Latest Telecom Industry News

Verizon (NYSE:VZ, news, filings) is planning to go over the top in a big way with a direct challenge to both Netflix and Amazon. They announced today a partnership with Coinstar’s Redbox aimed at bringing streaming video to consumers. And not just in their own territory but nationwide, which means they’ll be doing it over … [visit site to read more]

Football was the main attraction during yesterday's Super Bowl XLVI, but the commercials in between the plays also captured many viewers' attention. The mobile industry was front-and-center during many of those commercials as it attempted to get some Super Bowl attention with a range of mobile-focused ads and technologies. It's no real surprise that advertisers are keen to tap into users' mobile interests; nearly 40 percent of respondents used mobile devices in response to TV ads during the game, according to mobile ad network provider InMobi, and 45 percent estimated that they would spend 30 minutes or more on their mobile devices during the game. 

Click here to watch the Best Buy ad and other mobile-focused Super Bowl ads.

Perhaps the best example of the mobile trend during the Super Bowl came from Best Buy, which is working to expand sales of mobile phones and smartphones through its retail locations. The company used its 30 seconds of Super Bowl glory to showcase mobile innovators--including  Instagram founder Kevin Systrom and Shazam creators Chris Barton and Avery Wang--in an effort to highlight the continued advances in mobile technology. The unspoken point, presumably, is that Best Buy is aware of trends in mobile technology and is well suited to help shoppers determine which phone to buy.

Another major step forward in the mobile technology trend came from website vendor GoDaddy, which displayed a QR code during the entire duration of its cloud-focused Super Bowl commercial.

But Super Bowl ads weren't the only place where mobile shined. The game was available on Verizon Wireless (NYSE:VZ) phones through its NFL Mobile app. And for those not on Verizon, the NFL itself created the free Super Bowl XLVI Guide app for viewers to obtain information on the game's teams and players. There's even a $1.99 app for iOS devices that allows users to view Super Bowl commercials and share them with friends.

For more:
- see this InMobi release
- see this FierceMobileContent article
- see this VentureBeat article
- see this Orlando Sentinel article

Special Report: Mobile highlights in Super Bowl commercials

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Streaming Super Bowl ads top cost of broadcast ads

The gaming industry has gone through a rapid transformation in the past three years. With the smartphone penetration rate climbing, users are increasingly turning to mobile apps to get their gaming fix instead of portable gaming titles for the Nintendo DS or Sony PSP. The Nintendo and Sony franchises are clearly popular in their own right, but their overall market share in the portable gaming market is shrinking. Both companies design consoles as well as games, and have thus far avoided moving into the mobile space. Will Nintendo and Sony be able to ignore the mobile market forever? Should they even worry? Special feature

Cox Communications will cut more than 100 jobs when it finally closes down its wireless business next month, according to a report in the Atlanta Business Chronicle.

The report, which cited an unnamed source, said that engineers, product development managers and infrastructure designers will be affected by the job cuts. Cox said Kelly Williams, who has headed the company's wireless unit since Stephen Bye left to become CTO of Sprint Nextel (NYSE:S) in 2011, will remain with Cox's product strategy business.

Cox spokesman Todd Smith declined to comment on the specific number of job cuts, but did confirm that some are coming. "As previously announced, our wireless strategy has changed and we must adjust our workforce to align with our new strategy," he told FierceWireless. "Our employees have done everything we have asked and for that we are thankful. We are extremely focused on making this transition as easy as possible on our employees."

In mid-November Cox stopped selling wireless service to new customers and said that it would shut off all wireless service by March 30. The decision came after Cox abandoned plans to build its own wireless network; the company has been operating as an MVNO of Sprint since November 2010 and launched wireless service in less than 50 percent of its total footprint.

Cox said in November that all of its wireless customers would receive a $150 credit on their bill for every line of wireless phone service disconnected. The company said customers could keep their wireless devices and that all early termination fees would be waived.

In December Cox agreed to sell 20 MHz of its AWS spectrum covering 28 million POPs to Verizon Wireless (NYSE:VZ) for $315 million. The deal, which includes the option for Cox and Verizon to resell each other's services, is connected to Verizon's decision to spend $3.6 billion to buy AWS spectrum from SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. The deals still need to be approved by the FCC and Department of Justice.

For more:
- see this Atlanta Business Chronicle article

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Verizon to buy Cox's AWS spectrum for $315M
Cox abandons wireless service
Could Sprint use Cox and SpectrumCo AWS spectrum to launch LTE?

Quick news from around the Web.

@FierceWireless: BTIG's Walter Piecyk: Pre-paid iPhone Could Disrupt the Wireless Market: Post (reg. req.) | Follow@FierceWireless

> A Windows Phone developer left the company to work on Amazon's Kindle team. Article

> Motorola Mobility warned that some of its refurbished Xoom tablets contained information from the previous owner. Article

> Ericsson's CEO said job cuts may be in the manufacturer's future. Article

> Simplexity MVNO Services, a mobile virtual network enabler, announced it will use the Sprint nationwide wireless network to offer third-party branded voice and data services. The deal covers CDMA and WiMAX. Release

> Google reportedly hired a senior designer from Apple for a secret project. Article

> The iPhone accounts for 75 percent of all handset industry profits. Article

> U.S. Cellular is offering a voice to text service. Article

> Motorola Mobility is looking for 2.25 percent of all Apple iPhone sales for a patent licensing agreement. Article

Mobile Content News

> Digital music service Rdio unveiled a redesigned version of its streaming application for devices running Google's Android mobile operating system. Article

> Verizon Communications and Coinstar-owned video rental service Redbox are teaming for a new multi-platform subscription service enabling consumers to access streaming entertainment via mobile devices and the Web. Article

Broadband Wireless News

> Former Federal Communications Commission Chairman Reed Hundt last week voiced strong opposition of spectrum legislation circulating in the U.S. House of Representatives. Article

> HTC said it fixed a Wi-Fi security hole in its Evo 3D. Article

> The NetAmerica Alliance of rural service providers has chosen to deploy Ericsson's 4G LTE mobile broadband router. Article

European Wireless News

> Everything Everywhere will begin repositioning its Orange UK and T-Mobile UK brands this week. Article

> A market research firm says that operators must cut network carriage costs by 50 percent or face an overwhelming eight-fold increase in the costs of radio access network equipment. Article

> Is the end near for feature phones? Editor's Corner

And finally... How to find out how romance failed. Article

Harbinger Capital Partners, the hedge fund that backs wholesale LTE provider LightSquared, reported a 47 percent drop in its biggest fund, thanks in large part to a writedown in the company's investment in LightSquared. LightSquared is still working to secure approval from regulators to launch its terrestrial service, which has been mired in concerns that its network interferes with GPS receivers.

According to multiple reports, the losses in 2011 caused Philip Falcone's Harbinger to see its assets drop to $4 billion at the end of 2011, from a high of $26 billion in 2008. Harbinger has invested $3 billion in LightSquared, and Harbinger cut the value of its investment in LightSquared by nearly 60 percent.

"The decline was primarily due to a conservative adjustment in the Fund's holdings of LightSquared, to be consistent with the results of work done by the Fund's third party valuation firm," Harbinger spokesman Lew Phelps said in a statement released to news outlets Friday. "The valuation takes into account uncertainty about the outcome of political issues related to alleged interference with the GPS system by LightSquared transmitters," Phelps added.

LightSquared is working with the FCC and National Telecommunications and Information Administration on GPS interference tests. The FCC must certify that all concerns have been addressed before LightSquared can begin operations, and the drawn-out process has increased concerns that LightSquared may run out of money. However, LightSquared officials said last month that the company has enough money to last for "several quarters."

Last week Sprint Nextel (NYSE:S) gave LightSquared until mid-March to get FCC approval to launch service. Sprint and LightSquared announced a 15-year, $9 billion network-hosting deal last July, whereby Sprint will build LightSquared's radio access network as part of Sprint's own network upgrade (LightSquared will operate its own, separate core network).

The FCC said last month that it will take public comment on a LightSquared petition until Feb. 27, with follow-up responses due by March 13. In December LightSquared petitioned the FCC to declare that GPS device makers are at fault for interference caused between LightSquared's L-band spectrum and GPS receivers, and that LightSquared, a licensed spectrum holder, should be allowed to launch commercial service as quickly as possible.

For more:
- see this Bloomberg article
- see this Reuters article
- see this WSJ article (sub. req.)

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As expected, HTC reported a 26 percent drop in fourth-quarter profit, but the Taiwanese smartphone maker also forecast a tough first quarter as it undergoes a "product transition" and warned that its first-quarter revenue could fall as much as 36 percent from the fourth quarter.

HTC reported net profit in the quarter of around $369 million, as was expected after the company released unaudited results for the fourth quarter in January. The company's 26 percent drop in quarterly profit was its first profit drop in two years. Revenue for the quarter clocked in at $3.42 billion, down 2.5 percent from the year-ago period. For the first time, HTC did not provide shipment volumes for the quarter, nor did it provide a shipment forecast.

However, it was HTC's weaker forecast for the first quarter that has analysts and investors worried. The company said that it expects revenue to be between $2.2 billion and $2.36 billion for the quarter, weaker than analysts' expectations of $2.86 billion, according to Bloomberg. 

"Our weakness in first-quarter guidance also comes from facing competition in the U.S. from iPhone and Samsung," HTC CFO Winston Yung said on a conference call. "LTE handsets also didn't meet our expectations." HTC said it expects first-quarter gross margin and operating margin to come in at around 25 percent and 7.5 percent, respectively, down from 27.12 percent and 12.71 percent in the fourth quarter. However, Yung said margins will return to levels the company experienced in the first three quarters of 2012 once the company's product transition is over, back to levels of 28 to 29 percent for gross margin and 14.86-15.81 percent for operating margin. 

HTC has been under pressure from other companies in the increasingly crowded market for devices running Google's (NASDAQ:GOOG) Android platform and Microsoft's (NASDAQ:MSFT) Windows Phone. The company is expected to debut new models later this month at the Mobile World Congress in Barcelona, Spain, including an Android smartphone with a quad-core processor dubbed the "Ville."

"In 2011 we saw growth in the global strength of our brand, as well as earnings and revenue growth," HTC CEO Peter Chou said in a statement. "While short term performance may not meet the results as expected, we have gained further experience and advancement in the areas of brand management and product innovation. These fundamental strengths and the groundwork we have laid will take us into 2012 with a renewed focus and determination."

Looking ahead to the rest of 2012, the company said in a statement that it will focus on growing its brand value, continuing to create competitive advantages through innovation, enhancing the efficiency of its marketing campaigns and driving down operating costs. HTC said it will focus on a globalized marketing campaign "to optimize its go-to-market strategy with operators, retail distributors, and end-users, and improve the efficiency of its marketing spend."

"It can be turned around," IDC analyst Melissa Chau told Reuters before HTC gave its first-quarter revenue guidance. "But the problem remains the same: How are they going to differentiate?"

For more:
- see this release
- see Bloomberg article
- see this Reuters article
- see this AP article

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Analysis: Why Apple and Samsung are killing it in the smartphone market
HTC's Q4 profit drops nearly 26% as Samsung's profit soars
HTC reassures market after cutting its Q4 revenue forecast
HTC cuts revenue forecast, re-evaluates $300M purchase of S3 Graphics
HTC's Q3 smartphones sales shine, but company predicts tough Q4

Nokia (NYSE:NOK) and Nokia Siemens Networks denied a report that Siemens is actively seeking to replace Nokia Siemens CEO Rejeev Suri, who is leading the infrastructure vendor through a massive reorganization.

Suri

While a Nokia spokeswoman declined to comment, Reuters reported that Nokia called reports about Suri's exit "complete rubbish." Further, Nokia Siemens spokesman Ben Roome confirmed that Jesper Ovesen, the executive chairman of Nokia Siemens, said that the NSN board "has full confidence" in Suri.

On Friday Reuters reported that Sibylle Wankel, a Siemens supervisory board member, said that Siemens CFO Joe Kaeser has been looking around for a replacement to Suri. Wankel represents the IG metall trade union, which protested outside of NSN's Munich offices last week.

NSN said in November it would undergo a major restructuring to focus on mobile broadband and that it will slash up to 17,000 jobs by the end of 2013. The vendor said last month it expects to take substantial charges in the first quarter related to the restructuring. Since that November announcement NSN has sold several of its business units. In December it sold its wireline business to Adtran and its WiMAX business NewNet Communication Technologies, which is backed by private equity firm Skyview Capital. In November, NSN sold its microwave business unit to DragonWave.

For more:
- see this Reuters article
- see this separate Reuters article

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Hybrid RLEC/CLEC Consolidated Communications (NASDAQ:CNSL, news, filings) said today that it is making a major M&A move by purchasing SureWest Communications (NASDAQ:SURW, news, filings). SureWest operates last mile networks for both residential and business customers in Kansas City and Sacramento, while Consolidated Communications operates in … [visit site to read more]

As longtime readers know, I have spent some effort over the years modeling the results of Level 3 Communications (NYSE:LVLT, news, filings), but haven’t tried to quantify much on the subject since the Global Crossing deal was concluded. The company reports its Q4 results on Wednesday morning, and there are so many moving parts that it is hard to predict just what they will say.  But many eyes will be on the company this week, so I’ll give it a go anyway. … [visit site to read more]

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