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September 28, 2015
Sprint said earlier this morning that it won't take part in the 600 MHz wireless spectrum
auction in the U.S. scheduled for the first quarter of 2016.
The news did come as a bit of a surprise to some.
In a press statement, CEO Marcelo Claure said-- “Sprint has all the wireless spectrum it needs
to deploy its network architecture of the future.”
Instead of beefing up its airwave portfolio, Sprint says it will focus on improving wireless
services on the spectrum it already owns.
Sprint says it will build extra cell tower sites and aggregate its bandwidth to achieve that
Some of Sprint’s critics have also suggested that the U.S.’ fourth largest mobile carrier
doesn’t have the money to take part in the spectrum auction, and there could be some truth to that.
But it's more than ten years since the company last took part in a spectrum auction, so its spectrum
inventory could be depleted by 2017 some critics say.
The FCC plans to hold a wireless spectrum auction in March 2016. The goal is to acquire frequencies
in the 600 MHz band from TV broadcasters currently using the spectrum in the United States, then sell
it to mobile carriers.
Naturally, the two largest in line would be AT&T and Verizon. A competitive auction is essential
for the U.S. government because without some bidding, the auction might not raise enough cash to
persuade U.S. broadcasters to part with their valuable spectrum.
For now, there doesn’t appear to be any threat to this plan, as the other three major operators
appear unlikely to drop out at this stage.
Overall, 600 MHz wireless spectrum is considered 'prime real estate' by most mobile phone companies,
simply because it is a lower frequency than the airwaves currently used for cellular communications.
Lower frequency signals travel further and do a better job of penetrating buildings and passing minor
obstacles than higher frequencies do.
Furthermore, lower frequency spectrum is especially useful and very cost effective for servicing customers in
less densely populated areas, as carriers can build cell towers further apart.
Sprint has extensive spectrum holdings, but most of it is at higher frequencies, therefore not as
desirable than what U.S. broadcasters have.
In other mobile news
A huge drop in the overall demand for Samsung’s newest Galaxy smartphones triggered a 5th
straight monthly decline for the phone maker, wiping out about $44 billion in market value on
its stock since April of this year.
By any measure, this is a substantial drop, even for an Asian company the size of Samsung.
Samsung dropped by almost $12 billion in its valuation in August alone as the South Korean
company surrendered a large share of its market to Apple and various Chinese rivals that offer
a lower price point.
And Samsung’s corporate decision to advance the release of its new Galaxy smartphones failed to
dispel pessimism about its second-half earnings.
Apple is largely expected to take the wraps off its new iPhone on Sep. 9 and release it in
time for the crucial end-of-year holiday shopping season.
“We all know Samsung's smartphone business isn’t doing well,” said Lee Seung Woo, an analyst at IBK
Securities in Seoul. “This is no secret to anybody,” he added.
Samsung’s global smartphone market share fell more than 3 percentage points in the second quarter,
and it no longer is the top seller in China, the world’s biggest mobile-phone market.
It is being undercut at the high end by Apple’s larger iPhones and at the mid-range and low end
of the market by devices from Xiaomi, Lenovo and Huawei.
It looks like Samsung totally misread the overall demand for its S6 models released in April, failing
to produce enough three-sided screens for the Edge while the regular version struggled against the iPhone.
One of its latest models, the Galaxy Note 5, was criticized by reviewers and mobile users this
month after the company acknowledged that the device can break if the stylus is inserted backwards
into the storage slot.
The next 2 to 3 quarters will obviously be extremely critical to the overall profitability of
Samsung. Yes it's a big electronics producer of a lot of products, but it's still vulnerable in a way
with the likes of Apple and other important competitors.
In other mobile news
Verizon CFO Fran Shammo, while speaking at a Wall Street Journal conference Monday, made it
very clear that the company has no intention of acquiring Dish Networks.
Shammo also added that Verizon will keep media assets like the Huffington Post and Tech
Crunch, which the company acquired in its $4.4 billion acquisition of AOL, but he was very
clear about his company's intentions when it comes to Dish-- Niet!
Overall, multiple reports have surfaced in the past few weeks that Dish is crafting a deal
to acquire T-Mobile.
Just last week, the Wall Street Journal reported that Dish and T-Mobile are looking at a
deal that would still leave T-Mobile parent company Deutsche Telekom with a large minority
stake in the new company, and that Dish is already talking to banks to secure funding for a $15
billion offer as well.
And yet some have questioned whether Verizon might be interested in acquiring Dish for its massive
inventory of wireless spectrum.
Shammo denied that Verizon has any interested in Dish's spectrum, telling the Journal that
if Verizon had wanted more spectrum it could have easily acquired it at auction.
This wouldn't be the first time Shammo has put to rest claims that Verizon would go to any
length for more wireless spectrum.
Speaking at an investor conference back in March, Shammo said that in the past, spectrum cost
less than it did to add capacity using technology.
“This spectrum auction flipped that balance on its head. We can build additional capacity for a
third of what this spectrum is going to cost,” Shammo said at the time, noting that the FCC’s bidding
rules need to be revised to account for companies like Dish, which took home huge amounts of wireless
spectrum at a discount while driving up prices for others.
In other mobile news
In a way, Apple is really hoping that time will repeat itself with its new Watch the way the
iPhone did when it first came out.
While its original iPhone turned heads when it first debuted in 2007, it didn't become a world-beating
smartphone until 2008, when Apple launched its App Store and made it very simple for anyone to download
apps and programs on their iPhones.
Steve Jobs' venerable iPhone went from a slick-looking smartphone that could make calls, play music
and videos, and browse the Web to a device that could do virtually anything developers could imagine.
Now Apple has the same ambitions that a radical transformation will occur with its Apple Watch, which
will get access to native applications that can fully take advantage of the wearable device and its
numerous capabilities with the next version of its Watch OS software.
"For us, this is a huge moment," said Apple CEO Tim Cook during the company's annual developer conference
on Monday. "This is how we felt when we launched the App Store in 2008."
By empowering app developers to create more robust applications, Apple is creating the foundation
for making the Watch more than just a simple, traditional watch.
One of the early knocks on Apple Watch is that it hasn't been able to do anything useful enough
to justify the cost-- it typically ranges between $349 and up to a staggering $17,000.
But like the App Store transformed the iPhone, the rise of native apps on the new Watch could
really foster the next killer app-- something innovative and useful that will have you running out
to buy the wearable device.
"Opening up native apps and access to the Watch hardware and software features to developers will
make a huge difference," said Jan Dawson, an analyst at Jackdaw Research.
"Third-party apps are key to mainstream adoption of the Apple Watch and what Apple announced
this week will finally make really compelling third-party apps possible," he added.
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Source: Sprint Wireless.
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