An Ignoble Experiment

2. Report: Verizon, AT&T consider blockbuster $245B joint bid for Vodafone's assets

AT&T (NYSE:T) reaffirmed its plans to launch HD Voice service on its LTE network this year, but other Tier 1 carriers are not rushing to embrace the technology. Verizon Wireless (NYSE:VZ), for example, will not push HD Voice through its Voice over LTE technology until late in 2013 or early 2014.

Separately, Sprint Nextel (NYSE:S) spokeswoman Kelly Schlageter told FierceWireless that the carrier expects to launch HD Voice "commercially in the next few months. It will not roll out nationwide right away, rather it will roll out market by market over a period of time."

Sprint's HD Voice launch represents a slight delay from the carrier's previous plans. Sprint launched the HTC Evo 4G LTE with HD Voice last year, and at the time promised to offer nationwide HD voice capability beginning in late 2012.

"HD Voice is part of our Voice over LTE strategy," said Kris Rinne, executive vice president of network technologies at AT&T Labs, in comments at the VentureBeat Mobile Summit. In January AT&T confirmed it would launch HD Voice through Voice over LTE technology sometime this year.

T-Mobile USA launched HD Voice earlier this year across its entire HSPA network. The carrier said the service is currently available on compatible handsets like the HTC One S, Nokia (NYSE:NOK) Astound and Samsung Galaxy S III. And T-Mobile's iPhone 5 will launch with HD Voice later this month.

Almost all commercial VoLTE launches worldwide are expected to eventually support HD Voice, which produces higher call quality and reduces background noise.

Verizon spokesman Tom Pica said Verizon will first launch VoLTE with Rich Communication Service technology, and then HD Voice thereafter. He told FierceWireless that "some time later in 2013 or 2014, we'll be ready to offer that (HD Voice) to customers who choose it as the only voice solution on the device."

For more:
- see this AllThingsD article
- see this VentureBeat article

Read more about: AT&T Mobility, HD Voice, Verizon Wireless
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By Phil Goldstein

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3. Ex-Windows Phone GM Kindel joins Amazon to spearhead 'something secret'

The Vodafone rumor mill keeps turning, with Verizon Communications (NYSE:VZ) and AT&T (NYSE:T) considering a joint bid for most of Vodafone's assets in a deal valued at $245 billion, according to a Financial Times report.

According to the report, which cited unnamed "usually reliable people," Verizon would buy Vodafone's 45 percent stake in Verizon Wireless while AT&T would take on Vodafone's non-U.S. assets. Such a deal would represent a 40 percent premium on Vodafone's share price, and would dwarf the next biggest takeover in history, AOL's $182 billion deal for Time Warner in 2000.

Verizon, AT&T and Vodafone declined to comment.

Such a deal would seemingly give all of the parties something they want: Verizon would get control of Verizon Wireless after years of angling; Vodafone would get a premium for its portfolio; and AT&T would get to expand in Europe. It should be noted that Vodafone CEO Vittorio Colao said in February that the company does not need to sell its stake in Verizon Wireless in order to invest more in Europe.

The rumors come weeks after Bloomberg reported that Verizon and Vodafone held talks that ranged from a merger of the two giant phone companies to Verizon merely buying Vodafone's 45 percent stake in the companies' Verizon Wireless joint venture. The report said Verizon wants to find a resolution to the two carriers' relationship this year.

While the size of a three-way deal involving AT&T, Vodafone and Verizon would be staggering, Medley Global Advisors analyst Jeffrey Silva said the transaction likely wouldn't present many competitive worries, since Verizon and AT&T would not be taking out a domestic competitor or expanding their domestic wireless footprints. "When you parse it out, at least in my initial review, on the U.S. front and on the U.K. front, I don't see where it raises any obvious antitrust problems," he told FierceWireless.

The bigger concerns, he said, are likely from a business and strategic perspective. He noted that AT&T does not have a huge presence in Europe and may want to use what he called the "inevitability" of Verizon getting full control of Verizon Wireless to expand across the Atlantic. "It would almost surprise me more if it doesn't happen at a certain point," he said.

Silva noted that, following AT&T's failed bid to acquire T-Mobile USA for $39 billion in 2011 and the re-election of President Obama, AT&T realizes that for the "next four years, they cannot do a deal of scale here."

"Becoming the world's largest wireless player would secure for AT&T purchasing power and competitive know-how that could be deployed domestically in its ongoing battle with the substantially larger Verizon Wireless (in post-pay)," Merrill Lynch analyst David Barden wrote in a research note last month,

In January the Wall Street Journal reported that AT&T was hunting for merger and acquisition opportunities in the European wireless market, betting it can roll out LTE technology there faster and make more money from new pricing schemes.

"As you consider what's happened in the last five years in the U.S. it's been impressive what transpired in the mobile Internet revolution and the U.S. has been outpacing the rest of the globe fairly considerably," AT&T CEO Randall Stephenson said on the company's fourth-quarter earnings conference call in January, according to a Seeking Alpha transcript. "And I think most people expect the rest of the world will catch-up and so the question you have to ask is are there opportunities for us to participate in that growth outside the U.S."

Stephenson, speaking in general terms, said that AT&T could create unique LTE roaming agreements or license applications in Europe. He emphasized that there are a lot of different options at AT&T's disposal.

For more:
- see this FT article (sub. req.)
- see this Bloomberg article
- see this NYT article

Related Articles:
Report: Verizon wants to resolve Vodafone relationship in 2013
Vodafone's Colao: We don't need to sell Verizon stake to bolster European markets
AT&T reportedly considering buying a European wireless carrier
Verizon Wireless to pay $8.5B dividend to parents Verizon, Vodafone
McAdam: Verizon Wireless won't pay annual dividend to Vodafone
Verizon Wireless to pay $10B dividend to Vodafone, Verizon Communications

Read more about: Randall Stephenson
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By Jason Ankeny

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4. Nokia's Elop sets sights on enterprise market

Close to two years after exiting his post as General Manager of Microsoft's (NASDAQ:MSFT) Windows Phone Developer Ecosystem program, Charlie Kindel has joined Amazon (NASDAQ:AMZN) to oversee an undisclosed project.

"I'm building a new team going after a totally new area for Amazon," Kindel writes on his LinkedIn profile, describing the position as director of "something secret." Kindel adds he is currently hiring cloud and mobile developers and testers, program managers and product managers.

Kindel confirmed his new role to GeekWire, explaining "Amazon presented an opportunity to build something new that has ginormous potential. I simply couldn't pass the opportunity up. As a double bonus, the idea that I can work in such a principled and customer focused company is really exciting to me." He said he is unable to divulge any further details about the initiative.

A 21-year Microsoft veteran, Kindel co-founded the company's eHome division and led the launch of the Windows Home Server initiative before taking the reins of the Windows Phone team. Kindel left Microsoft in mid-2011, weeks ahead of the release of the Windows Phone 7.1 operating system update--he soon launched his own startup BizLogr, which built an automated mileage reporting tool called MileLogr. BizLogr co-founder Stefan Negritoiu has assumed the CEO spot following Kindel's exit.

Kindel's decision to join Amazon will no doubt further fuel speculation the digital retail giant is working on its own branded Android smartphone. Rumors of an Amazon smartphone have circulated for months: Citing sources with knowledge of the matter, Bloomberg reported in July 2012 that Amazon tapped Foxconn to develop the device, adding the retailer has assembled a portfolio of patents covering wireless technologies to fend off potential allegations of infringement. A subsequent Verge report added the Amazon smartphone will run the same forked Android variant powering its Kindle Fire tablet.

A smartphone fits squarely within Amazon's larger vision for digital media dominance. Unlike Apple (NASDAQ:AAPL), which relies on content from its iTunes digital media storefront and App Store to boost sales of hardware like the iPhone and iPad--and unlike Google (NASDAQ:GOOG), which looks to Android to fuel revenues derived from its core advertising and search services--Amazon depends on affordable hardware to drive sales of e-books, music, movies and related content offerings. Its digital media revenues totaled $6.51 billion during the fourth quarter of 2012, up 8 percent year-over-year, and for the second year in a row, the Kindle Fire HD tablet was the company's best-selling and most-gifted item.

Amazon founder and CEO Jeff Bezos has strongly hinted Amazon plans to launch additional devices. Speaking to television interviewer Charlie Rose last November, Bezos joked "I agree that there are a bunch of rumors that we might do a phone." After Rose said "Of course, that answer leads us to believe that you are going to do it. You're just waiting for the right opportunity," a laughing Bezos responded "Well, you'll just have to wait and see."

For more:
- read this GeekWire article

Read more about: Windows Phone
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By Phil Goldstein

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5. Verizon scoops up rural carrier Mohave Wireless

Nokia (NYSE:NOK) CEO Stephen Elop said he is confident that the company's Lumia smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone can help the platform grab more market share, and said he is focused on the enterprise market as a major opportunity. However, analysts are worried that Nokia's lack of a 5-inch superphone to compete with the likes of the Samsung Galaxy S4 may be holding the company back.

"When we think about the milestones along this journey we are very focused on first getting to a double-digit market share, talking about Windows Phone collectively," Elop told The Guardian.

Research firm Gartner reported that Microsoft captured 3 percent of the global smartphone market in the fourth quarter of 2012, up from 1.8 percent in the year-ago period. IDC reported similar numbers, giving Microsoft 2.6 percent of the global smartphone market in the fourth quarter, up from 1.5 percent in the fourth quarter of 2011. And in Kantar Worldpanel's latest assessments from February, Windows Phone's share of the U.S. smartphone market rose to 4.1 percent year-over-year from 2.7 percent.

"Now we have to see if that builds and grows," Elop said. "It is about showing progress, strengthening the brand, improving the financials. It's hard to predict what rate over what time."

Elop seemed to indicate that Nokia has its sight set on taking advantage of BlackBerry's (NASDAQ:BBRY) transition to BlackBerry 10, and hopes to pick off some enterprise customers. "Virtually any [head of IT] out there today is probably thinking pretty hard about the investments they've made in a competing platform for business mobility," he said, while declining to name BlackBerry specifically. "This is an interesting time to reconsider what's the next generation, and of course we're looking at that as a real opportunity. It's a moment, it's a point of disruption."

Yet at the same time, analysts are worried that Nokia may have a big hole in its lineup: a 5-inch, high-end device. Nokia's flagship Lumia 920 has a 4.5-inch screen. Meanwhile, the fast-selling Samsung Galaxy Note II has a 5.5-inch diagonal screen, the forthcoming Samsung Galaxy S4 has a 5-inch screen and the HTC One has a 4.7-inch screen.

"This is a trend that can't be missed," IDC analyst Francisco Jeronimo told Bloomberg. "People are using smartphones in different ways now, consuming media by streaming over faster mobile networks. A 5-inch screen for a smartphone just feels right in the hand."

Nokia spokesman James Etheridge declined to comment on plans for bigger-screen smartphones and tablets, telling Bloomberg that the company is still assessing consumer interest in them.

While larger-sized screens are certainly a hot trend among smartphone makers, not everyone has embraced it. Apple's (NASDAQ:AAPL) iPhone 5 has a 4-inch screen and Apple was the largest U.S. smartphone maker in the fourth quarter and the second largest in the world behind Samsung. At the same time, Google's (NASDAQ:GOOG) Motorola Mobility sells the 4.7-inch Droid Razr Maxx HD, but Motorola is no longer considered a mobile phone powerhouse.

Yet other companies are moving toward devices with even larger screens. ZTE's Grand Memo has a 5.7-inch screen and Huawei's Ascend Mate has a massive 6.1-inch display.

For more:
- see this Guardian article
- see this Bloomberg article

Read more about: samsung, HTC
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By Phil Goldstein

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