LightSquared Deal with Sprint: Possible Strategic Implications?

LightSquared reportedly has reached a 15-year deal with Sprint Nextel Corp. to share network expansion costs and equipment for the planned wholesale LightSquared Long Term Evolution network.

The deal, valued at as much as $20 billion, would provide revenue for Sprint, a faster buildout for the LightSquared national LTE network, and also makes Sprint a wholesale customer of LightSquared as well. Early reports had suggested that Sprint would receive both cash and capacity on the LTE network as part of the deal. Sprint deal.

Beyond the important tactical considerations (revenue for Sprint, faster buildout at lower cost for LightSquared), there are potential strategic angles as well. The deal immediately confirms that Sprint will migrate at least some of its services to the LTE air interface.

But that also raises more questions about the fate of its Clearwire investment and strategy. Sprint consummates LTE  deal with LightSquared

There is some growing speculation that Clearwire is getting ready to sell itself in any case. So what might that mean? Would Sprint abandon Clearwire and work with LightSquared instead? Would Sprint acquire the remainder of Clearwire it does not already own?

Sprint owns about 54 percent of Clearwire already, and if it acquired the rest of Clearwire, Sprint would have all the spectrum it needs to build a new Long Term Evolution network, in addition to the rights to use some of the LightSquared spectrum.

Some of us have been puzzled by the LightSquared plan to use satellite backhaul for LTE traffic. The satellite latency would not be an issue for some applications, but voice and other real-time applications would suffer, without some possibly-expensive processing operations.

Would it make sense for LightSquared to use its satellite capabilities for remote locations, while using Sprint's optical backbone for voice and real-time services? And is LightSquared a way for Sprint to separate itself from Clearwire? See Sprint, Clearwire tensions

Or would Sprint simply allow another buyer to get the Clearwire spectrum? That would raise cash for Sprint, but obviously create another national 4G network.

LightSquared faces some immediate buildout pressures. The Federal Communications Commission has required Harbinger build out its network to provide coverage to at least 100 million people in the U.S. by the end of 2012, 145 million people by the end of 2013, and 260 million people by the end of 2015.

Credit Suisse analyst Jonathan Chaplin estimated earlier this month that LightSquared has about $1 billion of cash on hand at present and would have to pay Sprint about $10 billion over eight years for the right to ride on its network. Clearwire cash needs.

Also, is there a viable way for Sprint to leverage both Clearwire and LightSquared to create a bigger presence in the wholesale part of the mobile business? Both Clearwire and LightSquared have formal wholesale business plans, while Sprint arguably has been the most willing of the national mobile carriers to explore wholesale business models.

If the AT&T acquisition of T-Mobile USA succeeds, Sprint will face two formidably larger competitors and will have incentives to try something a bit more daring. Sprint has in the past been the national wireless provider most willing to work with cable operators and other competitors, for example.

Might Sprint once again try to become the carrier of choice for "all the rest of us?" Historically, wholesale offers lower operating costs, if also lower margins. But the overall broadband access markets are likely to see significant revenue changes in coming years, and the wholesale segment could grow.

So will new revenue models, including any number of services crafted by third parties and business partners. That would seem to create more room for wholesale to work. Will Sprint try?

What is Valuable to a Brand "Fan" on Facebook?

Product news and information, contests, prizes, sales, coupons and other offers are among the top reasons consumers become "fans" of brands on Facebook, according to a study sponsored by the World Federation of Advertisers.

http://www.imediaconnection.com/content/29305.asp?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+ImediaConnectionAll+%28iMedia+Connection%3A+All+Stories%29

Why Marketers Shouldn't Waste Their Time With QR Codes

Overuse of a new technique or technology in the marketing business is nothing new. New technology tends to follow a predictable path from discovery, to overuse and disillusionment, and eventually, a proper or right level of use. But not every innovation proves to be highly valuable, on an extended basis. Some think the QR code is one of those questionable long-term innovations.

Quick response code, those two-dimensional bar codes you see on magazine pages relatively frequently, are one way an offline media can incorporate online content and interaction. That's a good thing.

But some would argue that the problem is that consumers don't much care, while marketers do care. The issue isn't whether tools to introduce more online interaction are a good thing--it is a good thing--but whether this is the right, or "best" approach.

"QR codes can actually impede the conversation," some would argue. First, you have to assume not everyone knows what they are, so you have to explain how they work. Then, you just hope people are willing to download the app and go through the hassle of getting it to work.

Then and only then will they be exposed to whatever brilliant website you have put together. And the majority of the time, this process neglects the critical issue of why someone would want to do any of this in the first place. Right now the answer to that seems to be, "Because marketers thinks it's cool."

Why Marketers Shouldn't Waste Their Time With QR Codes

SMBs Boosting Wireless Data Spend

In-Stat expects small and medium businesses will ncrease their spending on wireless data services by 42 percent from 2010 to 2015. U.S. businesses with one to four employees will lead the category, increasing spending by over 45 percent on wireless data from 2010 to 2015. That has to be one of the least-surprising trends one could imagine.

“Voice has become a commodity, with growth in voice services essentially being stagnant across all sizes of business,” says Greg Potter, In-Stat Data Analyst. “Messaging has been wonderful to the carriers, but the revenue picture here is stagnant as well, with marginal increases or decreases."

"Future growth is all about providing data access to smart phones, tablets, and notebooks, period; end of story," he says.

SMB businesses in total consume about half of all wireless services on a revenue basis.

In-Stat - Press Releases

Google Nexus 4G Specs?

Google's Nexus S device is interesting in that it is supposed to represent Google's thinking about what a smart phone should be like, as Apple's iPhone is that firm's embodiment of what it believes a smart phone should be like.

Boy Genius reports that the Google Nexus 4G will feature a next-generation dual-core 1.2GHz or 1.5GHz CPU, a 720p HD screen, and it won’t feature physical Android menu buttons below the screen anymore — everything will be software-based.

Additionally, we can expect a 4G LTE radio, 1GB of RAM, 1080p HD video capture and playback, a 1-megapixel front-facing camera, and a 5-megapixel rear camera.

Exclusive: Google Nexus 4G detailed - 720p display, 4G LTE, Android 4.0

Average U.S. Smartphone Data Usage Up 89% as Cost per MB Goes Down 46%

According to Nielsen’s monthly analysis of cellphone bills for 65,000 lines, smart phone owners, especially those with iPhones and Android devices, are consuming more data than ever before on a per-user basis, but since prices are flat, the price-per-consumed-megabyte has dropped.

In the last 12 months, the amount of data the average smartphone user consumes per month has grown by 89 percent from 230 Megabytes in the first quarter of 2010 to 435 MBytes in the first quarter of 2011.

Data usage for the top 10 percent of smartphone users is up 109 percent, as you would expect. Heavy users are heavy users. The top one percent of users have grown their usage by 155 percent from 1.8 GBytes in the first quarter of 2010 to over 4.6 GBytes in the first quarter of 2011.

Still, though growth is occurring across the board, at the 80th percentile and below, users consume 500 Mbytes or less each month. In the 60th percentile, users consume 250 Mbytes or less each month.

The amount the average smartphone user pays per unit of data has dropped by nearly 50 percent in the last year, from 14 cents per megabyte to eight cents.

Average U.S. Smartphone Data Usage Up 89% as Cost per MB Goes Down 46%

Why Marketing Best Practices Aren't Always Best

As helpful as best practices can be, sadly they’d don’t always work. In fact, sometimes they can hurt.

Take the case of Dropbox, a software start-up that originally followed industry-standard best practices, such as investing in advertising, conferences and in a PR firm. But it didn't work. The cost of customer acquisition was just too high. Essentially, the traditional way to launch and market a company wasn’t allowing Dropbox to scale or grow fast enough.

Why did industry-proven techniques not work for Dropbox? After all, they worked great for other companies? Perhaps because best practices merely present a standardized, cookie-cutter solution, and no business is the same.

“Best practices are an attempt to take a solution to a problem out of the context and apply them across the entire spectrum, and that essentially invalidates the entire thing. A solution is only useful when considered in context.”

Why Marketing Best Practices Aren't Always Best: