that as I thought the filing meant that, but I did check it over again. I found out when it w...
  • Phillip Dampier: It's a bit complicated depending on where you live and who serves you: Regardless of what we want, it is almost a certainty TWC's and Bright House'...
  • JayS: Could you clarify #1 & #7. It appears that the acquirer, Charter, only offers one (1) level of internet speed. I would expect they would unify al...
  • Phillip Dampier: You will end up keeping your existing modem for phone service only (at no charge) and your own purchased modem will supply Internet access only. It's ...
  • Phillip Dampier: This is likely because Time Warner management has curtailed some of their most aggressive promos this year, so the ones you can get now cost a little ...
  • Phillip Dampier: I think most if not all premium channels are available on promo for $9.99. I do not know if they can handle swapping one for the other however....
  • Phillip Dampier: It probably isn't a "contract" but an agreement. If you were promised a two year commitment, they should be giving it to you. Probably the promo you w...
  • dawsonfiberhood: This reminds me how AT&T and TWC have squandered opportunities to avoid customer dissatisfaction by provisioning the modems at *exactly* the contr...
  • framistat: This doesn't always work. The Webster, NY office was helpful back in mid 2014 and continued my promo rate for basic internet @ 24.99 for a year. How...
  • Phillip Dampier: On what page do you see that referenced? I only saw mention of adopting Bright House's program. I will be very surprised in Charter offers a 15Mbps ti...
  • Phillip Dampier: Because MSNBC is wholly-owned by Comcast, it has a very special responsibility with viewers in how it covers its owner. In some earlier cases of media...

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