Home » Wireless » Recent Articles:

Reuters Exclusive: T-Mobile, Sprint Could Sell Boost Prepaid for Up to $3 Billion, Potential Bidders Say

(Reuters) – A group of potential buyers are preparing bids for prepaid wireless brand Boost Mobile in an upcoming sale valuing the offshoot of U.S. wireless carriers T-Mobile US Inc and Sprint Corp at up to $3 billion, interested buyers told Reuters.

The $26 billion deal between T-Mobile and Sprint won approval from the U.S. Federal Communications Commission last week after the two carriers offered concessions. It included the sale of Boost to reduce the combined company’s market share in the prepaid wireless business, where customers pay for phone service at the beginning of the month and are not required to pass a credit check.

While the deal awaits a ruling from the U.S. Department of Justice, interested parties are already preparing bids. The sale process is expected to begin after the Justice Department’s review.

Q Link Wireless, a prepaid brand and the third-largest provider of federally assisted wireless plans, is putting together a package to bid for Boost with private equity backing and could pay between $1.8 billion to $3 billion, founder and Chief Executive Issa Asad told Reuters.

The price will depend on the quality of Boost’s customers, such as their level of churn, or the rate of customer cancellations, the devices they are using, and what type of phone plan they are on, none of which the companies have disclosed, he said.

This month, analysts at Cowen estimated Boost has 7 million to 8 million customers and a transaction could be valued at $4.5 billion if the deal included wireless spectrum, or the airwaves that carry data, and facilities. Sprint has not disclosed the number of Boost customers.

Stephen Stokols, chief executive officer of prepaid wireless company FreedomPop, said an undisclosed private equity group he is speaking with have placed Boost’s future value at about $4 billion, such as in an initial public offering.

While FreedomPop is not a bidder, Stokols said he is advising a private equity group preparing a bid. If that bid succeeds, he believes the group would combine their acquisition with FreedomPop and have him lead a combined company with the Boost assets.

Peter Adderton, founder of Boost Mobile who sold the U.S. business to Nextel in 2004, which was then acquired by Sprint, has also said he is interested in buying back Boost. He declined to comment on his valuation for the business.

Adderton said he and his lawyers have urged regulators to require T-Mobile and Sprint to also divest wireless spectrum to ensure Boost will be a viable competitor in the market.

Adderton added that regulators must also ensure the new T-Mobile does not employ anticompetitive practices to harm Boost, and the contract between the companies should be non-exclusive, which would allow Boost to buy network access from other carriers.

The current sale agreement is devoid of details, but with the right terms, “we can create a dynamic player that will compete in the market,” Adderton said of Boost.

T-Mobile and Sprint did not immediately respond to requests for comment.

Reporting by Sheila Dang; Editing by Kenneth Li and Lisa Shumaker

Altice Preparing to Offer $20-30/Mo Unlimited Data Mobile Plan

Altice USA could be your next cell phone provider, if you subscribe to Cablevision’s broadband service in the metro New York City area.

The Wall Street Journal reports Altice is preparing to launch an unlimited calling/texting/data plan that will cost between $20-30 per month, powered by Cablevision’s in-home Wi-Fi, its network of public Wi-Fi hotspots, and Sprint’s 4G LTE network.

The service, likely to be called Altice Mobile, is the latest entry from cable operators pitching low cost mobile service as an incentive to keep customers from switching providers. Altice will charge dramatically less for its unlimited plan than Xfinity Mobile and Spectrum Mobile ($45) — both reselling Verizon Wireless service — (with speeds reduced to 1 Mbps download and 512 kbps upload after 20 GB of data usage in a month.)

Customers using AT&T and Verizon pay even more. Unlimited monthly plans for a single phone start at $80 at Verizon and $70 at AT&T, depending on bundling certain other AT&T-owned services. For less than half the price, Altice Mobile would deliver all the same services larger providers offer, although Altice intends to offload as much usage as possible to its network of Wi-Fi hotspots, to keep costs low. Before Altice acquired the cable company, Cablevision built a major Wi-Fi presence in the New York City metro areas where it provides cable service. Altice announced it intends to strengthen that network to support its mobile initiative, including the possibility of deploying its own small cell network.

Where Altice cannot supply its own wireless connection, it will rely on Sprint to take over, paying the cell phone company for its customers’ traffic. In return, Sprint will be able to bolster its network in Altice’s service area, perhaps even using Altice’s fiber-to-the-home network, now under construction. That could help Sprint launch 5G service relatively soon in the region, regardless of whether its pending merger with T-Mobile USA is approved. To protect the venture, Altice has secured an agreement with both T-Mobile and Sprint not to terminate its contractual agreement with Sprint should a merger be approved. But the service will still be dependent on network owners like Sprint willing to sell connectivity. Should Altice Mobile take a significant share of the market, network owners may be reluctant to renew such contracts, or price them much higher at renewal time, raising prices.

The cable industry’s incentive for getting into the wireless business, even if it proves unprofitable, is plain to see. All entrants require their mobile customers to maintain a broadband account in good standing to qualify for mobile service. Comcast, Charter, and Altice are aware their video packages are increasingly untenable in a cord-cutter’s marketplace, but maintaining internet service remains essential. In most areas where the cable operators provide service, Verizon or AT&T also sells both broadband and wireless service. Customers may be reluctant to bounce between providers looking for a better deal if they also have to switch mobile providers at the same time.

AT&T Expects to Offer “Nationwide” 5G and Fiber Broadband Service Within 3-5 Years

Stephenson

AT&T CEO Randall Stephenson on Tuesday told investors that AT&T will deploy a combination of fiber optics and 5G wireless and be able to sell a “true, high-speed internet network throughout the United States” within the next three to five years.

“In three to five years out, there will be a crossover point,” Stephenson told investors. “We go through this all the time in industry. 5G will cross over, performance wise, with what you’re seeing in home broadband. We’re seeing it in business now over our millimeter-wave spectrum. And there will be a place, it may be in five years, I think it could be as early as three, where 5G begins to actually have a crossover point in terms of performance with fiber. 5G can become the deployment mechanism for a lot of the broadband that we’re trying to hit today with fiber.”

Although the remarks sound like a broadband game changer, Stephenson has made this prediction before, most recently during an AT&T earnings call in January, 2019. Stephenson told investors he believed 5G will increasingly offer AT&T a choice of technology to deploy when offering broadband service to consumers and businesses. In high-cost scenarios, 5G could be that choice. In areas where fiber is already ubiquitous, fiber to the home service would be preferred.

Stephenson’s predictions about nationwide service will depend in part on the commercial success of millimeter wave 5G fixed home broadband, which will be required to satisfy broadband speed and capacity demands. Verizon Wireless has been offering fixed 5G in several markets with mixed results. The company’s early claims of robust coverage have been countered by Verizon’s own cautious customer qualification portal, which is more likely to deny availability of service to interested customers than offer it.

But Stephenson remains bullish about expanding broadband.

“So all things considered, over the next three to five years, [with a] continued push on fiber, 5G begins to scale in millimeter-wave, and my expectation is that we have a nationwide, true, high-speed internet network throughout the United States, [using] 5G or fiber,” Stephenson said.

Whether anything actually comes of this expansion project will depend entirely on how much money AT&T proposes to spend on it. Recently, AT&T has told investors to expect significant cuts in future investments as AT&T winds down its government-mandated fiber expansion to 14 million new locations as part of approval of the DirecTV merger-acquisition. In fact, AT&T’s biggest recent investments in home broadband are a result of those government mandates. AT&T has traditionally focused much of its spending on its wireless network, which is more profitable. For AT&T to deliver millimeter wave 5G, the company will need to spend billions on fiber optic expansion into neighborhoods where it will place many thousands of small cell antennas to deliver the service over the short distances millimeter waves propagate.

AT&T could sell a fixed 5G broadband service similar to Verizon Wireless, confine its network to mobile applications, or offer fixed wireless service to commercial and manufacturing users in selected areas. Or it could offer a combination of all the above. AT&T will also need to consider the implications of a fiber buildout outside of its current landline service area. Building fiber optic networks to provide backhaul connectivity to AT&T’s mobile network would not antagonize its competitors nearly as much as the introduction of residential fixed 5G wireless as a home broadband replacement. The competitive implications of that would be dramatic, especially in communities skipped by Verizon FiOS or stuck with DSL from under-investing independent telephone companies like CenturyLink, Frontier, and Windstream. Should AT&T start selling 300+ Mbps fixed 5G wireless in these territories, it would cause significant financial distress for the big three independent phone companies, and could trigger a competitive war with Verizon.

Wall Street is unlikely to be happy about AT&T proposing multi-billion dollar investments to launch a full-scale price war with other phone and cable companies. So do not be surprised if AT&T’s soaring rhetoric is replaced with limited, targeted deployments in urban areas, new housing developments, and business parks. It remains highly unlikely rural areas will benefit from AT&T’s definition of “nationwide,” because there is no Return on Investment formula that is likely to work deploying millimeter wave spectrum in rural areas without heavy government subsidies.

For now, AT&T may concentrate on its fiber buildout beyond the 14 million locations mandated by the DirecTV merger agreement. As Stephenson himself said, “When we put people on fiber, they do not churn.” AT&T has plenty of runway to grow its fiber to the home business because it attracts only about a 25 percent market share at present. Stephenson believes he can get that number closer to 50%. He can succeed by offering better service, at a lower price than what his cable competitors charge. Since 5G requires a massive fiber network to deploy small cells, there is nothing wrong with getting started early and then see where 5G shakes out in the months and years ahead.

Average Spectrum Broadband-Only Customer Now Using More than 400 GB a Month

Charter Spectrum’s broadband-only customers run up more than double the amount of broadband usage average customers subscribing to both cable TV and broadband use, and that consumption is growing fast.

“Data usage by residential internet customers is rising rapidly and monthly median data usage is over 200 GB per customer,” Charter CEO Thomas Rutledge said on a morning quarterly results conference call. “When you look at average monthly usage for customers that don’t subscribe to our traditional video product, usage climbs to over 400 GB per month.”

Last week, Comcast reported its average broadband customer also used over 200 GB a month, but did not break out the difference between those subscribing to cable TV and those who do not. If Comcast’s broadband-only customers are consuming a comparable amount of data, they could be nearing half of their monthly usage allowance (1 TB), in markets where Comcast caps its customers’ usage. But because that is only an average, it means many more Comcast customers are likely nearing or now exceeding Comcast’s data cap, exposing them to hefty overlimit penalties.

Spectrum does not impose any data allowances on its customers — all usage is unlimited.

Charter officials also reported their average mobile customers use “well under 10 GB a month.” The fact Charter did not get more specific about mobile usage is important because the new product is getting scrutiny from some on Wall Street concerned it will have a hard time becoming profitable because of its wholesale agreement with Verizon Wireless, which provides the 4G LTE service for Spectrum Mobile.

Subscribers have been primarily drawn to the $14/GB plan, which includes unlimited talk and texting, because it offers a very low entry price for a full-function wireless plan. But a customer only needs to use more than 3 GB of service per month to find their bill higher than what they would pay subscribing to Spectrum Mobile’s $45 unlimited usage plan. If Charter executives said the average mobile user consumed 5 GB of data, analysts could deduce what the average customer bill probably looked like. To maximize profits, Charter needs customers to select an unlimited data plan and keep data usage low to assure it can cover the wholesale costs Verizon Wireless charges the cable company for wireless connectivity.

Rutledge

Rutledge stressed he expects Spectrum Mobile to be profitable with the current Verizon Wireless MVNO contract in place — the service simply needs a larger user base to overcome its current losses.

Rutledge also announced Spectrum Mobile was testing dual SIM technology, which could allow it to eventually offload more of its 4G LTE traffic to its own (cheaper) network, which could eventually include mid-band wireless spectrum and the CBRS spectrum the company is already testing for fixed wireless service for rural areas. Spectrum could also follow Comcast with its own in-home network of publicly available Wi-Fi or innovate with unlicensed wireless mobile spectrum using small cells or external antennas.

Charter executives noted that customer data demands were pushing many to upgrade to higher speed internet products.

“Over 80% of our internet customers are now in packages that deliver 100 Mbps of speed or more and 30% of our customers are getting 200 Mbps or more,” Rutledge said. “We’re also seeing strong demand for our Ultra product, which delivers 400 Mbps, and we have gigabit service available everywhere.”

The costs to continue upgrading service for broadband customers are negligible on the company’s current platform, Rutledge admits. In the future, Charter Spectrum is considering offering 10 Gbps and 25 Gbps symmetrical service to customers, and it can scale up upgrades very quickly.

“For example, in only 14 months we launched DOCSIS 3.1, which took our speeds up to 1 Gbps across our entire footprint at a cost of just $9 per passing,” Rutledge said.

Verizon’s Rush to Mobile 5G Was Mostly About Bragging Rights and Beating South Korea

Verizon’s not-quite-ready-for-prime-time mobile 5G network hurriedly held a public launch event April 3rd using a small network of 5G millimeter wave small cells installed in downtown Chicago and Minneapolis, despite employee admissions there were significant issues with the network’s reliability, coverage, and stability.

Driving Verizon was a chance to win bragging rights by claiming ownership of the world’s first, publicly available, mobile 5G network. In a company-produced video intended for employees, it quickly becomes apparent Verizon was preoccupied by South Korea’s own race to launch mobile 5G, and daily meetings at Verizon’s offices in New Jersey hinted at pressure to announce Verizon’s own 5G launch day as soon as possible.

It was also clearly a priority for Verizon’s new CEO, Hans Vestberg.

“Since I came into Verizon, this is the first thing I wanted to do,” Vestberg said. “I want to be first on 5G in the world.”

But was the network ready for launch and fit for purpose? As of April 1, there were still coverage, latency, and speed issues. Garima Garg, from Verizon’s Network Performance, said the 5G network was “very unstable” early in the first week of April. Attempts to test every smart cell in Chicago were unsuccessful. Garg said the team couldn’t connect to several of them.

Besides beating South Korea, Verizon’s goal was to launch 5G with speeds better than its 4G LTE network and AT&T’s enhanced 4G LTE service it calls “5Ge.” To test network performance, Verizon employees ran countless speed tests, often just across the street from light pole-mounted smart cells around 100 feet away. Just a day or so from launch, Verizon testers were still trying to address network problems, including packet loss and delayed acknowledgments on the TCP side of the uplink, which ‘really hurt speed.’ Verizon claims it resolved some of these problems in the final hours before launch with a custom software build.

Verizon’s efforts almost came to naught, because SK Telecom, South Korea’s largest wireless operator, suddenly surprised the public with a star-studded “5G Launching Showcase” the morning of the 3rd. SK Telecom technically beat Verizon’s attempt to be first to launch, but Verizon pointed out only a handful of celebrities, social media influencers and so-called “brand promoters” were given smartphones capable of connecting to SK Telecom’s 5G network. Verizon’s spin was that South Korea’s launch was effectively a publicity stunt, as no consumer could walk into a store and buy 5G capable devices on that date. Verizon’s launch, however, would be different. Any customer could immediately walk into a Verizon store in the two launch cities and walk out with a smartphone capable of connecting to 5G on the first day the network was switched on. Just in case SK Telecom had any other surprises planned, Verizon decided to move up its official launch date.

Garg (Image courtesy of: Verizon)

On the morning of April 3, Vestberg appeared in a friendly and exclusive CNBC interview announcing the launch of Verizon’s 5G mobile network. By the following day, tech reporters in Chicago gave the network its first thorough test, and found many of the same issues that had concerned Verizon engineers earlier that week. Not only was Verizon’s 5G service area miniscule, several small cells appeared not to be working at all (or at least were not available for connections), and after a day using Verizon’s 5G network, the service was deemed “unreliable” by PC.

Reporters used Moto Z3 phones with the new 5G Moto Mod back panel, which snaps on the back of the phone and delivers 5G connectivity to the Z3. The Mod concept is neither an elegant or inexpensive solution, turning the Z3 into a bulky and heavy handset. The Moto Mod also has its own battery, and not a high-capacity one at that. Testers reported it was dead after five hours of significant use. It cannot be recharged by the phone either. At some locations, reporters were able to verify Verizon’s 5G network did deliver a significant improvement in speed — up to 600 Mbps peaks on small cells that likely had few, if any other customers connected at the time. But the densest parts of Chicago’s downtown were already well-served by Verizon’s 4G LTE network, which capably peaked at 400 Mbps.

Verizon’s mobile 5G network relies on millimeter wave frequencies, which are very short-range and sensitive to solid objects, which can block or degrade the signal. Despite Verizon’s earlier claim that it saw better than anticipated range and performance from the company’s millimeter wave fixed wireless service running in a few other cities, real world testing showed the effective range of Verizon’s smart cells was less than expected for mobile users. Verizon claimed up to 800 feet of range from each 5G small cell, but testing found that claim wildly optimistic.

“I saw more like 300 feet of effective range, with speeds dropping below LTE levels beyond that, even though my 5G indicator would dutifully flicker on until about 450 feet,” reported PC’s
Sascha Segan. “The Mod seems unable to judge when a 4G connection would be better than a 5G one, so it hangs on to 5G for dear life even if it’s just eking out a few megabits. A phone should probably prefer a good lower-gen connection over a poor higher-gen one.”

Real world testing also revealed the expected shortcomings of mobile 5G — it can be downright terrible indoors.

“Stand under the cell site, you get 600 Mbps down. Go into the Starbucks, through glass, and that’s cut to 218 Mbps,” Segan wrote. “Go around the corner and duck into the lobby of a stone building that doesn’t face onto the site, and you’re down to 41.5 Mbps. Lower frequency bands do not have this behavior.”

Of course, it is early days for Verizon’s 5G and network and software improvements are likely to significantly improve service. But Verizon’s experience strengthens the theory that small cells are likely to thrive only in dense population areas where there is already a high traffic demand. It seems unlikely that Verizon’s 5G network will make economic sense to deploy in outer suburbs and rural areas. It may not even play well in the suburbs.

Verizon produced this video covering the challenges launching their mobile 5G network in Chicago and Minneapolis in early April. (12:34)

Search This Site:

Contributions:

Recent Comments:

  • Lee: If their equipment can not reach the download speed they sold you that is fraud. No it will not be a constant speed that matches what they sold, but i...
  • Lee: If the TV packages disappear the price of the streaming services will increase. The people who produce the content will not willingly sell for less....
  • Ann Warner: Is altice service available for tracphone users in Beaufort County?...
  • Rick: I don't think I have ever run into a more poorly run company. A single phone line cost $110 per month - far more than most alternatives. VM stoppe...
  • Anthony: I ordered mine and I have my own modem and router. Got it yesterday....
  • beverly: I've tried to stay a Frontier customer, but they just don't want to have me. They've done nothing to keep me, they promised a discount because we have...
  • Janeth: Eventhough they still will not refund you the money. They gave me a bogus tracking number for a refund. They are a scam....
  • Paratroop: I worked for them for nearly 20 years then the merger took place. Took me just 2 years to figure out I gots to go. Now this crap is stupid. I took ...
  • Fred Jones: I wonder who is going to be transmitting 4K OTA TV. I can't find any info that any of the 4 major networks have any plans for this....
  • Armando Trevino: Sir, your company is not focused on customer service. Rude people. I keep receiving documents in Spanish even though I am an American Veteran who o...
  • Jerrdale: Looks to me like P.T. Barnum was correct. All these complaints, yet I found this site by researching before spending money. People, never, ever believ...
  • T.B.Told: After Frontier dumped yet again 10 more channels Starz/Encore we decided our contract was null& void. We were promised a credit which we never saw...

Your Account: