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FirstNews - May 07, 2008

Wed, 05/07/2008 - 8:08am

Sprint, Clearwire Make it Official

By Evan Koblentz

The long-rumored national mobile WiMAX partnership between Sprint and Clearwire is finally official, both companies said today.

Sprint will own 51% of the new company, which will be called Clearwire. Google, Intel, Comcast, Time Warner Cable and Bright House Networks combined are investing $3.2 billion, based on a $20 estimated per-share price when Clearwire opens on the NASDAQ after the deal’s expected completion later this year.

“We’ve made an excellent start developing XOHM WiMAX services. Contributing those advances to a strongly backed new company – in which we’ll hold the largest interest – provides Sprint with additional financial flexibility and allows Sprint management to leverage and focus on our core business,” said Dan Hesse, Sprint’s president and CEO, in a statement this morning.

“Additionally, the agreements allowing the new company and our cable company investors to bundle and resell Sprint’s 3G wireless services strengthen the distribution of our current services while reducing the complexity and enhancing Sprint’s cable relationships,” he said.

The deal is a once-in-a-lifetime opportunity, according to Clearwire CEO Benjamin Wolff.  “Given the complexity of this transaction, we have taken the time and effort to do it right, by thoughtfully leveraging the resources and opportunities that we and our investors are bringing to the table,” he said.

Clearwire plans to reach between 120 and 140 million people in the United States by the end of 2010, officials said today.  The company will use Sprint’s towers, fiber network and IT support.  Other developments from the collaboration include:

  • Comcast, Time Warner Cable, Bright House Networks and Clearwire will become wholesale resellers of Sprint’s 3G wireless voice and data services.
  • Clearwire will support Google’s Android mobile operating system in future consumer devices.
  • Google will develop Web services, advertising and applications for mobile WiMAX devices, and also will be Clearwire’s official search partner for future applications,
  • Google will be the official search partner for Sprint’s mobile services.
  • Google will put software such as Google Maps, Gmail and YouTube on select Sprint mobile phones.
  • Intel will work with component suppliers to embed WiMAX chips into the Centrino 2-based devices such as laptops and other Internet appliances.
  • Sprint, Comcast, Time Warner Cable and Bright House Networks will be wholesale network providers for Clearwire.

Godfrey Chua, an analyst with IDC, said the $3.2 billion in third-party investments combined with Sprint’s and Clearwire’s existing resources is enough to last the new Clearwire through its network rollout and testing stages. Long-term effects of multiple large companies working together could cause some ego conflicts, especially with Google as that company does not have a telecommunications background.  Intel, he added, has the most to gain and will be happy as long as it’s selling more chips.

Wolff becomes CEO of the new Clearwire, with Sprint’s Chief Technology Officer Barry West serving as president.  The company will be based in Kirkland, Wash., where the existing Clearwire headquarters is located. R&D will be based in Herndon, Va., where Sprint’s Nextel division is based.

 

Icahn Bumps Stake in Motorola to 7.6%

By Rhonda Wickham

Billionaire investor Carl Icahn has increased his stake in Motorola by 1.2%, to 7.6%, according to Reuters report yesterday.

The activist investor settled a year-long proxy battle against Motorola in April, when the handset maker agreed to support two of four board nominees proposed by Icahn.

At the time, Motorola said that it would seek counsel from Icahn regarding its decision to split off its cell phone business and its search for a new head of the division.

According to the filing with the U.S. Securities and Exchange Commission, Icahn and affiliates purchased 172.2 million Motorola shares for $2.36 billion, including commissions.

Earlier this week, shareholders used Motorola's annual meeting to blast the company's board and management, questioning leadership and whether it should proceed with creating a separate division.

 

Study: ARM Will Beat Intel in MID Market

By Rhonda Wickham

Although sales of Mobile Internet Devices (MIDs) will exceed $17 billion annually by 2014, Intel-based products will only take a minority share, according to a new report from Strategy Analytics.

In the report, “MID: Heavyweights Do Battle For $17 Billion Prize,” MIDs represent the latest effort from computing, mobile and consumer electronics companies to create a market for handheld gadgets that support the complete range of Internet applications familiar to PC users.

This report predicts that global sales in 2008 will reach 1 million units, and will continue to grow at an average annual rate of 102% to reach 69 million units by 2014.

According to Peter King, director of Strategy Analytics Connected Home Devices, until Intel’s system-on-a-chip arrives in 2009, ARM-based vendors will have a window of opportunity to extend their market leadership.

Strategy Analytics expects most MIDs will feature multiple wireless radios, including Bluetooth, Wi-Fi and cellular 3G. For more information on the ARM vs. Intel race, read Technology Editor Brad Smith’s cover story “Smartphones vs. Mobile Internet Devices” in the May 2008 issue.

 

BelAir, Citymesh Partner for Network Deployments

By Rhonda Wickham

Citymesh nv, a 2-year-old Belgium wireless solutions provider, will use BelAir Networks wireless mesh network solutions for its broadband network deployment. Citymesh’s main business is building large-scale wireless broadband networks, including municipal, hospitality and industrial deployments.

Citymesh will use BelAir Networks wireless mesh networks to support high-speed Internet access, VoIP, video and data services including Real Time Location Services (RTLS) and telemetry applications.

BelAir Networks equipment is designed to handle extreme temperatures, weather and movement, making the product portfolio ideal for even the most challenging environments including off-shore deployments.

BelAir Networks currently has more than 450 deployments worldwide, including cities such as Minneapolis, London and Toronto.

 

Syniverse Posts Strong Q1 Results

By Rhonda Wickham

Tampa, Fla.-based Syniverse had plenty to brag when reporting its Q1 2008 results. The provider of technology and business solutions reported a 37.1% increase in total revenues and 38.5% increase in net revenues. Total Q1 revenues were $115.6 million. 

According to President and CEO Tony Holcombe, the continued strength of messaging and mobile data was a major contributor to the company’s results. Also the acquisition and ongoing integration of BSG Wireless has provided the company a boost in global reach.

Syniverse acquired BSG Wireless last year for $290 million. The acquisition allows Syniverse to enhance its product suite with BSG’s GSM data clearing expertise as well as more global contacts.

 

France Telecom in Talks with Apple

By Wireless Week Staff

According to a report in the Washington Post, France Telecom, owner of the Orange network, is in talks with Apple to sell the iPhone in other countries. CFO Gervais Pellissier said that France Telecom is satisfied with the success of its deal with Apple, shooting down rumors of dissatisfaction with sales.

Orange reportedly has sold nearly 100,000 iPhones.

 

Study: MVNOs Could Drive Mobile VoIP

By Wireless Week Staff

A survey of MVNOs carried out by iLocus reveals that nearly one-fourth of MVNOs are already testing mobile VoIP. By 2010, more than two-thirds expect to have a mobile VoIP offering in place.

According to the report, MVNOs could drive the first phase of mobile VoIP apart from the independent startups. The eligible providers are MVNOs, MNOs, ISPs and WiMAX operators. As far as WiMAX operators are concerned, they have to offer VoIP to differentiate themselves from other broadband providers.

Among the issues touched upon by the survey, the network architecture supporting mobile VoIP is of prime importance to MVNOs. The choice is clearly bridged mobile VoIP option that does not necessarily require a data plan. Nearly half (48%) of the MVNOs prefer this option. Mobile VoIP over data connections can imply free calls if the communication is client-to-client. Most MVNOs seem to resist the idea.

The report forecasts the number of paying mobile VoIP subscribers served by MVNOs to reach about 1.6 million by the end of 2008.

 

News Briefs for May 07, 2008

Companies in today's briefs include: Synchronoss Technologies, picoChip, ipsh

• The board of directors for Synchronoss Technologies, provider of on-demand transaction management software, authorized a stock repurchase program under which the company may repurchase up to $25 million of its outstanding common stock. Synchronoss plans to make such purchases at prevailing prices over the next 12 months, subject to applicable rules and regulations of the Securities and Exchange Commission.

picoChip appointed Jackie Barker to the new post of vice president of operations.  Previously, Barker worked at Hewlett Packard, during which she participated in a move to lean manufacturing, and managed ASIC procurement strategy.

• Craig Turner has been named senior vice president for client service at ipsh, the wireless marketing and mobile media agency of Omnicom’s The Marketing Arm.

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