Dish Network Bids for Clearwire

Sprint, which has been engaged in a purchase of Clearwire Corporation, now faces a rival bid from Dish Network. Dish has made a non-binding offer of $3.30 per share.

Sprint earlier had made a binding offer of $2.97 a share. As always, a range of possibilities, some not mutually exclusive, could explain the bid. Since Dish needs a partner to build out its now-approved Long Term Evolution network, an acquisition of Clearwire might help on that score. 

Dish might be betting that the value of its new LTE license, plus the Clearwire network, would make an attractive asset for another company to purchase.

But Dish might also be trying only to irritate a major competitor, drive up that competitor's purchase price for Clearwire, and send yet one more signal that Dish Network is serious about getting into the mobile business. 

Sending such signals would, one might argue, both raise Dish Network's profile among potential buyers and partners. The former  would presumably ad equity value if Dish would contemplate selling, the latter would encourage partners to see Dish as a more valuable partner.

With Dish, one never knows. An opportunistic company, Dish Network might be persuadable either way. And some might argue an LTE  spectrum bubble is forming, driven by would-be suppliers of spectrum originally intended for mobile satellite purposes. 

On the other hand, many say the spectrum will ultimately be needed. The issue, for some, might be how much is needed right now. 

Asia-Pacific Emerges as Largest Regional Telecom Market

Since the mid-2000s, it has been clear that the Asia-Pacific region will feature the greatest single concentration of communications customers and revenue mass of any region in the world, over the coming years.

So any supplier with ambitions to grow globally has to succeed in the Asia-Pacific region. That is a bit of a change from where growth drivers have been seen for much of the past decade.

Asia already by the mid-2000s was home to almost half the world’s fixed telephone subscribers. It had 42 percent of the world’s Internet users, and with 1.4 billion mobile cellular subscribers, it also had the largest mobile phone market share, according to the International Telecommunications Union.

By mid-2008, China and India alone had over 600 and 280 million mobile cellular subscribers, respectively, representing close to a quarter of the world’s total.

The Asia-Pacific region was the world’s largest broadband market with a 39 percent share of the world’s total at the end of 2007.

Telecoms retail revenue in the emerging Asia–Pacific (APAC) region was predicted to grow at a compound annual growth rate (CAGR) of seven percent between 2011 and 2016, according to Analysys Mason.

China and India together account for 68 percent of the region’s population, 64 percent of its active mobile SIMs and 75 percent of its total retail telecoms revenue.

Analysys Mason predicts that active mobile penetration rates in the region will rise to 95 percent by 2016, a 32 percent increase over 2011 levels. The number of active SIMs will increase from 2.33 billion in 2011 to 3.7 billion by 2016.

But it is 3G, not 4G, that will represent the bulk of mobile broadband customers. By 2016, 41 percent of active accounts in the region will be 3G, compared with just 11 percent in 2011.

Even by 2016, vendors cannot expect LTE devices to account for more than five percent of the active SIM base in the region.

Penetration will be slightly higher in China and Malaysia, at seven percent and eight percent respectively, slightly lower in India, Indonesia and Thailand (three percent), and even lower in Bangladesh and Pakistan.


And voice will be “mobile.” Some 90 percent of the voice connections will be supplied by mobile networks by 2016. Overall, the number of voice connections in the region will increase by 45 percent to 3.9 billion connections, with most of this growth coming from China and India, Analysys Mason predicts.

Average monthly revenue per user was about $7.40 in 2011. Mobile ARPU across emerging APAC markets will likely average $6.50 by 2016, the firm predicts.


Though Brazil, Russia, India, China and South Africa have been leading economic and communications adoption growth for much of the past decade, it now appears that those nations are reaching maturity, and that growth of communications services will be lead by a new list of nations in the emerging markets.

Overall, that growth–on a percentage basis–will likely be lead by countries in the Asia-Pacific region, exclusive of China and India.

Globally, emerging markets remain crucial for global telecom service provider growth. IDC predicts that emerging markets will contribute for 53 percent of 2012’s global information and communications technology growth.

And a poll of 675 global IT and business professionals suggests Indonesia, Vietnam, Qatar and Myanmar are the countries to lead that growth. But Israel, Iraq, Uganda and Cambodia were other countries also viewed as countries where growth could occur.

Notably, just five percent of respondents chose Brazil, Russia, India, China or South Africa as among the nations having the strongest growth, though the so-called BRICS nations have been at the top of global growth lists for some years.

Mobile will drive growth in the Asia-Pacific region, as elsewhere. But developing nations also will become the focus of broadband growth over the next decade or two, building on a substantial amount of growth since about 2005.



International Telecommunications Union data.

Netflix 3D Will Have ISP Implications

Netflix “Super HD” content, and new 3D content, should prove an interesting development for Internet service providers. Super HD is intended to provide a better picture quality than is currently available for streaming on 1080p HDTVs.

But Netflix also is adding 3D titles, which generally use up double the bandwidth for the same video length. That should be interesting, given average broadband speeds in U.K. markets., not to mention U.S. access markets. 

Google Launches Free Wi-Fi in Chelsea, New York

Google is offering: free public Wi-Fi in the Chelsea neighborhood of New York, which spans Gansevoort Street and 19th Street from 8th Avenue to the West Side Highway, including the Chelsea Triangle, 14th Street Park, and Gansevoort Plaza. 


Google and Boingo had earlier in the summer of 2012 collaborated to provide free Wi-Fi at some subway locations and Boingo hotspots in Manhattan. 

Some will continue to hope that Google will get into the Internet access business more fully, as an ISP, but many of us think that is highly unlikely. Google's objective is to goad all other ISPs to upgrade their access networks. 

Diverting huge amounts of capital into its own ISP facilities would be a low-value way for Google to spend its own money. 

Maintenance Now Driving Fiber to Home Conversions

Verizon has for some time been deploying optical fiber for maintenance reasons, such as when a customer has two trouble calls in any six-month period, and where optical fiber trunking already is in place. 

In some cases, an entire neighborhood might be converted to FiOS access if a sufficient number of households in an area are hitting the "two calls in six months" threshold. In 2012, Verizon converted about 200,000 households to fiber, based on that standard. 

Europe Mobile Voice Calling Minutes Declined 4.5% in 3rd Quarter 2012

In most countries around Europe, mobile voice minutes of contracted up to 4.5 percent quarter-on-quarter, in the third quarter of 2012. Similarly, text messaging was down between -0.5 percent and -7.8 percent, quarter over quarter, ABI Research says.  

Monthly average revenue for Western European service providers also continued to decline in the third quarter of 2012.

Significant regional variations can and do exist in the global telecom business, though. The largest U.S. mobile providers, for example, seem to be able, at least for the moment, to turn in predictable growth in revenue, quarter after quarter, as third quarter 2012 Verizon financial results indicate.


In Western Europe, competition is having the opposite effect, reducing revenue. In fact, argues STL Partners, mobile service provides in Spain, Italy, France, Germany and the United Kingdom stand to lose as much as 50 billion euros over the next seven or so years.

Verizon, in contrast, reported double-digit increases in operating income and earnings. Wireless segment revenue grew more than seven percent, year over year, while prepaid wireless revenue grew nearly 43 percent, year over year. Fixed network revenue in the consumer segment also grew, despite the ongoing trend of voice line abandonment.

AT&T Announces Record Smartphone Sales

AT&T says it sold more than 10 million smart phones in the fourth quarter of 2012, topping its previous record quarter of 9.4 million, set in the fourth quarter of 2011. 

This included best-ever quarterly sales of Android and Apple smart phones.

That said, the rest of world is where smart phone growth will be most extensive over the next decade. 

In part, that is because there are so many feature phones in use that can be upgraded.