An Ignoble Experiment

2. AT&T's revamped Cricket will take on T-Mobile's MetroPCS with Aio-like look, rate plans

AT&T's (NYSE: T) announcement that it will buy DirecTV (NASDAQ: DTV) in a $49 billion deal leaves Dish Network (NASDAQ: DISH) once again without a potential partner or suitor. However, analysts say the deal could be what pushes Dish and its Chairman Charlie Ergen to find a long-term wireless partner.

Dish controls more than 50 MHz of spectrum, including 40 MHz in the AWS-4 band and 10 MHz of the 1900 MHz PCS H Block, part of which is adjacent to AWS-4. Many analysts and investors had speculated that Dish could be a takeover target for either AT&T or Verizon (NYSE: VZ), though AT&T is obviously out now. Speaking in the context of the billions of dollars Dish has spent to acquire spectrum, Ergen said earlier this month "we're ready to harvest our investments."

Yet with speculation building that Sprint (NYSE: S) will try to merge with T-Mobile US (NYSE:TMUS), and Ergen noting that Dish would not try to outbid Sprint, the question returns to what Dish will do with all of its spectrum. By the end of 2016 Dish must cover at least 40 percent of the population in areas covered by its AWS-4 spectrum with a wireless network or face penalties.

Ergen recently outlined the company's strategic options on Dish's first-quarter earnings conference call--and said he felt good about them. Ergen said it was unlikely, but a possibility, that Dish could build out its wireless network itself. However, as he has in the past, he said he remains open to selling Dish, merging with another company or partnering with another firm.

"We have to be well-positioned so that no matter what happens it's all good for us, and I think we're there," he said. He also said that if "Sprint didn't proceed or was denied, then T-Mobile would have strategic interest to us, yes."

"On the one hand this is a negative for Dish because it takes the two most likely merger partners off the table," New Street Research analyst Jonathan Chaplin wrote in a research note, referring to AT&T and DirecTV. On the other hand, he wrote, Dish's spectrum, which also includes some 700 MHz airwaves, could be worth as much as $29 billion. He also wrote there "are still potential merger partners in Verizon (most likely), TMUS and Sprint."

Credit Suisse analysts Joseph Mastrogiovanni and Michael Baresich wrote in a research note that they would be surprised if Ergen "sat on the sideline for long." They speculated that even though Ergen said Dish could not compete with AT&T for DirecTV, he could try and it might at the very least force AT&T to make a higher offer.

The Credit Suisse analysts also wrote that Dish could "look to acquire T-Mobile or partner with T-Mobile or Sprint to build a wireless network. This deal could be a catalyst that causes Dish to act sooner rather than later. Furthermore, discussions with T-Mobile could push Sprint into making a move sooner rather than later."

Dish is also working with Sprint on a trial of fixed TD-LTE service in Corpus, Christi, Texas. The companies have said that service will be available in the middle of 2014, but have not provided a more specific timeline than that. Sprint CFO Joe Euteneuer said at an investor conference Monday that the companies are continuing to work on the deployment to get it ready for operation, but he declined to say more than that.

For more:
- see this WSJ article (sub. req.)

Related Articles:
AT&T to purchase DirecTV in $49B deal
Dish's Ergen leaves door open for T-Mobile deal if a Sprint/T-Mobile effort fails
Analysis: Sprint, Dish could broaden partnership - but it would be complicated
H Block auction ends at $1.564B, with Dish Network as likely winner
Sprint, Dish to launch trial of fixed TD-LTE service on 2.5 GHz in mid-2014

Read more about: DirecTV, Verizon Wireless, Charles Ergen
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By Sue Marek

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3. Verizon confirms 'XLTE' marketing for LTE network to highlight AWS deployments

ATLANTA--Just two months after AT&T Mobility (NYSE: T) completed its $1.2 billion acquisition of Leap Wireless' Cricket-branded prepaid service, the company is introducing a revamped Cricket service with a new tagline, price plans and store design.

Click here for a slideshow of Cricket's new retail stores.

Speaking to a group of reporters at a Cricket concept store in an Atlanta suburb Thursday, Jennifer Van Buskirk, president of Cricket Wireless and formerly the head of AT&T's prepaid brand, Aio Wireless, said that the company is taking its legacy Cricket service and revamping it to give customers a better network, more affordable pricing, greater handset selection and a "friendlier" retail experience. "We want to offer [customers] a brand they can be proud of," she said.

The new Cricket will still cater to the price conscious consumer, a market that is becoming more and more competitive. Cricket executives clearly have their eye on T-Mobile's MetroPCS as the key competitor in this space and mentioned that company frequently when talking about the competitive landscape.

As previously rumored, Cricket's new rate plans will feature the following price points, which executives said includes all taxes and fees:

$40 per month basic plan that offers 500 MB of data, before throttling;
$50 per month smartphone plan that includes international texting and 2.5 GB of data, before throttling; and
$60 Pro plan that that offers international texting and 5 GB of data, before throttling.

In addition, Cricket will drop the price of the monthly plans by $5 to $35, $45 and $55 if the customer selects the autopay option. Cricket also is offering customers who make 12 on-time payments in a year a $50 device credit, or reward, that can be used to upgrade to a new phone.

The company also is giving customers discounted monthly rates when they combine wireless lines within the same family or group of friends. These group plans let customers purchase four lines for $100 and they can mix and match both the Smart and the Pro plans.

The "new and improved" Cricket will also feature a new retail look with an open and simple design and bright green signage. Displays feature smartphones grouped by operating system with accessories hanging below. Also notable is a "Kids Play" area that Cricket executives hope will appeal to their clientele.

In fact, the company is so bullish on its new, friendlier image that it has a new tagline that builds off that theme: "Something to Smile About."

If the new Cricket feels familiar, that's likely because it closely resembles Aio Wireless, AT&T's prepaid brand that launched last year in about 27 markets in Alabama, California, Florida, Georgia, Indiana, Louisiana, Michigan, New York, Ohio, Texas and Washington. AT&T is in the process of converting its Aio stores into Cricket stores. In addition, Cricket plans to open new retail outlets in markets where the Cricket brand has not existed before. According to Van Buskirk, Cricket has 3,000 retail stores now, which includes existing Cricket retail outlets, dealer stores and converted Aio stores.

Key to AT&T's revamped Cricket brand is its emphasis on the service using AT&T's network. Cheryl Choy, Cricket's vice president of network, said that the company will keep the CDMA network in place for at least a year, but she's confident former Cricket subscribers will migrate to the GSM network quickly once they see the better coverage it offers.

On the device front, Cricket plans to offer a wide variety of smartphones, starting at around $50. However, the company will also sell high-end smartphones including Apple's iPhone 5c and 5s. AT&T also plans to refurbish the phones that AT&T customers trade in through AT&T's Next handset upgrade program and resell those used phones to Cricket customers, thereby allowing it to offer cheaper phones to Cricket customers. According to Andy Smoak, head of product at Cricket, the refurbished phone model makes it very economical for Cricket customers to purchase "gently" used but state-of-the-art smartphones.

Interestingly, Smoak said Cricket has no plans to offer a tablet at this time and has halted the sale of the ZTE Velox tablet previously sold by Aio. The AT&T prepaid brand sold the device coupled with a $15 per month plan for 250 MB.

Read more about: AT&T
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By Phil Goldstein

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4. T-Mobile CFO: More 'uncarrier' moves planned this year, 600 MHz auction 'very important'

Verizon Wireless (NYSE: VZ) confirmed it is starting to market its LTE network running on its AWS spectrum as an "XLTE" network, providing more capacity to customers.

Click here for a video from Verizon about XLTE.

Verizon has deployed AWS spectrum across more than half of its 500 LTE markets, both large and small, since it started rolling out AWS to augment capacity in major markets such as Chicago, New York City and San Francisco late last year.

Some of the major markets that now feature AWS include Atlanta, Boston, Baltimore, Cincinnati, Cleveland, Dallas, Denver, Detroit, Honolulu, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Minneapolis, Pittsburgh, Salt Lake City, Seattle, and Washington, D.C. Smaller markets include ones like Mobile, Ala,; Stockton, Calif.; Hartford, Conn.; Orlando, Fla.; Peoria, Ill,; Lansing, Mich.; Fargo, N.D.; Erie, Pa.; and San Antonio, Texas. Verizon has said it will deploy AWS spectrum nationwide over the next 14 to 18 months.

"The industry and tech world recognize this is a big deal, and we want consumers to know, too," Verizon Wireless CMO Ken Dixon said. "We continue to offer the very best network, bar none. Now, XLTE provides an even greater advantage to customers by doubling the 4G LTE bandwidth and providing faster peak speeds in cities coast to coast."

Verizon said XLTE delivers faster peak data speeds and a minimum of double the bandwidth to LTE customers in "high-traffic areas in markets nationwide where AWS spectrum has been activated." In these markets Verizon is deploying a full 40 MHz of spectrum, building on top of the 10x10 MHz, or 20 MHz total it used for its 700 MHz deployment, which covers 305 million POPs.

However, Verizon stopped short of promising faster average speeds via XLTE. "Our plan is always to anticipate and stay ahead of demand, and we're doing that with XLTE. Our promise of 5-12 Mbps (and 2-5 Mbps up) hasn't changed," said Verizon spokeswoman Debra Lewis.

The carrier noted that "XLTE-ready" devices automatically access both 700 MHz spectrum and the AWS spectrum in XLTE cities, and that customers whose devices do not have access to AWS benefit by traffic moving off of 700 MHz and onto AWS spectrum. Verizon has said at least 73 percent of its mobile data traffic is running on its LTE network.

Nearly all of the devices Verizon sells, including its newest Droid devices, its Samsung Galaxy S4, S5 and Note 3, and the Apple (NASDAQ: AAPL) iPhone 5c and iPhone 5s, are capable of running on its AWS spectrum. Today, more than 35 percent of all devices operating on Verizon's network can access AWS spectrum.

Verizon purchased roughly 20 MHz of nationwide AWS spectrum from a group of cable companies for $3.9 billion in a deal the FCC approved in 2012.

Other carriers are also augmenting the capacity and performance of their LTE networks. T-Mobile US (NYSE:TMUS) is starting to deploy 4x2 MIMO antenna technology in its LTE network to enhance network performance at the cell edge and generally boost the customer experience.

Sprint (NYSE: S) has branded its tri-band LTE service as Spark; the service takes advantage of Sprint's 2.5 GHz spectrum and radios that have capabilities for 8 Transmitters 8 Receivers (8T8R), which the carrier has said will improve network performance. And AT&T Mobility (NYSE: T) is starting to refarm its 1900 MHz PCS spectrum for LTE services in major market as well.

For more:
- see this Verizon post
- see this Verizon XLTE document (PDF)
- see this Engadget article
- see this Droid-Life article

Read more about: Verizon Wireless
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By Mike Dano

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5. Sprint CFO: We're banking on 2.5 GHz, 8T8R radios for network differentiation

A top T-Mobile US (NYSE:TMUS) executive said that the carrier plans to make more "uncarrier" announcements throughout this year and next year in an effort to shake up the industry and maintain its momentum in the market. T-Mobile CFO Braxton Carter also said the operator sees low-band spectrum as "very important" to its future, and is very interested in the FCC's upcoming 600 MHz incentive auction of TV broadcaster spectrum.

In an appearance at the J.P. Morgan Global Technology, Media and Telecom Conference, Carter was questioned whether T-Mobile has additional "uncarrier" announcements planned. "Absolutely," he responded. "This is all part of a continuum. And it's all additive.

"We have several other very interesting initiatives planned for this year and next year," Carter said. "We have no intention whatsoever of stopping the innovation."

However, Carter sidestepped a question about whether T-Mobile would lower its service pricing in an effort to challenge its larger rivals Verizon Wireless (NYSE: VZ) and AT&T Mobility (NYSE: T). "We do need to have a return" for the carrier's shareholders, Carter said.

T-Mobile has added 6.1 million total customers in the past four quarters since it launched its uncarrier ad campaign, which initially focused on uncoupling the price of a phone from the price of T-Mobile service. The campaign has since expanded to include free data for tablet users, discounted roaming costs and paying customers' Early Termination Fees when they switch to T-Mobile.

Carter also discussed T-Mobile's desire to acquire more low-band spectrum, likely through next year's 600 MHz spectrum auction. "We're very excited about it," Carter said of the auction. He said T-Mobile may participate in this year's AWS-3 auction, but noted that "our priority is low-band [spectrum]."

"What we don't have today is a contiguous nationwide low-band (spectrum). And that's very important," Carter said, explaining that, with mid-band spectrum like 1900 MHz, it takes three towers to cover the same geography as one tower of low-band spectrum like 600 MHz.

"Our priority is really to build out a nationwide footprint" with low-band spectrum, Carter said, adding that T-Mobile's acquisition of Verizon Wireless' 700 MHz A Block spectrum for $2.4 billion earlier this year represents a step in that direction.

Carter also said that T-Mobile supports the current structure of the 600 MHz auction, which would offer licenses in 5x5 MHz blocks. "We can execute our business model very effectively with a 5x5 or 6x6 deployment," Carter said. "We think we could get by with 5x5."

Not surprisingly, Carter was questioned about consolation in the wireless industry. Sprint (NYSE: S) and SoftBank have been rumored to be preparing a bid to merge Sprint with T-Mobile--although they could face significant opposition from regulators. Without discussing any specifics, Carter said that T-Mobile would support additional consolidation in the industry.

"If we had the scale that is equivalent to AT&T and Verizon… we would have much more of an ability to compete on all aspects and all levels with AT&T and Verizon," he said. "The uncarrier model would be substantially enhanced with additional scale."

For more:
- see this T-Mobile release

Read more about: Verizon Wireless, Braxton Carter
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By Phil Goldstein

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