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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: Peter Ecclesine who wrote (22043)	6/17/2007 3:42:52 AM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 46821

Hi Peter. You stated: "There is no use comparing the past (3G) with the future nationwide Sprint network." In retrospect, agreed. It's conceivable that, by the time its network is soup, 3G will already be on its way to becoming an anachronism :-) As for the fool piece, yes.. churn is a critical factor. But if the fools wanted to be consistent with their stated goal of looking at trends instead of churn rates, then wouldn't it have been more informative for the reader if they'd shown actual subscription numbers? IIRC, Sprint-Nextel made a claim not too long ago, which I found a bit curious, concerning not holding subs to contractual terms. Am I mistaken about this? If this is true, then I could envisage a rush of users interested in doing try-buys while still subscribed to their then-existing provider, which would have the effect of muddying up these churn analyses, somewhat. Don't you think? FAC

To: Peter Ecclesine who wrote (22043)	6/19/2007 8:00:40 AM
From: Peter Ecclesine	Read Replies (1) \| Respond to of 46821

Hi Frank, >>Sprint Explores Options for WiMax<< Clearwire and Sprint / Nextel Likely To Combine 2.5 GHz Mobile WiMAX Deployments By Steve Stroh, June 15, 2007 bwianews.com Yesterday's Wall Street Journal reports that Sprint/Nextel and Clearwire have held discussions about the future of Sprint's proposed Mobile WiMAX deployments using its extensive 2.5 GHz spectrum licenses throughout the US: At a Bear Stearns Cos. conference this week, Sprint Chairman and Chief Executive Gary Forsee suggested Sprint would consider spinning off the WiMax unit, but didn't provide further details. One idea being considered would be to spin off Sprint's WiMax unit as part of a deal with Mr. McCaw's Clearwire Corp., people familiar with the matter say. The two sides have had discussions in recent months, the people say. I think that this has been the plan all along. McCaw has been on the inside track of the fate of the combined Sprint and Nextel (which acquired the spectrum from Worldcom) 2.5 GHz spectrum since his tenure at Nextel; perhaps the promise of ultimately wresting control of Sprint / Nextel's 2.5 GHz nationwide spectrum was McCaw's impetus for forming Clearwire. While it's been widely stated in the popular press and the "wirelessati" bloggers that combining Sprint and Nextel's 2.5 GHz spectrum footprint was a major impetus for the Sprint / Nextel merger... I don't think that's really the case. My opinion is that combining Sprint and Nextel's 2.5 GHz spectrum was, at best, a minor consideration in the merger (even though it ended up being touted as a "major synergy"). I think that the major impetus for the merger was that both had something that the other needed to grow beyond their respective roles in the wireless industry. Nextel had a huge, complex transition to make to resolve interference issues to public safety two-way radio systems. While it was awarded the precious last 1.9 GHz PCS block by the FCC in exchange for vacating 800 MHz channels, to make use of that spectrum it would have to build out a brand new network at 1.9 GHz, nationwide - something that it could ill-afford, both for cost and time-to-deploy reasons. Sprint had its challenges in trying to grow against the onslaught of Verizon and Cingular/AT&T who were both growing by leaps and bounds both in acquiring customers and acquiring additional spectrum through acquisitions, and no good way to acquire additional spectrum that wouldn't conflict with the elegance of having using a single block of spectrum nationwide (no coordination or interference issues with adjacent blocks). So, the Sprint / Nextel merger was a marriage of convenience. Nextel customers can now be migrated off IDEN on 800 MHz to Sprint's new Push-To-Talk-Over-CDMA capability on a mature and paid-for 1.9 GHz CDMA network. Using that last PCS block awarded to Nextel, Sprint can expand its networks in highly congested areas to serve existing customers and most importantly, continue to add 1xEV-DO (and Rev. A) data-only customers which are quietly becoming a major part of Sprint's overall business. Offering Mobile WiMAX on its 2.5 GHz spectrum sounds good and gives people an impression of Sprint / Nextel being a leader and an innovator, even though I've been told by a number of sources that Sprint truly doesn't have any solid plans on how it would market Mobile WiMAX other than commodity Broadband Internet Access that happens to be mobile. But, even lacking a "vision"... Sprint / Nextel probably would deploy such a system if it could afford to do so. But Sprint / Nextel is struggling. It has lost Nextel customers in the wake of trying to transition them from the Nextel network to the Sprint network. Sprint / Nextel's stock price has lagged since the merger, and the projected $3B cost to deploy Mobile WiMAX on 2.5 GHz is being questioned very seriously by stockholders and analysts. In short, deploying Mobile WiMAX on 2.5 GHz may well be a distraction and a financial drain that Sprint / Nextel simply can not afford at the moment. So, it's quite logical that Sprint / Nexel would be talking with Clearwire about "taking over" their 2.5 GHz spectrum. I think that a lease arrangement is a more likely scenario than Clearwire buying the spectrum outright from Sprint / Nextel. Another reason for Sprint / Nextel to want to deal with Clearwire to take over their 2.5 GHz spectrum instead of another entity is that in Clearwire, they're not (quite) enabling a direct competitor (yet). Sprint / Nextel's ability to offer 1xEV-DO / Rev. A services and native voice, with full mobility, with a nationalwide footprint won't be able to be matched for years by Clearwire, enough time for Sprint to dig itself out of its current hole. If Sprint / Nextel were to make a deal to use their 2.5 GHz spectrum with, say, Verizon, it would be enabling a direct competitor. For its part, Clearwire gains not only sufficient spectrum to offer services truly nationwide, but that much spectrum, nationwide, grants it credibility with investors that would then be far more likely to complete the financing that Clearwire will require to deploy Mobile WiMAX in the coming years (as opposed to its current deployment of fixed-mostly, portable-at-best proprietary NextNet Wireless / Motorola systems.) Another synergy is that both Sprint / Nextel and Clearwire are pragmatic about entering into arrangements for others to use their networks under the other party's branding (most recently, Clearwire entering into a marketing partnership with DIRECTV and Echostar.)Yet another point in favor of Clearwire taking over Sprint / Nextel's Mobile WiMAX deployment on 2.5 GHz is that Sprint / Nextel hasn't yet deployed any substantive equipment, only test deployments (and, of course, its legacy Sprint Broadband Direct customers using Hybrid Networks (now defunct) systems. Letting Clearwire take over its Mobile WiMAX effort will be a bitter pill for Sprint / Nextel to swallow given its high-profile promises for Mobile WiMAX and the overall favorable press and analysis it has gathered since announcing it. The PR spin will be interesting.