A closer read of Clearwire regulatory filings revealed the extent of the LTE gamble. Despite securing around $1 billion recently, the company may need to hold its hand out again before the end of the year.
As if to assuage the doubts of the critical investor, Clearwire announced the rollout of its LTE network…a full 16 months ahead of time. I’m no fortune teller, but I do know that a lot can happen in 16 months, and new network buildouts are subject to all types of challenges. Bluntly, they tend to take more time than planned. But, again, maybe Clearwire knows something we don’t. Maybe they’re using the new Amdocs Single Click Network Rollout solution (it’s capable of reducing base-station design times by up to 90 percent, says Amdocs). We’ll just have to wait and see.
LightSquared Fumbles in the Fourth Quarter
If there’s one thing I’ve learned this month, it’s that no one benefits when farmers are angry and drivers get lost. What does this have to do with telecom? A lot actually, especially if your nametag reads LightSquared.
Whether or not testing was rigged, crops were crippled, or anyone got lost on the highway, one truth remains: the FCC formally pulled the plug on LightSquared’s $14 billion LTE network for interfering with telematics systems from John Deere and OnStar (among others).
This decision has far-reaching implications. Sure, LightSquared was forced to cut 45 percent of its workforce, and LightSquared’s investors became a tad sore with brash billionaire Philip Falcone’s pet project. Those outcomes were expected. The bigger story is that the opportunity for MVNOs and MSOs, who wanted to jump into the 4G wireless game, evaporated. Network buildouts are cost prohibitive for all but the biggest players. With its wholesale model, LightSquared aimed to be the biggest, fattest, dumbest pipe at a time when most CSPs do everything they can to divorce themselves of such a concept.
In the meantime, news broke that the government in the U.K. earmarked more than $280 million on filters that block 4G interference. This takes the discussion out of the cornfield and into congressional chambers, where lobbyists for top telecoms are known to pick up the tab for lunch. Why the sour grapes for LightSquared?
Proposing an answer, Wired published a withering opinion on the opportunities in telecommunications in the U.S. Writer Susan Crawford led with this crippling commentary: “If you’re thinking of investing in anything that might disrupt the business plans of the established brands in the tiny club of American telecommunications businesses, keep this in mind: Logic is for losers.” She went on to say the FCC’s action against LightSquared represented, “the latest, saddest episode in a long string of stories signaling that upstart investors should look outside the telecommunications sector for opportunities.”
What do you think? Seriously, let's discuss this on LinkedIn—have telecommunications opportunities in the U.S dried up?
Acquisitions and Divestitures
Plenty of properties, real and virtual, changed hands over the past month. Here's a quick overview of some of the most notable acquisitions and divestitures:
Juniper Networks purchased security software provider Mykonos Software. Mykonos specializes in intrusion deception systems; perhaps all the news coverage of Anonymous and Nortel hacks is prompting new business opportunities?
Ericsson acquired Canadian WiFI provider BelAir Networks in order to add carrier WiFI to their solution portfolio. Ericsson also clarified its BSS/OSS strategy following the $1 billion Telcordia acquisition, with a newly named business unit: Business Unit Support Solutions.
Verizon bought Plateau Wireless, an operator in New Mexico, to add 26,000 square miles of coverage to their red maps.
Cisco pulled the plug on Scientific-Atlanta, the set-top box business it bought for $7 billion six years ago.
Etisalat and Batelco Group shuttered Indian telecom operations, an early casualties caught in the fallout of the $39 billion Indian telecom scandal.
- Hutchison picked up Orange Austria for $1.7 billion as part of a $31 billion overseas investment strategy.
