HTC, Sprint Acknowledge Using Carrier IQ Software But Deny Snooping

Sprint and HTC apparently use a diagnostic application called "Carrier IQ" that can record keystrokes and even encrypted search terms on some smart phones.

Sprint and HTC say the software is used for ordinary diagnostic reports needed to help improve the performance of mobile devices and mobile networks. HTC, Sprint Acknowledge Using Carrier IQ Software

Carrier IQ Logs Smart Phone Keystrokes

In November 2011, security researcher Trevor Eckhart announced that he found software made by Carrier IQ that may be logging your every move on your mobile phone. 


Trevor referred to it as a "rootkit", a piece of software that hides itself while utilizing privileged access like watching your every move. Carrier IQ didn't take too kindly to this accusation, and responded aggressively with a cease-and-desist letter, and went on to deny this accusation. However, to further back his accusation, Eckhart released a video that he says shows the software working. 


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Mobile Commerce Will Grow 73% in 2012

U.S. mobile commerce sales will reach $6.7 billion this year, a tiny fraction of overall retail sales, but a 91.4 percent increase over 2010. In 2012, sales will rise another 73.1 percent, to $11.6 billion, according to eMarketer.  Growing mobile commerce activity

M-commerce sales include sales of physical goods as well as travel and event tickets purchased via mobile, but exclude digital downloads and usage of mobile phones as a point-of-sale payment mechanism, the way eMarketer analyzes the market.

Also, eMarketer forecasts 37.5 million US consumers ages 14 and up will make at least one purchase on their mobile phone in 2012, up from 26.8 million in 2011.  Overall, 72.8 million mobile users will research or browse items on their phone next year, but not necessarily make a purchase.

But mobile commerce, like all other new consumer behaviors, is a habit that takes some time to develop. Over half of consumers would prefer to receive coupons by e-mail and about 30 percent would like them to be delivered using text messaging or instant messaging,  eMarketer also notes.
Mobile Coupons: Growing But Consumers Are Still Afraid

History of U.S. Telco Consolidation

Sprint Rescues Clearwire

Sprint has agreed to pay up to $1.6 billion to struggling wholesale wireless provider Clearwire over the next four years, ending the near-term threat that Clearwire could run out of cash to operate its business and possibly enter bankruptcy.

In large part, that is why Clearwire has made interest payments totaling $237 million on its first-priority, second-priority and exchangeable notes which were due Dec. 1, 2011, and which had been in danger of default by Clearwire.

The deal includes possible pre-payments for LTE services and potential equity investments. Sprint has committed to providing additional equity funding to Clearwire in the event of a future Clearwire equity offering. If Clearwire raises new equity between $400 million and $700 million, Sprint will participate in the offering on a pro rata basis up to $347 million, consistent with Sprint’s current voting interest of 49.6 percent on the same terms and conditions as other participating companies. 

The agreements modify prior wholesale pricing agreements and provide Sprint with unlimited access to Clearwire’s WiMAX network. Under the terms of the agreements, Sprint will pay Clearwire a total of $926 million, approximately two thirds of which will be paid in 2012, for unlimited 4G WiMAX retail services during 2012 and 2013, subject to certain conditions.

The agreements also establish long-term usage-based pricing for WiMAX services in 2014 and beyond. Sprint will have access to Clearwire’s WiMAX network through at least 2015.

Sprint plans to continue selling WiMAX devices with two-year contracts through at least 2012 and support those devices through the life of the contract.

In addition, the agreement provides Sprint competitive pricing for re-wholesaling by Sprint of WiMAX services to third parties as well as increased pricing flexibility for Clearwire’s own wholesale business.  

Dan Hesse, Sprint CEO says the deal “provides Sprint improved pricing, allows us to continue to provide WiMAX 4G services to our customers today and to new customers in the future and provides additional LTE capacity to help complement our ‘Network Vision’ strategy and meet our customers’ growing data demands.”  Sprint funds Clearwire

In October, Clearwire reported that it was discussing the possibility of skipping an interest payment on debt it owes. While the WiMax network isn’t the future of Sprint’s Long Term Evolution strategy, it’s essential, at least for the moment, for supporting millions of Sprint 4G customers.

As part of the deal, Clearwire agreed to keep its WiMax network operational until 2015, which will give both companies time to build out their own LTE high-speed network.

The financing from Sprint gives Clearwire $926 million for unlimited network use for 2012 through 2013. The remaining financing is a prepaid fee for Sprint to use Clearwire’s LTE network, which should be available by June 2013.

Some had speculated that Sprint might be better served to let Clearwire go into bankruptcy, then buy the assets. But that approach would not automatically allow Sprint to secure the spectrum Clearwire now uses. The latest infusion of capital gives Sprint a better bridge to its own LTE future, at the very least.

AT&T Mulls Joint Venture With T-Mobile USA as Fallback Position

AT&T and Deutsche Telekom, the parent of T-Mobile USA, have discussed an alternative transaction, forming a joint venture that would pool network assets from the two U.S. wireless carriers, as a potential alternative plan if their current acquisition deal falls apart, the Wall Street Journal reports. 


But it isn't clear that the talks are active. "There are currently no talks about a (network sharing) joint venture," Reuters reports. "This would signal that they have given up. This is not the case, we're still betting on victory, not on the second-best solution," Reuters reports a source has said. 

At least in principle, such a move could create a sort of functional separation between AT&T and T-Mobile USA retail operations and the networks on which those services are provided. Such infrastructure sharing deals have grown more common, as mobile service providers agree to share tower sites and radio facilities as a way of reducing capital investment for new networks. AT&T Mulls Joint Venture With T-Mobile


The possible infrastructure joint venture would have a different business driver, namely allowing each firm to better use their shared spectrum and radio network. In such a deal AT&T would not have to worry about antitrust concerns, as the two firms would separately maintain their distinct retail customer bases and operations. 


On the other hand, such a deal could complicate any future efforts by T-Mobile USA to sell itself outright. 

Tablets cannibalizing TV viewing, says Orange

Tablets compete with television viewing, while smart phones complement it, a new study sponsored by service provider Orange suggests. In the United Kingdom, for example, 35 percent of tablet users watch on demand content, 40 percent watch streamed content and 39 percent watch live TV on their devices.


By contrast, the study also found that smartphones are complementing TV consumption. In France, 19 percent of users said they watch more TV as a result of their mobile media usage. Tablets cannibalizing TV viewing, says Orange study