FirstNews - July 23, 2008
AT&T Profits Rise Thanks to Wireless
By Rhonda Wickham
Wireless subscriber growth helped the top U.S. phone company AT&T achieve quarterly profits. Wireless subscriber growth also helped to compensate for its shrinking traditional landline business.
Q2 profit rose to $3.8 billion from $2.9 billion from a year earlier. Quarterly revenue rose 4.7% to $30.9 billion.
Probably most notable was AT&T’s wireless division saw its churn fall to 1.1%, the lowest level in the company’s history. CEO Randall Stephenson pointed to the operator’s relationship with Apple as a way of showing how AT&T had transformed itself.
The company said sales of the iPhone 3G were twice that of results from the first launch in the first 12 days. AT&T added 1.3 million wireless subscribers in Q2, down 123,000 from a year ago. Wireless operating income was $3.1 billion in Q2, up 91% from a year ago, and operating margins were 25.5%, up from 15.4% a year ago.
AT&T said its primary consumer access lines fell 8.7% in the quarter from a year earlier.
Vodafone Announces $2 Billion Share Buyback
By Rhonda Wickham
Vodafone announced a $2 billion buyback program a day after filing a weak financial update. According to a report in Reuters, Vodafone shares slumped almost 14% on Tuesday, wiping nearly $21.9 billion of its market value, after the group said its full-year revenue would be on the low end of its previously stated forecast range.
Shares in the group were 2.5% higher in early trading on Wednesday, in an overall higher market, valuing the company at $161.781 billion.
Analysts for the operator said the medium-term concern for operators is cash generation, suggesting that even telco operators aren’t immune to the sagging economy. Many of the same analysts seemed uncertain that this effort by Vodafone would have much effect.
Vodafone said the buyback would need shareholder approval at its annual general meeting on July 29. It will pay up to 105% of the share's average closing price on the five business days before the buyback.
KDDI’s Profits Fall 12%
By Rhonda Wickham
KDDI Corporation said its net profit for the first quarter that ended June 30 fell 12% from a year earlier. The financial results reportedly were weighed down by capital investment and increased commission fees for handset sales.
The operator had a net profit of $679.1 million for the fiscal first quarter, compared with a profit of $766.8 million a year earlier. KDDI reported revenues of $8 billion in the quarter, up 3.1%.
KDDI is ranked second in terms of the number of subscribers behind NTT DoCoMo with more than 53 million subscribers. KDDI has 30 million subscribers.
By Brad Smith
Two of the leading mobile phone chip manufacturers, Broadcom and Texas Instruments, saw their stock prices decline Tuesday after releasing Q2 financials.
Broadcom reported its Q2 profits nearly quadrupled and that its revenue beat its forecast range, but the chip manufacturer’s stock still fell slightly in after-hours trading. Some analysts had expected Broadcom’s earnings per share to be higher than the 25 cents it reported.
Texas Instruments, which reported Monday, saw a 15% slide in its stock Tuesday because of a decline in Q2 net profit. Broadcom’s stock had been up on Tuesday but fell about 6% after its quarterly report was released.
Broadcom said its profit rose to $134.8 million in the second period, up from $34.3 million in the prior period. Its revenues were $1.2 billion, up from $897.9 million, after the company had forecast in April its Q2 revenues would be up to $1.125 billion.
TI had reported Q2 net income of $588 million, a 4% decline from a year earlier, and also said revenue dropped 2% to $3.35 billion. The company said demand for its products slowed unexpectedly in June because distributors cut their inventory levels. TI also blamed a decline in its wireless business in the second quarter.
In separate news, Broadcom also announced that it is shipping its combination wireless chip, the BCM4325, in volume and that it expects consumer products using it to be in the market by the end of the year. The chip combines Wi-Fi, Bluetooth and an FM radio. The company also said it is working on a second generation of the chip that might include 802.11n, GPS and low-energy Bluetooth.
WRAL Airs First Local Mobile Digital TV Signals
By Rhonda Wickham
This week, digital TV company WRAL and Capitol Broadcasting Company’s (CBC) New Media Group are conducting a field test of mobile digital TV technology in the Raleigh-Durham, N.C. market.
The Triangle field test will demonstrate the new MPH system, which lets local broadcasters deliver digital television to mobile devices such as wireless phones, laptops and personal media players.
Two channels of specially encoded video will be broadcast over WRAL-DT for reception by prototype mobile handheld receivers. The test is intended to demonstrate mobile DTV reception in typical mobile customer environments such as riding in a car and walking in a park.
The MPH system takes advantage of digital TV’s multicast capabilities by using the same signal that brings over-the-air HDTV to viewers’ homes to also deliver mobile TV to handheld or other portable devices.
Helping with the field trials are Harris Corporation, LG Electronics and Zenith. The MPH system is a candidate for the new mobile DTV standard now being finalized by the Advanced Television Systems Committee.
WRAL-TV and CBC are part of the Open Mobile Video Coalition, which is a nationwide group of broadcasters driving the deployment of mobile digital broadcast television. Commercial deployments are expected next year.
Alltel Launches Fan Poll
By Wireless Week Staff
Alltel Wireless is teaming up with Txtstation in an effort to provide unique promotions to fans at select Alltel-sponsored sports properties. As the Official Wireless Partner of FansSM, Alltel will leverage Txtstation’s capabilities and implement a real-time text messaging feature at five sponsored properties. Additional properties may be added to the campaign at a later date.
The text feature, titled the “Alltel Fan Poll” will pose a question to fans inside the stadium and ask them to text their opinions. At each home game, fans will be able to interact with the video board by sending a text message from their wireless phones to 88222. Within seconds, votes will appear live on the screen.
The Alltel Fan Poll will debut later this summer at the beginning of football season.
Ringleader Attracts New VP
By Monica Alleven
Ringleader Digital wants to play a major role in shaping the future of the mobile advertising space, and it hired a new vice president of product management to help it achieve that.
Sonjoy Ganguly joined the company after having been director of product management for DoubleClick’s Rich Media product line. Before that, he was at TheLadders.com, an online job board for professionals.
Mobile advertising is the next generation of things to come – “it’s very much in its infancy and Ringleader is poised to help,” Ganguly said. “What they do well is make it easy for buyers and sellers to connect in this space.”
One of his first directives at Ringleader is to help set the product strategy – not only for the next six months but looking out 12 to 18 months down the line, he said.
Ringleader’s open, third-party advertising model continues to gain attention from major industry players including advertisers, agencies and publishers, according to the company. Recent announcements include deals with major brands like IAC Advertising Solutions and mobile application companies such as HopStop, which provides subway and bus directions in major metro areas.
The company’s abilities to target campaigns by device functionality as well as to provide common reporting that maps through DoubleClick and Atlas ad management systems are just two reasons for Ringleader’s strengthening popularity, the company said.
Update: T-Mobile Subscribers Sue for Unwanted Text Messages
By Rhonda Wickham
Earlier this week, a U.S. District Court judge denied T-Mobile’s motion to dismiss a lawsuit filed by unhappy T-Mobile subscribers. The subscribers allege that the operator charges them for unsolicited text messages.
In the complaint, customers claimed they had no way to disable their phones from receiving text messages, often in the form of spam, and are forced to pay between 10 and 15 cents for every message.
In a statement from the operator, it said, “T-Mobile is committed to providing the best customer experience in wireless and does offer customers the ability to block chargeable text messages, MMS, IM and e-mail from being sent to their handsets at no additional charge. Customers can contact Customer Care or a retail sales representative for assistance and soon will be able to help themselves with tools on www.myt-mobile.com.”
The operator also said it has extensive filters built into the network to help detect and block spam text messages being sent to customers’ handsets, especially those that originate from Internet IP addresses. “These filters are updated on an ongoing basis, including monitoring for newly emerging schemes,” the operator wrote.
The case is scheduled to move ahead after clearly this first procedural motion.
Rendering Engines Compete Aside Mobile Browser War
By Evan Koblentz
Despite leading the open-source mobile browser movement, the WebKit rendering engine faces plenty of competition from commercial browser engines, ABI Research concluded in a new report this week.
WebKit, developed by Apple using Linux tools, sits underneath both the iPhone version of Safari and Nokia’s S60 browser. Those are impressive references, however, “commercial browser vendors such as Opera and Access continue to see growth [while] overall growth in the mobile browser category will lead to a total pre-installed revenue of $492 million by 2013,” ABI said.
All mobile browser vendors must make a choice about which engine to use. Closed-source browser vendors tend to be more accommodating to carriers and handset manufacturers regarding content such as start pages, default search engines and navigation features. Some examples include Microsoft’s Internet Explorer Mobile and Opera’s Mobile/Mini offerings, plus startups such as Skyfire Labs’ Skyfire.
On the open-source side, WebKit is part of Google’s Android as well, and soon the industry will see a mobile version of Mozilla’s Gecko engine.
So even as commercial mobile browser engines find some paying customers, “ABI Research expects the larger trend to place emphasis on closing the gap between the experience of the Web on a mobile phone and that of a PC, while focusing on technologies such as content adaptation that optimize experience for the mobile screen,” the company said.
Study: No National Consensus for Broadband Policy
By Wireless Week Staff
CostQuest Associates, a national telecommunications cost consulting and software firm, released the results of a 50-state survey it conducted in order to better understand the landscape of state policies developed to expand high-speed Internet availability.
The survey shows that although most states have undertaken broadband initiatives, there is neither a single national model nor a consensus on best practices. CostQuest Associates conducted its survey to identify and track efforts in each of the 50 states to achieve broadband ubiquity. The results were unveiled at the summer meetings of the National Association of Regulatory Utility Commissioners (NARUC).
Among the key findings, CostQuest learned that at least 39 of the 50 states have some form of broadband initiative in place, either through legislation or through a more informal effort to increase broadband access. However, only 10 of the 50 states have undertaken a definitive broadband mapping effort.
Only a select few have looked at the cost to deploy broadband in the currently unserved areas so as to provide information to encourage private capital as well as delineating the issue to determine if state assistance is needed in uneconomic areas.
“Deploying broadband in underserved areas can be an expensive undertaking, and everyone is looking for the best information possible, including data on where broadband coverage does and does not exist and what the cost to deploy is,” said Jim Stegeman, president of CostQuest Associates. “By surveying what other states are doing, we are able to give federal policy makers a snapshot of how individual states are approaching broadband deployment with limited resources.”
“Most states are searching for ‘best practices’ and those currently developing broadband initiatives have taken an ‘a la carte’ approach, selecting elements of programs from other states,” said Stegeman. “Many states are still in the planning stages, but there does not seem to be a one-size-fits all approach."
Sprint Optimizes Touch and Mogul by HTC Experience
By Wireless Week Staff
Sprint announced key enhancements, including support for EV-DO Rev. A data speeds, as part of a software upgrade available for the Touch and the Mogul by HTC.
Introduced in October 2007, the Touch combines Windows Mobile 6.1 with advanced multimedia features for accessing business and personal applications. Besides the increased data speeds, the new software enables enhanced GPS capabilities, Opera browser and an on-screen 40-key QWERTY keyboard.
The Mogul, which was introduced June 2007, is a premium Windows Mobile device and was the first EV-DO Rev. A-capable handset. The new Mogul software enables Sprint TV.
TESSCO Posts Record Earnings
By Rhonda Wickham
TESSCO Technologies, provider of product and supply chain solutions, reported record earnings for its first quarter, which ended June 29, 2008. Earnings per share reached a record $0.38.
“We made excellent progress on all fronts, in a difficult economy,” said Chairman, President and CEO Robert Barnhill, in a release. “Revenues in our ‘non-concentrated’ customer base grew 9% year over year. Our gross margin exceeded 25%, a 12% increase compared to the first quarter of last year, driven by improved gross margins in all three commercial markets. Our productivity initiatives led to operating margin improvement, as expenses remained in line while gross profit increased.”
In network infrastructure, the company posted $42.9 million, which was an increase of 7.5% thanks to higher sales of RF propagation and site support products. Revenues for its mobile devices and accessories totaled $58 million, decreasing 8.1% due to a decline in cellular accessory sales to resellers. Revenues for the company’s installation, test and maintenance division were $21.2 million, a 1.2% decrease.
Interop Signs Verisign Distribution Agreement
By Wireless Week Staff
Content from VeriSign’s Messaging and Mobile Media, a division of VeriSign, will be made available to the Interop common short code (CSC) gateway. The gateway extends national short codes, premium short codes, campaign and voting participation and subscription content to the more than 55 operators that Interop serves.
Interop Technologies will offer the aggregated content from VeriSign's Messaging and Mobile Media division. Interop developed this “aggregator of aggregators” approach to simplify the complex wireless content value chain and create benefits for all of the participants from operators to customers. The company’s CSC gateway solution includes technology and management tools such as performance reporting and customer care. The gateway lets operators obtain, provision and manage mobile content in a resource-efficient manner.
“The Interop CSC gateway provides a convenient, single point of connection between VeriSign and dozens of network operators,” said Damian Sazama, vice president of marketing and product development for Interop. “This new model goes up a level to make the value chain more efficient for our operators.”
Lexy Gets Onion Distribution Deal
By Monica Alleven
Here’s a new spin on mobile content, and it doesn’t involve music or a download to the phone. It basically involves making an old-fashioned phone call from a mobile phone.
The application involves audio content distributor Lexy, which recently signed a deal with the satirical news publication and Website, The Onion. The partnership, a first for Lexy, means a Lexy subscription button is integrated into the Onion Radio News Web page. The button provides access to Lexy so that Onion fans can set it up to receive Onion Radio News and Onion Radio News Classics to their mobile phone.
The audio is delivered via a phone call to Lexy – no downloads are required, according to Lexy co-founder Tony Levitan. Lexy is focused on short-form audio content, which it trademarked Quikcasts, and plans to add more media outlets. “Our goal is to deploy that Lexy button as many places as possible,” he said.
One of the big benefits of the Lexy system is it works with any phone. It’s free to the end-user, although it does use airtime. Part of the reason the founders chose this path is they projected carriers would move to flat-rate pricing, and prices are coming down, he said.
Any brand with an RSS feed can be part of Lexy, he said. The key is to make sure a podcast isn’t too long. Lexy can be accessed through a phone call to 415-692-4933.
Levitan was one of the creators of Egreetings Network, along with Lexy co-founder Fred Campbell. They sold Egreetings to American Greetings in 2001.
So far, three primary use cases are emerging for Lexy. One is to use it during commute time while riding mass transit or using a hands-free device in a car. Another is to combat boredom and kill time, and a third is to just take a break from staring at a computer all day or some other repetitive activity.
And the name Lexy? It combines the words lexicon and sexy, so it’s designed to represent the “pragmatic and fun,” according to the company.
News Briefs for July 23, 2008
Companies in the news: Pakistan Mobile Communications Limited, Tekelec, Deutsche Telekom AG, Devicescape, AirTight Networks, Nexage, Sony Ericsson, iPass, Thumbplay, Speck, Intergis L.L.C., Vericom Technologies, NovaTracker L.L.C.
• Pakistan Mobile Communications Limited has deployed Tekelec’s TekMedia anti-spam firewall solution to combat SMS spam attacks on its subscribers. The operator is the largest telecommunication service provider in Pakistan with more than 31 million subscribers.
• Deutsche Telekom AG and Devicescape have integrated their services to enable easier access for users and more types of devices onto T-Mobile HotSpot networks. To make it convenient for Devicescape members to use any of the 10,000+ T- Mobile HotSpot locations across Germany and Europe, Devicescape now sells service subscriptions and vouchers directly on members’ account pages. With many of Deutsche Telekom's 8,000+ T-Mobile HotSpots located in Germany, relevant pages on the Devicescape Website are now available in both English and German to make it easier for German-speaking customers.
• AirTight Networks has introduced its SpectraGuard 802.11n solution for wireless intrusion prevention. The solution consists of the 802.11n MIMO sensor platform, the Planner 5.0 release that includes support for 802.11n infrastructure & WIPS deployment planning and 802.11n WLAN Coverage Estimator (free utility) provided on AirTight’s Website. The SpectraGuard system provides comprehensive security from all 802.11n threats with backward compatibility with existing a/b/g wireless networks. The new sensors are available for both AirTight’s onsite product, SpectraGuard Enterprise and its recently introduced SaaS offering, SpectraGuard Online.
• Nexage is powering a new mobile destination for Vmbc.tv, a mobile video-on-demand distribution network from Versaly Entertainment. Nexage’s PhoneCast platform is a reliable, carrier-grade solution that is easy to use for both media content providers and end users, and powers services for CBS Sports, DivX and others. It supports full social networking capabilities that enable companies to engage in viral marketing and build customer loyalty. It delivers content and services to phones on networks worldwide without the need for client software.
• Sony Ericsson is rolling out iPass Mobile Office to its global remote workforce. Sony Ericsson has offices in Sweden, the U.K., France, Netherlands, India, Japan, China and the United States. iPass Mobile Office unifies mobility management over any Internet connection. It works to optimize mobile access, centrally manage mobile devices and connections, and control the end-user organization’s mobility expenses. Users connect via the iPassConnect mobility manager, enabling a simple and consistent user experience over all Internet connections, multiple access technologies and various laptop and handheld device platforms.
• Mitch Rotter has been promoted to senior vice president of content acquisition and strategy at Thumbplay. Rotter was previously vice president of content acquisition. Recent additions to Thumbplay’s library under Rotter’s direction have included exclusive content from Jay-Z, Coldplay and Michael Jackson; as well as content from the Godfather and Vivendi Games. Rotter joined Thumbplay after serving at Infospace Mobile where he oversaw all of its media distribution agreements as director of content licensing and acquisition.
• Speck has released its PixelSkin cases specifically designed for the iPhone 3G. PixelSkin’s lightweight, form-fit design with slightly thicker corners helps protect your iPhone from bumps and scrapes, while the textured tile pattern provides a comfortable, tactile sensation in your hand and a no-slip grip. The case offers access to all ports, controls and sensors for convenience, while the front raised ridge detail recesses the iPhone screen to protect it while faced down. The PixelSkin will be available in Licorice Black, Marshmallow White, Huckleberry Purple, Sherbet Pink, Corncob Yellow, Blueberry Blue and Spearmint Green. Cases cost $24.95.
• Intergis L.L.C., Vericom Technologies and NovaTracker L.L.C., three mobile resource management (MRM) and the logistics companies, have merged their resources, technologies, services and experience, with backing from Columbus Nova L.L.P., a $2.5 billion asset management firm in New York. Intergis, established in 1997, offers mid-sized firms and large enterprises multi-user software systems that automate routing, scheduling, dispatching, vehicle optimization and many other mobile workforce needs. Vericom Technologies, a 10-year-old firm, provides an integrated set of GPS-enabled, vehicle and handheld tracking solutions as well as reporting capabilities to small and mid-sized businesses. NovaTracker, founded in 2003, develops and markets GPS, wireless tracking and communication devices. The merger is effective immediately and the new company will be named Intergis, operating under the Vericom and Intergis brands. Intergis will have its headquarters in Cranford, N.J. and will maintain offices nationwide. Terms of the merger were not disclosed.