An Ignoble Experiment

2. T-Mobile scores more 700 MHz A-Block spectrum from CenturyLink unit

Verizon Wireless (NYSE: VZ) intends to launch Voice over LTE service in the fourth quarter of this year, and the carrier plans to use the technology to introduce new, high-definition telepresence services, according to Verizon Communications CFO Fran Shammo.

However, Shammo significantly pushed out the timetable for when Verizon will launch phones that are LTE-only, without support for CDMA voice technology. Speaking at the Oppenheimer Technology, Internet & Communications Conference, the Verizon executive said that Verizon will deploy phones without CDMA chipsets in the first half of 2016. Previously, Shammo indicated Verizon would launch its first phone like that by the end of 2014.

It's not clear what the cause of the delay is, but it could relate to Verizon's oft-stated concern that its VoLTE service needs to be just as reliable as its CDMA voice network. By removing CDMA chipsets Verizon could lower the cost of its phones. Verizon's voice traffic currently travels over its CDMA network, but the carrier is moving that voice traffic to its LTE network with VoLTE.

Verizon executives reiterated this spring that the carrier plans to launch VoLTE sometime this year on a nationwide basis. The carrier said that when it launches the service, it will offer a "robust line" of VoLTE-capable smartphones and video calling services.

As for Verizon's competitors, T-Mobile US (NYSE:TMUS) recently said it now has 200 million POPs covered with Voice over LTE technology on it network, though it doesn't sell many VoLTE-capable phones. AT&T Mobility (NYSE: T) has launched VoLTE in some markets in the Midwest. Sprint (NYSE: S) for its part has not yet given a timetable for when it will launch VoLTE, though there are rumors it may do so in the first half of 2015.

Shammo said VoLTE "doesn't create a lot of incremental benefit" but that it does open up "many new doors for many technologies to launch on that platform." He said those include HD telepresence services including "really quality telemedicine" other services. Shammo also noted that VoLTE will enable HD video calling that can run across different devices and smartphone platforms.

"For us, when we launch a new technology, we have to make sure our quality is strong because the CDMA network was so strong," Shammo said. "We don't go before we know it's ready."

In terms of other network-related issues, Shammo noted Verizon has deployed its AWS spectrum to augment capacity on its LTE network in most of the major cities across the country, and he said the carrier will be done with its AWS overlay by the end of the year. He said that 55 percent of Verizon's customer base uses LTE devices, but that LTE traffic now accounts for 79 percent of the company's total wireless data traffic.

In terms of Verizon's adoption of LTE Multicast technology, the company's term for LTE Broadcast technology, Shammo said that the deployment of that is still "about a year out." He said the carrier will start to embed chips into its phones that can support the technology in the fourth quarter of this year but that it will take time to seed the device base with Multicast-capable phones.

Based upon evolved Multimedia Broadcast Multicast Service (eMBMS) and available commercially beginning with 3GPP Release 9, LTE Broadcast replaces clunky unicast content delivery with a single-frequency network broadcast mode that can send the same content to mass audiences within a specific area. Shammo said LTE Multicast is a "pivotal" technology "that starts to change the way content is delivered over a mobile handset."

Shammo also noted Verizon still has 42 million subscribers on 3G smartphones or feature phones that it can convert to LTE devices over time, which likely would mean more revenue for the carrier. He said Verizon is always trying to stay 18-24 months ahead of where the carrier thinks data demand will be. To that end, he said he does not expect Verizon to lower its capital expenditures for its wireless network, and that this year and into the future Verizon will focus on deploying small cells, Distributed Antenna Systems and other in-building coverage enhancements to improve its LTE network.

Interestingly, Shammo said Verizon could start refarming "slivers" of its 1900 MHz PCS spectrum, which it uses for CDMA service, over the next two to three years as it needs more capacity. He also said Verizon plans to take part in the FCC's AWS-3 auction scheduled to start in November.

For more:
- see this webcast
- see this CNET article

Read more about: Verizon Wireless, LTE
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By Phil Goldstein

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3. Report: Apple talking to major hospitals to integrate HealthKit software

The details of T-Mobile US' (NYSE:TMUS) $50 million expansion into 700 MHz spectrum continue to become clearer as FCC documents revealed the carrier purchased 700 MHz A Block licenses from Actel, a wholly-owned subsidiary of wireline telco CenturyLink.

T-Mobile revealed the deal in a filing with the FCC in which it asked to gain control of the spectrum licenses. The companies did not reveal financial terms of the deal.

According to the filing, the 13 spectrum licenses T-Mobile wants to buy from Actel include markets in parts of Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Michigan, Missouri, Montana, New Mexico and Oklahoma. Most of the markets covered are small cites, with Little Rock, Ark., being perhaps the largest. T-Mobile spokeswoman Stephenie Hanschka confirmed to FierceWireless that the deal covers 6.5 million POPs.

As it did in a recent filing to acquire 700 MHz A Block spectrum from I-700 A Block LLC for licenses in the Evansville-Henderson area in Indiana and Kentucky and the Paducah area in Kentucky, T-Mobile said the deal will yield clear public interest benefits" by allowing T-Mobile to expand its 700 MHz footprint "and thus offer improved services to its customers."

Further, T-Mobile noted that there "will be no loss of an existing service provider in any of the market areas subject to the transaction at issue" and that Actel is not using the spectrum "to provide service to end-user customers."

T-Mobile paid a total of $50.5 million for its recent A-Block purchases. The I-700 deal covered 1.1 million POPs, according to Hanschka. "We have recently entered into agreements to acquire A-Block spectrum in additional markets for multiple parties covering 8.7 million POPs for approximately $50.5 million," T-Mobile CEO John Legere said last week during the company's second-quarter earnings conference call, according to a Seeking Alpha transcript. "That translates into an average MHz-per-POP price of approximately $0.48 compared to $1.85 per MHz-POP price we pay in the Verizon A-Block transaction."

Between its two deals with Actel and I-700, T-Mobile is buying spectrum covering 7.6 million POPs, leaving just 900,000 POPs remaining to be covered in any other deals that may soon come to light.

The general value of 700 MHz A Block spectrum scored a boost last year when AT&T Mobility (NYSE: T) said it would support 700 MHz interoperability by adding A Block, Band 12-capable devices to its portfolio. The move essentially will help lower the cost of A Block devices by broadening the number of carriers using the band.

In April, T-Mobile completed its $2.4 billion deal to buy Verizon Wireless' (NYSE: VZ) MHz A Block spectrum but has been on the hunt for more. T-Mobile said last week it will start rolling out is 700 MHz A Block spectrum it acquired from Verizon beginning in the third quarter. The spectrum covers 158 million POPs, including nine of the top 10 and 21 of top 30 metro areas. The company said its first 700 MHz sites are on air and its first handsets are being tested and should be in the market in the fourth quarter. T-Mobile said it has already cleared encumbered A-Block metro areas in five markets covering more than 13 million POPs on top of many markets already free and clear. The A-Block spectrum T-Mobile got from Verizon covers the markets of Atlanta, Dallas, Detroit, Houston, Los Angeles, New York City, Philadelphia and Washington, D.C.

For more:
- see this FCC filing
- see this TMoNews article

Related Articles:
T-Mobile's hunt for 700 MHz A-Block spectrum yields deal with I-700
T-Mobile's Legere: We don't need to make a deal to be successful
Report: T-Mobile looking to scoop up 700 MHz A Block spectrum from smaller carriers
Verizon Wireless consumes Golden State Cellular and Mobi PCS
Cincinnati Bell quits wireless business, will sell spectrum to Verizon for $210M
AT&T to buy 700 MHz, AWS spectrum from NTCH, MilkyWay Broadband and Paul Bunyan

Read more about: wireless spectrum
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By Phil Goldstein

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4. Falcone fights to keep control of LightSquared as bankruptcy maneuvering drags on

Apple (NASDAQ: AAPL) has been speaking with leading hospitals like Mount Sinai, the Cleveland Clinic and Johns Hopkins on how to integrate its HealthKit mobile health software platform with their systems, according to a Reuters report.

The report, which cited unnamed sources, said the iPhone maker is also in discussions with Allscripts, a competitor to electronic health records provider and Apple partner Epic Systems. The discussions might not lead to anything, the report, said, but they underscore Apple's ambitions to make HealthKit a central hub for collecting consumers' fitness and health data.

Apple unveiled HealthKit in June as part of its iOS 8 software platform, which is expected to come preloaded on the next iPhone coming out this fall. Health monitoring is also likely going to be central to Apple's rumored wearable device, dubbed the iWatch, which is also expected to be released this fall.

The HealthKit software is designed to allow applications to contribute to a composite profile of a person's health data. For example, Apple said users can allow data from their blood pressure app to be automatically shared with their doctor or allow a nutrition app to tell fitness apps how many calories a user has consumed each day.

Part of Apple's ambition is to allow doctors to see all of this data--with patients' consent--so they can devise better diagnoses and treatments.

Other tech companies are also trying to grab a piece of the mobile healthcare market. Last week Google (NASDAQ: GOOG) allowed developers to start tinkering with its Google Fit SDK. Samsung Electronics also recently unveiled a new hardware reference design called Simband that tracks health data like heart rate and blood pressure.

Apple has previously disclosed HealthKit partnerships with Nike, Epic and the Mayo Clinic, which boasts a suite of mobile apps. Epic provides technology at hospitals serving more than 100 million Americans. Apple noted in June that the partnership could let it work with more than 20 other hospitals, including the Cleveland Clinic, Mount Sinai, UCLA Health and the Children's Hospital of Philadelphia.

Apple declined to comment, the report said. According to Reuters, dozens of health systems that use Epic's software will be able to integrate health and fitness data from HealthKit into Epic's personal health record, called MyChart. However, HealthKit might not be able to integrate with older IT systems at hospitals and Apple faces a web of regulatory challenges as it seeks to get further enmeshed in the mobile healthcare market.

"Apple is going into this space with a data play," Forrester Research healthcare analyst Skip Snow told Reuters. "They want to be a hub of health data."

Meanwhile, in other Apple rumors, Bloomberg reported that according to unnamed sources familiar with the matter, Apple's suppliers have started making new iPads. Apple is hoping to revive iPad tablet sales, which have slumped in the past two quarters.

The report said that mass production of a new full-sized iPad with a 9.7-inch screen is already underway, and a new version of the 7.9-inch iPad mini is also entering production. Both devices are expected to be available by the end of the year. Interestingly, the report said output of the larger iPad may be hampered by manufacturing issues related to the use of a new anti-reflection coating, which Apple wants to add to make the display easier to read.

Apple is rumored to be planning a media event for Sept. 9 to announce new products.

For more:
- see this Reuters article
- see this CNET article
- see this Bloomberg article
- see this The Verge article

Related Articles:
Apple ships 35.2M iPhones, slightly below expectations
Report: Apple planning for 70-80M units of larger iPhone 6
Report: Apple's iWatch expected in Q4 with a focus on health monitoring
Rumor Mill: Apple's iWatch to debut in October as health-monitoring device
Apple moves into mobile healthcare with HealthKit software

Read more about: Apple, rumors
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By Phil Goldstein

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5. T-Mobile launching new pay-as-you-go prepaid pricing, with $0.10 for calls and texts

The fight for control of bankrupt wireless firm LightSquared continues to drag on, with Philip Falcone's Harbinger Capital Partners hedge fund submitting a new reorganization plan days after it seemed Falcone would be cut out of the company in a competing restructuring plan.

Meanwhile, Bloomberg noted that Mast Capital Management has said it may put forward its own reorganization plan for LightSquared, which would split up LightSquared and separately reorganize debt at the "LightSquared Inc." and "LightSquared LP" divisions, which have different creditors and own different rights to wireless spectrum.

According to Bloomberg, U.S. Bankruptcy Judge Shelley Chapman said in court on Monday that she would consider a date around Oct. 20 to weigh arguments over how to reorganize the LightSquared. The judge acknowledged she may have to "pick between or among two or three confirmable plans."

Harbinger's plan would rely on $460 million in financing to fund operations in bankruptcy, $360 million of which would be converted into exit financing.

As the New York Post notes, LightSquared Inc. owns just 5 MHz of spectrum, as well as the rights to the tax losses in LightSquared, which could be valued at more than $2 billion. The LP unit controls LightSquared's larger swath of imperiled L-Band spectrum.

Falcone was offered to be a part of the larger LightSquared LP restructuring if he dropped lawsuits against the U.S. government and Dish Network (NASDAQ: DISH) Chairman Charlie Ergen, the Post reported. However, Falcone refused. Falcone has sued Ergen, accusing him of acquiring LightSquared's debt illegally and in secret to try and hijack the company's reorganization.

Bloomberg reported that a special committee of LightSquared's board said it expected junior stakeholders, including Harbinger, to object to its own reorganization plan, which would keep the two branches of LightSquared together.

"LightSquared and the special committee have given the junior stakeholders every possible opportunity to gain consensus and finance their own recovery. It simply has not happened," lawyers for the special committee wrote in a court filing.

Last week LightSquared filed a new reorganization plan in which Ergen, LightSquared's largest secured lender, would receive debt and nonvoting shares because of his $900 million debt claim, if he votes to accept the proposal. Meanwhile, according to the Wall Street Journal, a group of investors holding LightSquared's bank debt would get the company's voting shares, although others could buy that equity from them at an auction. The LightSquared plan would cut Harbinger out of the reorganization.

For more:
- see this Bloomberg article
- see this Leveraged Loan article
- see this NY Post article
- see this WSJ article (sub. req.)
- see this Bloomberg article

Related Articles:
LightSquared settles debt dispute with Dish's Ergen
Dish, Ergen sued over LightSquared … again
LightSquared strikes new $3B restructuring deal, but Dish's Ergen looms as a stumbling block
Analyst: Harbinger's hiring of law firm could indicate plan to sue FCC over LightSquared
Judge tosses out LightSquared's latest bankruptcy plan

Read more about: bankruptcy, DISH Network
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By Phil Goldstein

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