Alltel in Possible Buyout Talks
By Teresa von Fuchs

Alltel's share rose after the Wall Street Journal reported that the company was in possible takeover talks. The stock rose 2.1% yesterday, reaching a 7-year high.

The Journal reported that Blackstone Group, TPG Capital and the Carlyle Group are among the companies meeting with Alltel management. Analysts also speculate that AT&T, Sprint Nextel or Verizon Communications may also be considering the possible acquisition. Because Alltel carries calls for both AT&T and Verizon Wireless in areas where they don't have coverage, each carrier could stand to gain considerably with the acquisition.

AT&T and Verizon both declined to comment on the possible purchase.

T-Mobile USA Reports Customer Gains
By Teresa von Fuchs

T-Mobile USA has reported a net customer gain of 980,000 customers at the end of the first quarter, with more than 75% of new customers as contract customers. The company also reported a reduction in contract churn of 1.9% down from 2.1% in the both the first and fourth quarters of 2006. The company also reported ARPU of $52.

"myFaves is the most successful offering we've had in the history of T-Mobile and it is changing the nature of our business," Robert Dotson, CEO of T-Mobile USA, said in a statement. "In the quarter, we also captured our fifth consecutive J.D. Power and Associates award for Overall Customer Satisfaction. This type of honor underscores the consistent strength of everything from the quality of our calls to the responsiveness of our employees to solving our customers' communication needs. We know this kind of recognition is simply an indicator that we are on the right path."

The total number of SMS and MMS messages increased to almost 16 billion in the first quarter of 2007, compared to almost 13 billion in the fourth quarter of 2006 and 7 billion in the first quarter of 2006. T-Mobile USA reported a net income for the first quarter of 2007 of $315 million, up from $179 million in the fourth quarter of 2006 and $241 million in the first quarter of 2006.

More from the AT&T Personnel Files
By Teresa von Fuchs

According to the San Antonio Business Journal, AT&T has created a new senior executive level position within the corporate headquarters in San Antonio. Jim Callaway, currently the senior executive vice president of business development, has been appointed to the new position of senior executive vice president of executive operations. The Business Journal reported the new position was created to facilitate the CEO transition between Ed Whitacre and Randall Stephenson.

For Callaway, the new position means he is responsible for the transition within the Office of the Chairman, merger integration and re-branding programs, among other responsibilities.

In more title shuffling, AT&T's Vice President of Operations Support Steve Oswald has been appointed vice president of finance for AT&T Services Inc., where he will support the entertainment services group. And Susan Johnson is now the senior vice president of business development for AT&T Operations.

Clearwire Posts Q1 Loss, Doesn't Lose Hope
By Teresa von Fuchs

Clearwire reported a first-quarter loss of $92.6 million, or 64 cents per share. A year earlier, the company lost $55.3 million, or 73 cents a share. But Clearwire executives tried to ease investors' fears; reporting that total revenues rose to $29.3 million from $23 million in 2006; it added about 52,000 subscribers during the first quarter, bringing the total to 258,000; and it reported low customer churn rates of about 1.6%.

Clearwire, which went public in March of this year, estimates that it will need $1.6 billion more than the $1.5 billion it currently has available. But according to The Seattle Times, John Butler, Clearwire's chief financial officer, said the company can scale back on building to meet any amount of funds the company can raise. He also warned that shareholders should expect some losses as the company continues to invest in equipment.

In its first-quarter earnings release, Clearwire said it expects to have up to 400,000 subscribers at the end of 2007.

DT Earnings Drop, Workers Vote on Possible Strike
By Teresa von Fuchs

Deutsche Telekom reported a 5.8% drop in first-quarter earnings, which it attributed to a steep decline in its domestic fixed-line networks. The Bonn-based carrier said that while it has added 572,000 customers in broadband lines, it has lost 588,000 customers in its fixed-line unit T-Com. Adjusted core profit at the fixed-line unit dropped 17.9% in the first quarter in Germany.

Deutsche Telekom is also in the middle of a possible strike battle with trade union Verdi, over its plans to cut costs by moving 50,000 staff to new units that would entail longer working hours and less pay. Verdi is expected to announce later today the outcome of a strike ballot.

USB Modems: A Market to Watch
By Wireless Week Staff

According to a new study from ABI Research, shipments of USB modems are expected to exceed 22 million by 2012.

Principal analyst Dan Shey said in a statement, "Proliferation of 3G networks is the primary driver of growth of cellular modems regardless of form factor. However, new companies are jumping into the USB modem market because the installed base of devices for USB modems includes not only laptops but also desktops. Desktop PCs are ubiquitous around the world and will continue shipping in large volumes, exceeding 140 million units per year through 2011."

The research consultancy predicts that cellular modems, in all form factors - PC cards and ExpressCards, USB modems, internal modems and 3G/Wi-Fi routers - will grow to over 68 million units by 2012, representing a compound annual growth rate of 53%.

However, Shay expects that different market forces besides form factors will affect the USB modem market. He says, "There are two factors to watch which will affect the USB modem market. First, the newer companies entering this market are in the Asia-Pacific region, a territory with notoriously price-competitive companies. Second, since the USB modem attaches externally to the computer, the device has no space or shape limitations. This fact will allow modem vendors to differentiate their products based on body design and functional features, providing for interesting marketing opportunities."

Report: Majority of "Tweens" Own Phones
By Teresa von Fuchs

According to a recent study by research company iGR, a majority of 12- to 14-year-olds have their own wireless phones and a significant percentage of children under 10 also have their own phones.

iGR surveyed "tween" and teen parents and more than 1,000 children ages 5 to 17 and found that between 50% and 70% of children ages 12 to 14 have their own cell phones, with even higher penetration among older teens. The market strategy consultancy said that the new "battleground" for carriers and phone manufacturers is the under-10 market.

"This study shows that although there are still significant opportunities with the "tween" and teen segments, the target age groups are getting younger and younger," Ian Gillott, president of iGR, said in a statement. "And while the children might have opinions about what they want and how they will use a cell phone, their parents still make the purchase decision and - more importantly - pay for the service and device."

News briefs for May 10, 2007
Companies in today's briefs: AT&T, Nokia, Live Nation, PlayPhone, CellAntenna

• AT&T today announced a new contract with Aeroflex, a global technology company that develops a diverse range of microelectronic T&M products, to serve as the primary networking-services provider for Aeroflex. Under the terms of the 3-year contract, AT&T will provide a VPN, Remote Access, VoIP, hosting and security services. Aeroflex selected AT&T to create a customized globally managed VPN incorporating ANIRA, a remote access VPN to core data services.

• Nokia and Live Nation announced the North American launch of Nokia Ticket Rush, a free membership program providing access to tickets for concerts, tours and live entertainment events. The program delivers promotions for these shows directly onto millions of mobile handsets. Users of the service are also privy to pre-sale tickets; special lots of tickets are made available only to service subscribers. The service is free.

• PlayPhone, a provider of off-deck entertainment offerings, said it raised $18.7 million in a third round of venture capital funding. The financing was led by Scale Venture Partners and included participation from existing investors Cardinal Venture Partners and Menlo Ventures. The company said it will use the funds to expand into new international markets.

• CellAntenna announced the roll-out of a new emergency communication system: MOFORSAS. This Multiple Output Fiber Optic Repeater Smart Antenna System promises to provide clear, reliable communication to disaster recovery teams in extreme, hostile conditions, such as building collapses, mining accidents, hurricanes and similarly harsh situations. The system was designed to bring radio communication signals from outside a building and carry them into deep interior locations where no signal exists.