Alltel continues with services until buyer found

US cellular operator Alltel has confirmed that it is continuing to provide services to the 2.2 million customers in 22 states which Verizon Wireless has agreed to divest under the terms of its USD28.1 billion acquisition of Alltel. Alltel says these subscribers will have no change to their services while a buyer for the networks is sought. Verizon leapfrogged AT&T to take the number one spot in the US wireless market when it bought out Alltel; AT&T is hoping to close the gap by acquiring the operations in the markets now being divested. These have been valued at around USD3 billion.

AT&T, BT, Verizon teams up for liaison with Govt, TRAI(India)

Five global telecom service providers providing non-voice long-distance enterprise services like AT&T, BT and Verizon on Monday announced forming an association to espouse their interests in the Indian telecom industry. The body called — Association of Competitive Telecom Operators (ACTO) — has Satya N Gupta from BT Global Services as president, it said in a statement today. ACTO is an association representing non-integrated long-distance telecom carriers to represent and advocate before the Government and regulatory bodies its case on issues related to market opening, emerging technologies and pro-competitive policies and reforms in the Enterprise market segment. “ACTO is an industry body focused on policies that will enhance Enterprise telecommunications in India, has been formed by several leading non-integrated long distance carriers that provide service to the Enterprise market segment. So far the industry was represented by two major associations — COAI for GSM operators and AUSPI for CDMA players. The Enterprise market segment includes the IT-enabled Services, Business Process Outsourcing, and Multinational Company segments that are a cornerstone of India’s growing economy. ACTO’s founder members include AT&T, BT, Cable & Wireless, Orange Business Services and Verizon Business,” it said.

 The formation of ACTO marks a new chapter in the ever evolving telecom sector in India and signifies the importance and promising growth in the Enterprise segment, it said. Gupta said ACTO would strive to advocate open competition in the Indian market to promote sustainable investment in the long-distance telecommunications services sector. India is a key strategic location for many multinational companies, and investment in best practices across the telecommunications service sector is an increasingly critical requirement to support economic growth, Gupta said, adding “we hope this will help to promote the ongoing dynamism of the Indian telecom market”. The forum has been registered under the Societies Registration Act by the Registrar of Societies, Government of NCT of Delhi. The office bearers of ACTO are Naveen Tandon from AT&T Global Network Services India as Vice-President and Rishi Chawla as General Secretary from Cable & Wireless Networks. Priya Mahajan is the treasurer hailing from Verizon Communications India Private Limited and Rajesh Ballal Joint Secretary Orange Business Services India.

IPhone Sales Influence AT&T Revenues

Apple’s iPhone represented a mixed blessing and curse for AT&T as the nation’s largest telecommunications company Wednesday reported higher revenue but lower profits for its fourth quarter. The iPhone, heavily subsidized by AT&T, accounted for 1.9 million activations in the quarter — 40% of them were new AT&T customers. However, the AT&T subsidies cost the telecom some $450 million in profits in the quarter. That isn’t necessarily bad news, though, as AT&T expects to get all that back and more to boot as data-hungry iPhone users continue to sign up for more and more data. This session identifies the issues facing both buyers and sellers as they migrate from traditional hardware to software-based architectures and unified communications.”The iPhone 3G continues to deliver high-value subscribers with significantly higher ARPU (average month revenues per subscriber) and lower churn than AT&T’s postpaid subscriber average,” the company said. Like Verizon Communications (NYSE: VZ), which reported its earnings Tuesday, AT&T’s rosy financial report thumbed its nose at the sinking nationwide economy, based largely on its wireless operations. AT&T also reported an acceleration in its U-verse TV operation, recording a net gain of 264,000 subscribers in the quarter. Wireline IP data revenue also registered an impressive 14.2% growth.

The growth areas more than covered the decline in wireline revenue as customers continued to drop their landlines and move to wireless. Randall Stephenson, AT&T’s chairman and CEO, said he was pleased with the results. “Despite the economic environment, we grew revenues in 2008, and I expect 2009 will be another year of overall revenue growth and solid progress,” he said in a statement. “Looking ahead,” he added, “while we are cautious about the economic environment, AT&T is well positioned with a strong balance sheet and premier operational assets and I am very confident in our ability to execute.” From the beginning of his tenure as head of AT&T, Stephenson has bet heavily on the iPhone, and it appears to be paying off. AT&T’s business plan for the iPhone called for heavy up-front subsidies for the handset to be followed by a gradual increase in subscription and data revenue by iPhone users. While AT&T’s profits took a $450 million hit in the quarter, its wireless data-services revenue surged 51%. AT&T said its wireless data revenue totaled $3.2 billion in the quarter. The jump in data services can’t be entirely attributed to the iPhone, but most of it likely is. AT&T said that its exclusive deal to market the iPhone in the United States “continues to deliver high-value subscribers with ARPU approximately 1.6 times higher and churn rates significantly lower than the company’s overall postpaid subscriber base.” AT&T can also take some comfort in the fact that Verizon Wireless’ once-feared “iPhone killer” — the BlackBerry Storm — has received very mixed reviews by consumers and hasn’t been a robust seller for Verizon. For the quarter, AT&T’s net income dropped to $2.4 billion from the year-earlier quarter figure of $3.14 billion. Revenue was $31.1 billion, which represented a 2.4% gain over the like quarter in 2007.

Verizon quarterly earnings increase by 15%

Verizon Communications Inc. on Tuesday posted a 15% increase in fourth-quarter profit driven by healthy wireless gains, but the company’s traditional local-phone business continued to shrink rapidly. In the final three months of 2008, New York-based Verizon posted net income of $1.24 billion, or 43 cents a share, up from $1.07 billion, or 37 cents a share, in the same period a year earlier. Revenue rose 3.4% to $24.65 billion, with wireless sales jumping 12.3% to account for more than half of the company’s total. Adjusted to exclude onetime costs and benefits, Verizonsaid it would have earned 61 cents a share, compared to 62 cents a year earlier. On that basis, the carrier just missed Wall Street’s forecast. Verizon was expected to earn an adjusted 62 cents a share on revenue of $24.7 billion, according to the consensus of analysts surveyed by FactSet Research. During the holiday-selling season Verizon added fewer wireless customers than traditionally would be the case.

The company’s net gain of 1.2 million subscribers fell well short of the 2.1 million it added in the third quarter. Yet Verizon managed to surpass AT&T Inc. as the No. 1 wireless carrier in the U.S. via its acquisition earlier this month or regional operator Alltel. The deal pushed the company’s total wireless base to more than 80 million customers, compared to AT&T’s 75 million-plus. Both companies have relied on wireless to drive growth over the past decade, especially given the weakness in their traditional local and long-distance phone divisions. Each company has lost millions of local customers in recent years, with many switching to cable and others using their mobile phones exclusively. To a lesser extent, Verizon and AT&T are also banking on growth in their fledgling video business, which they’ve rolled out to combat the threat from cable. Verizon added 303,000 fiber-TV and 282,000 Internet customers on its superfast FiOS network — both quarterly records. In the part of the business that supplies consumers with local phone service, however, the number of primary lines in service sank 12.2% from a year earlier to 20.96 million. 

U.S. Cellular Latest to Adopt Gearworks Location Application

U.S. Cellular is the latest wireless operator to offer its customers location-based applications from Gearworks’ Etrace suite. The software gives business workers location, time-on-job, and travel-time tracking, plus dispatch, mobile reporting and turn-by-turn navigation. “Leveraging the flexibility of our Appmosphere carrier-class mobile application delivery platform, we are able to offer U.S. Cellular a portfolio of location-based mobile business applications designed to meet the specific needs of their network and their customers,” said Gearworks CEO Todd Krautkremer in a press release. Alltel, recently acquired by Verizon Wireless, also has the Etrace catalog, as do AT&T, Sprint Nextel and SouthernLINC. The announcement comes amid increased interest in mobile location-based services (LBS). Location-based technologies are currently being implemented in a variety of consumer- and operator-based applications, including mobile social networking. At the beginning of 2008, Gartner forecast that worldwide subscribers to LBS communications would increase in 2008 by 168%, with projected revenue growth of 169%.

Cable & wireless starts its network in India

The second biggest British phone services firm Cable and Wireless has invested around $30 million to roll out its multi services platform (MSP) in India, as the company seeks to address the lucrative markets of Asia at a time when companies in Europe are taking a hard look at their information technology budgets. The new platform will offer telecom and connectivity solutions to over 150 customers in the country including SBI and Aviva apart from the top software exporters , the company said on Thursday. “Customers are seeking to consolidate from multiple vendors to a single partner who can take ownership,” said Sunanda Das, managing director for the firm’s Indian and South Asian operations. In February last year, Cable and Wireless received approval from the Indian government to offer national and international long distance telephony services in the country.

Top software exporters apart from large banks with hundreds of remote branches are driving the demand for connectivity solutions in India. According to research firm PricewaterhouseCoopers, the Indian market for telecom services will reach almost Rs 24, 060 crore by 2010. Customers such as TCS, Infosys and Wipro, apart from banks including ICICI and SBI plan to spend more on procuring connectivity solutions this year, and would seek to partner with a vendor with a global footprint in order to manage and connect their International operations. Cable and Wireless will compete with established MNC rivals BT and AT&T apart from Indian phone services firms such as Bharti Airtel and Reliance Communications.

“We could be a little late in terms of actually getting a license to offer these services, but we are also the first MNC company to have received the permission for cable landing directly,” added Mr Das. The British phone firm is seeking to diversify into more lucrative Asian markets as part of its long term strategy. “The MSP launch follows a highly successful deployment in the UK and is part of a strategic expansion of this new platform in key global regions,” the company said in a statement on Thursday. Cable and Wireless has established its own International gateways (two in Mumbai and two in Chennai) and has received the Lawful Interception and Monitoring Solution (LIMS) clearances from the authorities.

AT&T to pay $2M fine for violating Dobson merger terms

The U.S. Department of Justice said Wednesday that AT&T would pay it more than $2 million in fines for violating the legal terms of its 2007 acquisition of Dobson Communications. As part of the Dobson deal, the Justice Department required AT&T to divest from three rural markets, including two in Kentucky and one in Oklahoma. The businesses in those markets were to have been operated independently and AT&T was supposed to ensure that customer information would remain confidential. However, antitrust regulators found that AT&T violated the terms of the agreement by giving unauthorized access to AT&T employees to sensitive client information that was used to steal customers away from the divested businesses. In addition, early termination fees were waived for customers so that they could switch to AT&T. The $2.8 billion acquisition was first announced in July 2007. The Department of Justice had cleared the deal in October 2007. Dobson had sold wireless services under its Cellular One brand, which had about 1.7 million customers.

Boost Mobile offering $50 unlimited plan

Boost Mobile is wading into the fight for budget-minded cellular customers as it announced Thursday a $50 unlimited voice and data plan that doesn’t require an annual contract and isn’t tied to a home calling area. The Irvine, Calif.-based subsidiary of Sprint Nextel Corp. said the $50 flat price includes unlimited voice, texting, Web access and press-to-talk services, as well as all taxes and other fees. Main competitors MetroPCS Communications Inc. and Leap Wireless International Inc.’s Cricket brand offer similar plans for between $45 and $50, although taxes and fees are extra. Those plans are also limited to a few hundred cities that fall within the companies’ cellular networks while Boost is piggybacking on Sprint’s nationwide Nextel-branded network. Boost also provides press-to-talk services, which are not available with Leap and cost $5 extra for MetroPCS.

“It’s very competitive on value but, more importantly, it’s not nickel and diming the customer,” said Neil Lindsay, vice president of marketing for Boost Mobile.Boost currently offers a $70 unlimited plan in parts of the South, but it operates on a different network and the company plans to stop marketing it to new customers, Lindsay said.

The company had 3.9 million customers at the end of the third quarter, compared with MetroPCS’ 4.8 million and Leap’s 3.5 million. The three companies compete in the so-called “prepaid” market, where customers buy a phone and pay for service on a month-to-month basis. As opposed to postpaid customers, who sign annual contracts and pay a monthly bill, prepaid services are geared toward younger customers and people who may lack the credit worthiness to get a calling plan with major national carriers such as Sprint, T-Mobile, Verizon Wireless or AT&T Inc.

But Matt Carter, Boost’s president, acknowledged that the unlimited offer could appeal to postpaid subscribers who want to save money and don’t mind the small range of handsets or want premium services such as streaming video or music downloads. “We believe the offer we have in these challenging economic times will make people take a harder look at Boost … and we believe that will open up us to a much broader piece of the population,” Carter said.

David Chamberlain, principal analyst for Scottsdale, Ariz.-based research firm In-Stat, said that while he didn’t expect many postpaid customers to break their annual contracts to sign up with Boost, he said it could prove tempting to new customers. “I think the general decline in the economy is going to have people looking for the opportunity to economize somewhere, somehow,” Chamberlain said. “An all-in plan for $50? You don’t need good credit to get that, so that could be pretty attractive.” He also said the Boost plan may be a “Hail Mary” play by Overland Park, Kan.-based Sprint to attract new customers after losing almost 4 million last year. “My biggest concern would be where are they going to get the capacity (for a large number of new Boost customers) or have they lost so many customers that the capacity is there,” he said.

Sprint spokesman James Fisher said the parent company doesn’t believe Boost will cannibalize customers, instead viewing it as a way to hold onto customers who don’t meet Sprint’s tighter credit requirements for postpaid plans. “We’re really focusing this on two different markets,” he said. “We’re offering excellent value and opportunity for people who are appropriate for postpaid and appropriate for prepaid. In this economic environment, (prepaid) is an important customer base.”