Wednesday, January 30, 2013

BlackBerry Branding - Intuitively Obvious - About Time

BlackBerry is now the corporate moniker for the old Research in Motion.  This may be non-news to the mainstream consumer/user sector as the association has always been with the product name.  To those in the analytical community we've always referred to the company as RIM or RIMM.  It seems like such an intuitively obvious move, a no brainer. But why now? 

The launch of the new BB10 seemed like a perfect timing to positively launch a new company and show execution of new thinking. Good move RIM BlackBerry.  The next move for BlackBerry marketers is to ensure the second 'B' is capitalized and to tell us what the correct marketing convention is for the plural of BlackBerry.

Here's BlackBerry's Chief Marketing Officer going through the logic.

Friday, January 25, 2013

Spectrum Win-Win for Two Giants

Today AT&T agreed to acquire spectrum in the 700 MHz B band from Verizon Wireless for $1.9 billion in cash and Advanced Wireless Services (AWS) spectrum licenses in several markets, including Phoenix, Ariz., Los Angeles and Fresno, Calif. and Portland, Ore.

The 700 MHz licenses to be acquired by AT&T cover 42 million people in 18 states — California, Colorado, Florida, Idaho, Illinois, Louisiana, Montana, New Mexico, New York, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Washington and Wyoming.  Here are the following CMAs (Cellular Market Areas):

·         California: Los Angeles
·         Colorado: Park, Fort Collins-Loveland, Pueblo,
·         Florida: Miami, West Palm Beach, Bradenton
·         Idaho: Butte
·         Illinois: Chicago
·         Louisiana: De Soto, Claiborne, Morehouse, Lake Charles, Alexandria
·         Montana: Billings, Beaverhead, Great Falls, Carbon
·         New Mexico: Grant
·         New York: Rochester
·         Ohio: Cincinnati, Youngstown
·         Oklahoma: Oklahoma City
·         South Dakota: Rapid City, Harding
·         Tennessee: Memphis
·         Texas: Texarkana, Edwards, Waco, Tyler, Longview-Marshall
·         Utah: Box-Elder, Carbon, Beaver, Piute
·         Virginia: Frederick
·         Washington: Okanogan
·         Wyoming: Sheridan, Casper

Yet another interesting sideline is the involvement of a Sarasota, FL private equity firm, Grain Management.  Verizon is selling spectrum in several North Carolina markets to Grain Management. Grain is also acquiring an AWS license covering Dallas from AT&T—and Verizon will lease that license from Grain.
Recall in Auction 73, the Lower 700 Band was up for grabs.  

How did Verizon do?

  • Block A – Verizon Wireless and U.S. Cellular both bought 25 licenses each. In this block, Verizon targeted urban areas, while U.S. Cellular bought licenses primarily in the northern portion of the U.S. 
  • Block B – AT&T Mobility was the biggest buyer in the B block, with 227 licenses totaling $6.6 billion. U.S. Cellular and Verizon bought 127 and 77 licenses, respectively. AT&T Mobility and Verizon Wireless bought licenses around the country, while U.S. Cellular continued with its strategy to buy licenses in northern regions. 
  • Block C – Of the 10 licenses in the C Block, Verizon Wireless bought the 7 that cover the contiguous 48 states (and Hawaii). Those seven licenses cost Verizon roughly $4.7 Billion. 

Why? It's a win-win because Verizon Wireless wanted to unload the 700 MHz bands (A and B Block) as its C Block and its recent AWS spectrum acquired from Cable Company partners gave a sufficient footprint nationally.  AT&T needed it to fill B Block holes nationally.  It was almost a given that AT&T would be the buyer. As an aside, earlier this month,  Verizon sold some A Block licenses to US Cellular. 

The interesting go-between of a private equity firm is notable.  It's clear that PE firms do not operate networks but a licensing/leasing arrangement from these big carriers will bring in recurring revenue.

Monday, January 7, 2013

2013 Predictions

RCR Wireless graciously asked me to write some 2013 predictions.  I'm not one for looking into a crystal ball or pulling stuff out of hat but logically things in mobile don't just start over night. Rather, I focused on trends in network and wifi.  

Read it here at RCR Wireless: 2013 Trends   

MetroPCS Q4 and 2012 Results - Ouch

MetroPCS released their Q4 2012 and year to date 2012 results ahead of the Q4 earnings call later in the month. What stands out is the surprise subscriber loss over the year. 

With over 93K subs lost in what is supposed to be a hot Q4 holiday selling season,  the results suggest that the prepaid sector is as cut throat and competitive as ever. The result of these losses invariably is a function of its gross additions.  The simple theory goes, if you have a good distribution and acquisition network, you can help offset the subscriber losses and in an optimal scenario, come out ahead.

MetroPCS' gross additions were also down in Q4 and end of year compared to 2011.  Churn is down a small bit at 0.1% or 10 basis points in financial speak. It's a small win.  There are other metrics that can help tell the story of what's going on such as EBITDA/OIBIDA margin, ARPU, CPU and CPGA but we'll have to wait on that.  While this may look bad, one can give MetroPCS the benefit of a sliver of doubt assuming that they could be letting go of low-value or high-risk users for more profitable customers.

Yet the prepaid sector is very competitive with many similar offerings from Tier 1 competitors (Verizon Wireless, T-Mobile, AT&T, and Sprint prepaid brands Boost Mobile and Virgin Mobile) and MVNOs such as Tracfone's Straight Talk and Net10.  Another worry may be any hint of distributor apathy ahead of the mid-2013 T-Mobile-MetroPCS transaction. While T-Mobile intends to retain the MetroPCS brand, MetroPCS better figure out how to reverse subscriber losses before the deal is consummated.