FCC Halts Auction Mid-day to Drop Spectrum Clearing Target…Again

The FCC’s spectrum incentive auction will go into a third stage. That’s because the second stage closed after one round yesterday, more than $35 billion short of the $56.5 billion goal. The total bid was $21,519,907,210, according to the Commission.
 
The results play into what was expected to be “tepid carrier interest,” according to Bloomberg analysts John Butler and Matthew Kanterman. They predicted earlier the total bid for airwaves would only reach around $28.2 billion, reports Bloomberg BNA.

AT&T has committed to spending $9.4 billion, and the pair estimate Comcast and Verizon will spend half that, with T-Mobile likely bidding about $5.5 billion. Continue Reading

Wireless Must Move Beyond Hardware to Grow Business

When you’re told by flight attendants before takeoff to turn off the Samsung Galaxy Note 7, that’s a sign the wireless industry needs to retrench and shift towards software. So too, are job layoffs by Ericsson and now Verizon, according to Rethink Research.

Samsung has stopped production of the device. The recall and refund process, not to mention the loss of future sales, may add up to a $5.3 billion loss. The carrier will likely shift its efforts towards non-smartphone sectors like memory, processors and displays, and boost software focus as it recovers. Continue Reading

Will $3.5B Spectrum Sale, Leaseback Save Sprint?

It’s not yet time for Sprint to pop the champagne corks but the carrier has averted a financial crisis by mortgaging some of its 2.5 GHz spectrum. Wall Street gives the carrier credit for the move which buys time to pay off creditors.
 
Sprint proposed a $3.5 billion sale and leaseback; the spectrum it’s mortgaging is being used in about 77 percent of its 2.5 GHz-enabled sites and 33 percent of its 1.9 GHz-enabled sites, according to Bloomberg. It’s the third and final part of the plan by SoftBank Group Corp. owner Masayoshi Son to use special-purpose entities to turn key assets into cash.

Sprint has staved off creditors for the moment but still has work ahead. Gimme Credit analyst Dave Novosel called the move “a great short-term solution … but they are going to need to generate cash flow to pay off these debts.”  

The number four wireless carrier has $37 billion in debt, seven years of losses and a mature wireless market requiring promotions and price cutting to retain customers, according to analysts. CEO Marcelo Claure has said if the company is revived it would be “the greatest turnaround in history.”
Claure took over in 2014, and has dramatically cut prices, sometimes offering half off his competitors’ rates, according to Bloomberg. Recently he cut Sprint’s unlimited family plan to $140 for four people, compared with $160 at T-Mobile.

But while the lowered rates help retain customers, they’re not enhancing Sprint’s bottom line. “At some point you have to start attracting customers without giving away the store,” said Novosel. Continue Reading

FirstNet Winner Pick Looming Large November 1

If the federal government sticks to its plan, by November 1, it will award a contract for the First Responder Network Authority — FirstNet. Wells Fargo Securities believes the time-table remains on-track.
 
FirstNet is tasked with cost-effectively creating a nationwide network and providing wireless services to public safety agencies across the country. The goal is to end decades-long interoperability and communications challenges for first responders.

The upside for the company that wins the contract is phenomenal. FirstNet provides wireless carriers the opportunity to procure 20MHz of nationwide 700MHz spectrum to build, operate and maintain a nationwide safety network. The government will pay carriers $7B+ to do so, according to Wells Fargo Senior Analyst Jennifer Fritzsche.

Continue Reading

Telecom Community Preps for Hurricane Matthew

As Hurricane Matthew travels towards the East Coast, telecom providers are staging equipment and calling in extra tower crews to prepare for and minimize power outages if possible. Verizon Wireless is fine-tuning hurricane prep in coastal markets and local network teams are prepared to travel to help regions hardest-hit by the storm.

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Links and resources:
FEMA Alert Warning System
Email and SMS Weather Alert Services
DownDetector: shows concentration of reports about service being ‘down’

State Emergency Alert Plans and Chairpersons:
Florida
Georgia North Carolina: EAS Chairperson, WRAL-FM, 3100 Highwood Blvd., Raleigh, NC 27604,  phone: (919) 890-6104
South Carolina: Plan: John George, Audio Broadcasting Group, Lexington, SC 29073  phone: (803) 951-7443

 

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Since last year’s storms, Verizon has enhanced its 4G network by adding capacity to cell sites, fortifying coverage along evacuation routes and deploying advanced LTE technology. It’s also installed new in-building network systems at hospitals, government and emergency facilities and other high-traffic public locations.

The company has a number of “super-switch” network processing centers, which are designed to withstand Category 5 hurricanes. With hardened shells, these facilities also feature large-scale on-site power generation, various redundant operations and technologies, and other backup systems to ensure the company’s network remains operational. Continue Reading

SBA Board Approves REIT Conversion, Sees No Change in Operations

SBA Communications announced yesterday that it has authorized its Board of Directors “to take all necessary steps for it to qualify as a real estate investment trust (“REIT”) for tax purposes.”  SBA intends to be taxed as a REIT commencing with its taxable year ending December 31, 2016.
 
“We are pleased to announce this plan for conversion because we believe REIT status is the optimal structure for our business given the real estate nature of our assets,” stated Jeffrey A. Stoops, SBA’s President and Chief Executive Officer.  “We believe a REIT structure will provide many opportunities for creating long-term shareholder value.  We have been working on this plan for approximately two years.  We expect our conversion to a REIT to have little to no effect on our operations, as we have been operating in compliance with REIT rules since prior to the beginning of 2016.  We intend to continue our focus on maximizing long-term adjusted funds from operations per share through growth and disciplined capital allocation.”  Continue Reading

FCC Proposes Phased TV Repack Per Wireless’ Wishes

Tower owners and operators, wireless companies, broadcasters and their equipment providers told the Commission a phased-in approach to the television spectrum repack, post-auction, makes sense. Now, the FCC agrees.

Several FCC bureaus are developing a phased-in approach. The agency has proposed construction deadlines to coincide with its proposed 39-month “phased” transition schedule. The FCC seeks comments on the proposal in a Public Notice. Comments are due to MB Docket 16-306 or GN Docket 12-268 on October 31.

The Commission is balancing “the need for a post-incentive auction transition timetable that is flexible for broadcasters and that minimizes disruption to viewers” with the need for a schedule that “provides certainty to wireless providers and is completed as expeditiously as possible,” it said in a notice released Friday. Continue Reading