Bandwidth Matters: Sprint LTE Gets 6-8 Mbps at 1.9 GHz, 50-60 Mbps on 2.5 GHz Spectrum

Sprint expects to have Long Term Evolution 4G network coverage of about 100 million pops, using the 2.5-GHz former Clearwire spectrum (120 MHz in most major U.S. markets) by the end of 2014. That probabnly is less coverage than some observers had expected. 

But Sprint ought to be able to dramatically increase its LTE top speeds, once it activates the former Clearwire spectrum. 

In the 1.9 Ghz band, Sprint says it is seeing LTE provide 6 Mbps to 8 Mbps on a consistent basis. 

In areas where LTE now is avaialble on the 2.5 GHz band, Sprint is seeing 50 Mbps to 60 Mbps peak speeds. The difference is simply that Sprint can use bigger channels on the 2.5-GHz spectrum.

Parenthetically, Sprint majority owner SoftBank saw its revenue jump 44 percent in the most-recent quarter, suggesting SoftBank will have capital to fuel an expected Sprint assault in the U.S. market. 

Sprint Makes Progress in 3Q 2013

Sprint hasn't yet turned the corner on subscriber growth, largely, one might argue, because of lingering losses from its former Nextel business, but Sprint has managed to keep growing revenue, in its key postpaid "Sprint" business, for 13 or so quarters. 

In fact, a rational person might conclude that Nextel was the problem all along, as the Sprint side of the business has not fared badly. 

In most recent quarters, Sprint has added net customers even as Nextel has bled them.

The biggest single hit came in July 2013, when Sprint shut down the entire Nextel network, losing about 1.3 million customers. Still, going forward, Sprint without the drag of Nextel should surprise to the upside in the subscriber growth area. 

Granted, Sprint still is losing customers overall, and still lost money in the third quarter of 2013. But it is making progress, and has yet to unveil precisely what it plans to do with the now-consolidated Clearwire spectrum and SoftBank assets. 

Sprint Might Have an Opportunty with its Clearwire Spectrum

Sprint owns the most spectrum of any mobile service provider in the U.S. market, a fact most observers expect will play a role in an anticipated Sprint assault on the U.S. market leaders. 

Some observers, though, will note there are advantages and disadvantages for the 2.5-GHz Clearwire spectrum.

The higher frequency means signal reach is less than at 700 MHz and 800 MHz frequencies that Verizon Wireless and AT&T Wireless have in greater abundance. Signals at 2.5 GHz do not penetrate walls as well as the lower frequencies, either.

In terms of network infrastructure, that lessened propagation distance means Sprint needs 13 to 15 tower sites, at 2.5 GHz, to cover the same area as a single 700-MHz macrocell.

On the other hand, precisely because of the higher frequency, 2.5-GHz signals are capable of delivering more data, compared to 700 MHz or 800 MHz signals, using any particular coding technique. As a rough rule of thumb, 2.5-GHz networks, using the same coding, can deliver as much as three times to four times more data, using the same bandwidth as a 700-MHz or 800-MHz signal. 

But there are some new variables, including the tendency for users to consume as much as 80 percent of their smart phone or tablet data at home, when they are able to use fixed network Wi-Fi. 

Also, in some cases, as in dense urban environments, it might be quite feasible to use small cells or Wi-Fi to offload even much out of home data consumption. 

So except in rural areas where signal reach is a real advantage, Sprint might find its high-bandwidth network very useful in urban areas, which increasingly are seeing scenarios where small cells covering small distances are quite useful. 

At least in principle, Sprint might be able to use its trove of spectrum to provide the "fastest" service in many areas, if not perhaps ubiquitously across the country. The reason is simple: Long Term Evolution is limited principally by the amount of bandwidth allocated for it. 

Channels of 20 MHz provide much faster experiences than channels of 10 MHz, for example. 

SoftBank might also be able to bundle applications (especially video-related apps) with its faster access in ways that create uniqueness, much as Dish Network is expected to emphasize video entertainment as a distinguishing feature of its would-be LTE network as well. 

NFC Will "Never" Lead U.S. Mobile Payments?

Virtually every banking-related or payments-related initiative in the United States has to begin with an understanding of how the U.S. market is different from others. The high use of credit cards, compared to most other markets, is one such distinction.

The ubiquity of the banking infrastructure is another example. The way consumers pay for retail purchases is another key underpinning realities.

Put simply, mobile banking is shaped by the fact that "access to banks" is not generally a problem. Nor, generally speaking, is "paying for retail purchases." So many would note one requirement for retail mobile payments success is adding new value to a process that is not fundamentally broken.

Likewise, as ecosystem participants scramble to gain influence and control over the new processes, communication methods are seen as a way of gaining such influence. Some observers have confidence in near field communications, while others think other approaches might win the day. 

You can count Forrester Research senior analyst Denee Carrington as among those who are skeptical about NFC. Carrington says she does not expect NFC to ever takeover the mobile wallet space.

NFC might well be crucial for other retail applications and experiences, though. 

Tom Wheeler Confirmed by U.S. Senate as New FCC Chairman

Tom Wheeler has been confirmed by a vote of the U.S. Senate as the new chairman of the Federal Communications Commission. Some might complain about an FCC chairman who has in the past lead the major trade associations for cable TV and mobile communications.

Others will say that probably is a combination of experiences that might prove exceptional useful as U.S. communications policy adapts itself for an IP-based communications environment that transcends historic regulatory boundaries, faces new forms of competition and calls for major investments in next generation infrastructure.

4 or 3: the Most Important Number in the Mobile Business

The most important numbers in the global mobile service provider business are "three" and "four." The reason is that national communication regulators generally have held that four contestants is the minimum necessary to provide the benefits of competition for consumers. 

But in most markets, over the next half decade, there is likely to be significant consolidation in the mobile business, with many markets moving from four providers to three suppliers. That will be a serious issue for most regulators.

Hutchison Whampoa Limited, for example, wants to buyTelefonica's 02 Ireland unit.

The acquisition would quadruple the market share of Hutchison's subsidiary, 3 Ireland, to 37.5 percent, behind market leader Vodafone.

The European Commission already has said it is concerned about a reduction of competition in Ireland, as the deal will cut the number of mobile phone operators from four to three. That was an issue Hutchison faced in its acquisition of Orange Austria in 2013 as well. 

Whether four competitors actually works "better" for consumers than three competitors remains to be seen. There are any number of inputs that collectively represent better consumer outcomes. 

Lower prices, innovative services and devices, higher speeds, more and better applications, many ways to buy and use, and more robust service all are parts of the value competition is supposed to deliver. 

You might instinctively argue that four competitors leads to lower prices, and that likely is generally true, at least in the short term. What is less certain is the longevity of such price benefits, over the long term, if the smaller contestants cannot stay in business. 

And that's the long term issue: capital intensive businesses might require high levels of investment on a continuous basis that a small competitor, competing on price, simply cannot afford to make. In that case, consumer benefit is less than it might otherwise be. 

Many observers might point to the inter-modal competition between cable TV operators and telcos as an example of significant competition and consumer benefits even when there are only two providers in a capital-intensive business. 

Others might counter that the history of intra-modal competition with just two providers, in the mobile business, suggests clearly sub-optimal benefits for consumers.

So the key question is how widely regulators and anti-trust officials will conclude that reasonable and effective levels of competition can be promoted if a mobile market is lead by three providers, instead of four.

Intel Media Preparing to End Effort to Create Sreaming Service?

Intel Media has been trying to build a Web-based subscription TV service for several years, and originally had promised to launch late in 2013. But Intel seems not to have gotten traction with the content suppliers it would need to build a service analogous to cable TV. 

Intel recently had said it was looking for partners, including Samsung, Amazon, Liberty Media, and Netflix, but a report suggests Intel Media has failed at that effort as well, and is exploring a sale of its assets to Verizon Communications, which already owns part of the Redbox Instant streaming service operated as a joint venture with Redbox.

Qualcomm earlier had launched a mobile video service called MediaFLO, but wound up closing the service and then selling the spectrum to AT&T after abandoning the effort. 

MediaFLO did better than Intel, at least in terms of securing content rights. In the U.S. market, for example, MediaFLO offered a set of 14 basic channels:

• 2.FLO (6 am to 10 pm) — Original made-for-mobile reports and concerts
• Adult Swim (10 pm to 6 am)
• ABC Mobile
• CBS Mobile
• CNBC
• Comedy Central
• ESPN Mobile TV
• Fox Mobile
• Fox News Channel
• MTV Mobile
• MSNBC
• NBC 2Go — A mix of MSNBC, NBC, CNBC, and Bravo networks
• Disney Channel
• Nickelodeon

None of these failures is going to stop other entities from trying to create new streaming services. Sooner or later, a bigger crack than Netflix will appear in the dam. 

Aereo, the local TV streaming service, launching in Denver on November 4, 2013, already serves nine U.S. markets. Another firm, FilmON, previously "Aerokiller," operates in Western U.S. states, primarily. 

And Amazon, Apple and Google already offer video streaming content, if not perhaps on the scale of Netflix. And there is talk that Comcast might itself launch its own branded streaming service as well. 

So far, no provider has been able to convince a critical mass of content owners to make their shows available to streaming services on the same basis as presently offered to cable TV, satellite TV and telco TV providers. 

And that is to say nothing of new licensing models that might allow customized, individualized or a la carte purchase of single episodes, whole series or single channels. 

Sooner or later, it will happen, though most assume it will take some time to reach that point. 

It will likely take far greater disruption of the economics of today's subscription video revenues before content owners will be willing to start making changes that enable truly competitive streaming services. We aren't quite there, yet.