FirstNews - January 14, 2009
Nortel Declares Bankruptcy
By Evan Koblentz
Nortel filed for Chapter 11 bankruptcy today, after its loss in the third quarter ballooned to $3.41 billion and 1,300 people had to be let go.
Today’s filings occurred in Canada, Europe and the United States. “I firmly believe these are the right steps toward a solution for our company. This process will enable Nortel to become the highly focused and financially sound communications leader it should be,” CEO and President Mike Zafirovski wrote on the company’s Website.
“Most importantly, Nortel is still very much in business and our commitment to customers remains unwavering. We will continue to invest in leading edge R&D,” he wrote. “I can assure you we explored every possible alternative, sought a variety of solutions and engaged in extensive consultation with our Board of Directors and many other experts.”
Nortel’s previous turnaround attempt, which began late in 2005, was unsuccessful because of the worsening global economy, the company stated.
The former Northern Telecom was not always in such bad shape. The company was considered a major player in areas such as VoIP, especially during the dot-com boom of the late 1990s, even while facing wireless hurdles.
New steps for Nortel may include selling various business units or receiving a capital investment as a way to go private, UBS analyst Maynard Um wrote today.
Specifically, “We believe an acquisition by Huawei would be negative for the European vendors as it would gain significant market access in North America and might also open the door for Verizon’s LTE vendor selection. However, this could lead to market repair in the fragmented optics market… But large M&A in the telco equipment industry have rarely led to margin improvement in the past,” he wrote.
Nor is an acquisition by Ericsson a good fit, Um added. UBS today rates Alcatel-Lucent as neutral and Ericsson as a “sell” opportunity.
MetroPCS Seeks $300M from Senior Notes
By Wireless Week Staff
MetroPCS intends to raise $300 million by selling senior notes at a 9.25% rate, the carrier said today. The private offering is for institutional investors and is due in 2014.
Funds would be used “for general corporate purposes, which could include working capital, capital expenditures, future liquidity needs, additional opportunistic spectrum acquisitions, corporate development opportunities and future technology initiatives,” the company stated.
MetroPCS did not announce any cost-cutting moves. Officials recently said the company has 5.4 million customers and that if the economy gets worse, then it may gain customers who choose to cancel landlines or existing post-paid contracts.
There is also speculation that MetroPCS will eventually merge with Leap Wireless despite an unsuccessful bid in 2007. That would help the similar companies save money and would create a more direct competitor to prepaid leader Tracfone, industry analysts have said.
Chips are Down for Base Stations, Up for Bluetooth
By Evan Koblentz
Base stations and their microchips aren’t the market they used to be, so tough times are ahead for such vendors, In-Stat said in its latest wireless industry research today.
“Base station semiconductor revenue will decline an average of 12.3% per year from 2008 to 2012,” the research firm said. Some markets are nearing saturation while most major carriers are already done upgrading networks for 3G connections. There’s also a focus on making existing base stations more efficient by using new kinds of remotely adjustable antennas.
“The global recession will also have an impact. Although most people aren’t likely to part with their cell phones, they may replace them less often, and reduce services they don’t find value in or can’t afford,” analyst Allen Nogee added.
Revenue from W-CDMA may still grow, although base station chips overall are a declining market, he found.
Conversely, IMS Research says the Bluetooth chip market is on the rise. Average selling prices will fall 40% through 2013 as volumes increase for low-end phones, analyst Chris Shreck said yesterday.
That’s good news for major companies like Broadcom and CSR, as long-term sales of upcoming high-speed Bluetooth chips will make up the difference. But it may be more work for smaller challengers to keep up, he said.
Bluetooth as a mobile phone feature today is “surprisingly not ubiquitous, but it’s certainly headed in that direction,” he noted.
SanDisk Debuts Restricted Data Card Technology
By Evan Koblentz
SanDisk today announced a flash memory card that can be restricted to work only on certain handsets.
“Network operators can now freely distribute preloaded and downloaded content on removable memory cards, while restricting the accessibility of such premium content to only their network subscribers. This valuable content protection service is made possible by enabling memory cards to authenticate user credentials via data on the SIM card,” the company said.
The card itself is remotely manageable by the user’s wireless carriers using industry-standard methods from the Open Mobile Alliance. Carrier partners may be announced next month at the Mobile World Congress event in Barcelona or soon after that, with the cards reaching availability by this summer, SanDisk spokesman Mike Wong said.
There may be other uses by content companies or handset vendors, but initially the sales focus is only on network operators, Wong added. He acknowledged there could be some end-user backlash about premium content being locked-in, but that such functionality is what carriers want.
kgb Strikes U.S. Market
By Monica Alleven
One of the questions consumers might have for kgb is: What does it stand for? In this case, it’s not the former Soviet intelligence agency, but the Knowledge Generation Bureau. This kgb wants to help people find answers to questions 24/7, whether it be via mobile phone, text or Web.
By releasing a suite of services designed to help people find information, the company is broadening beyond the directory assistance (DA) services for which it has been known in the United States. Formerly Infonxx, kgb bills itself as the world’s largest provider of branded DA services in Europe and largest independent provider of outsourced DA services in the United States.
Similar to some other Q&A services like ChaCha, kgb uses home-based human agents to answer questions; it also operates a knowledge database for reference when a question already has been answered at a prior time.
Kgb established a brand in Europe using the 118 118 short code and wants to do the same here with the 542 542 code, which corresponds to kgbkgb on the keypad, according to Bruce Stewart, CEO of Mobile and Digital at kgb. People want a variety of ways to ask questions and get answers, so the company is delivering its multi-pronged strategy, he said.
kgb also is launching mobile Web applications for smartphones and the iPhone, a WAP site, plus an Alpha kgb Web service this year to further expand the suite of information services it will offer in North America.
While user interfaces are improving, the reality is only a fraction of people pay for browsing on their cell phones and it’s still tough to find information on the phone, Stewart said. Kgb essentially seeks to make every phone a smartphone even if it doesn’t have a browser and data plan. “Our focus is on accuracy,” he said.
In December, privately held, New York-based kgb acquired Texperts, an SMS mobile find company based in the United Kingdom. That acquisition gave the company both technology and talent with a strong focus on the work-at-home community.
Kgb is launching TV commercials as well to get its brand out there. It’s a premium SMS service, and each question/answer costs the end-user 50 cents.
Skyhook Releases SDK Upgrade
By Wireless Week Staff
Skyhook Wireless, provider of the Wi-Fi Positioning System (WPS), upgraded the publicly available Skyhook SDK to include Android support, as well as simpler deployment models.
The company says developers can now offer iPhone-quality positioning in location-aware Android applications. “I have investigated the new Skyhook SDK and look forward to integrating it into the Android version of our application,” stated Brady Becker, co-founder of the social networking application BrightKite, in a press release. “I am thrilled that we can offer our Android users the same reliable, fast and accurate location performance that they have come to expect on the iPhone."
By adding hybrid positioning methodology to the SDK, Skyhook says it offers reliable location results to consumers in all environments. “Consumers today expect location-aware applications to work everywhere they travel,” stated Ted Morgan, CEO of Skyhook. “By enhancing our Wi-Fi Positioning functionality with cell tower triangulation and GPS support, Skyhook gives developers the opportunity to provide fast and accurate location results that meet consumer standards.”
The upgraded SDK is 75% smaller than previous versions, designed for deployment in mobile applications and devices with size constraints. Symbian enhancements now include support for the PSY interface on S60. On Windows Mobile, Skyhook now supports the GPS Intermediate Driver. Skyhook also added a feature that automatically enables Wi-Fi, improving the user experience by saving battery and reducing user interaction with the location functionality.
Developers can license the Skyhook SDK on a per unit/user basis. Ad revenue share models are also available in conjunction with Skyhook's advertising partners. The SDK is available for download at http://www.skyhookwireless.com/developers/sdk.php.
FirstNews Briefs for Jan. 14, 2009
Companies in today’s briefs: Yahoo!, Towerstream, Fujitsu Network Communications, Nokia Siemens Networks, T-Mobile Austria, Nokia, Mformation, HTC, Huawei, LG, Motorola, Nokia, Palm, Samsung. Siemens, Sony Ericsson, ZTE, Meez, Pulse Entertainment, Anthem Venture Partners
• Yahoo! announced that Carol Bartz, who most recently was executive chair of Autodesk, was named CEO, effective immediately. Prior to becoming executive chair of Autodesk in 2006, Bartz, 60, led Autodesk as CEO for 14 years. Yahoo! also announced that President Sue Decker has informed the board that she will resign after remaining with the company for a transitional period.
• Fixed WiMAX service provider Towerstream announced that it has reached EBITDA profitability in its San Francisco market. It’s the fifth market of nine to generate market cash flow, following New York, Boston, Providence and Chicago.
• Fujitsu Network Communications announced an expansion of existing laboratory facilities at its Richardson, Texas, headquarters to support next-generation wireless technologies, including LTE. The R&D center will serve as the focal point for LTE trials in the United States, in addition to performing interoperability and verification activities to support North American operators.
• Nokia Siemens Networks (NSN) says it will manage the mobile backhaul of T-Mobile Austria’s network. Under the contract, which runs through 2013, NSN will assume full responsibility for the optimization and operation of the mobile backhaul network. The control and responsibility for the network and the supervision of its quality remains with T-Mobile Austria.
• Nokia says that its Qt cross-platform User Interface (UI) and application framework for desktop and embedded platforms will be available under the Lesser General Public License (LGPL) version 2.1 license from the release of Qt 4.5, scheduled for March 2009. Previously, Qt has been made available to the open source community under the General Public License (GPL) license. In addition, Qt will now be available from the new domain, www.qtsoftware.com Qt Software, formerly Trolltech, was acquired by Nokia in June 2008.
• MFormation Technologies announced that more than 40 major mobile device vendors are supporting standards-based initiatives to ensure that their devices can be managed seamlessly by the Mformation Service Manager platform. Vendors participating in the Mformation device programs include HTC, Huawei, LG, Motorola, Nokia, Palm, Samsung. Siemens, Sony Ericsson and ZTE.
• Social entertainment community Meez is merging with Pulse Entertainment, provider of avatar messaging services for mobile phones and Websites. In addition, Los Angeles-based venture capital firm Anthem Venture Partners led a new financing round for Meez. Meez plans to integrate the Pulse messaging services into its portal to offer its 8 million registered users advanced Web and mobile messaging capabilities.