Mobile Carrier Report Card: Sprint, et. al Survive Hellish Quarter
February 8, 2012 3:42 PM
comment(s) - last by
Sprint posts big loss, but adds subscribers, bumps up LTE
Unless Deutsche Telekom AG's (
) T-Mobile USA pulls off a whopper of an earnings surprise later this month, Q4 2012 was a remarkably gloomy quarter for the U.S. cellphone industry.
I. Passing Grades for Sprint, Verizon -- a Mostly Bad Quarter for AT&T
Sprint Nextel Corp. (
competitors AT&T Inc. (
) and Verizon Wireless -- the joint venture between Verizon Communications Inc. (
) and Vodafone Group Plc. (
) -- in reporting its earnings for the fourth calendar quarter of last year.
The results, compared and contrasted to AT&T and Verizon can be seen below:
Sprint had a quite a decent quarter compared to its competitors. While they all lost money, it was Sprint who posted the biggest percent gain in subscribers, the carrier's biggest growth since 2005.
Overall, roughly 720,000 of the new customers (40%) were iPhone purchasers. This offered somewhat of a vindication of its
taking on deep debt obligations
to get the iPhone from Apple, Inc. (
). While Sprint came in second to Verizon in revenue gains, it posted a far smaller net loss.
As a side note, Sprint reported 1.8 million iPhones sold -- a number that surpassed analyst expectations, but matched (precisely in sig. figs.)
my estimate from last month
. Coupled with the sales
successes at Verizon and AT&T
, this emphasizes just
how victorious the iPhone 4S was
in the U.S. in Q4 -- a surge that helped the U.S. smartphone maker
Electronic, Comp., Ltd. (
) in total 2011 smartphone sales.
Sprint's iPhone is selling well and defying the skeptics. [Image Source: Sprint]
However, there were some extenuating circumstances that contributed to its competitors' misfortune and may be making Sprint outlook look slightly rosier than it really was.
First, Verizon took a large pension charge and another one-time charge, which in turn plunged it into a relatively large lost. Likewise, AT&T's larger loss comes from the
$4B USD it wrote off
T-Mobile deal collapsed
. The loss covers some of the billions in cash and spectrum that AT&T owes T-Mobile under the negotiated terms of the failed deal. While it's unwise to say that AT&T and Verizon will be immune to future large losses, it's fair to say that their balance sheet looked worse than it really was.
And overall, it's important to keep in mind that all the carriers posted large losses in the quarter.
II. Sprint Charges Ahead With LTE
In related news Sprint showed that its wisely taking the necessary steps to build up an LTE (4G) network to stay competitive with AT&T and Verizon. Sprint initially had backed the WiMAX standard, a rival 4G specification that now looks to be going the way of the dinosaur.
two new cities for the program -- Baltimore, Mary. and Kansas City, Kans./Miss. The network had previously announced that Dallas, Houston, and San Antonio, Texas along with Atlanta, Georgia would be the first cities to receive LTE. Now it looks like a six-city rollout is planned for "mid-2012".
Despite the loss of a potential
$15B USD payday
from LightSquared -- who now is facing ethics investigations
over campaign contributions to President Obama
-- Sprint is still hoping to scrape together enough cash to hoist a decent LTE network mid-year.
It announced a trio of devices that would be on the network -- the
popular Samsung Galaxy Nexus
(also on Verizon) and the new LG Viper LTE from LG Electronics Inc. (
The Galaxy Nexus [Image Source: Samsung]
The Viper is a new handset 4.0-inch all-touch Android 4.0 Ice Cream Sandwich handset that features a 1.2 GHz dual-core processor, but otherwise ho-hum specs.
The LG Viper LTE [Image Source: DroidMatters]
Sprint will also be offering a tri-capable hotspot from Sierra Wireless, Inc. (
) that's capable of handling 3G, "4G" (Sprint's name for WiMAX), and "4G LTE".
Company Senior Vice President Bob Azzi cheers the coming offerings, stating, "Sprint is investing in its CDMA network and delivering on our commitment to ensure customers experience superior wireless voice and data service at an unbeatable value."
III. T-Mobile's German Owner Plans to Beef Up Carrier for Survival Bid
With an estimated $3B USD in (almost) free cash in pocket from AT&T, and additional $1B USD worth of spectrum and roaming privileges also in hand, Deutsche Telekom -- the parent of T-Mobile USA -- is starting to think that its U.S. property may be capable of independent survival, after all.
The carrier is reportedly is planning a major (in the billions) sale of debt (bonds) to fund T-Mobile's growth and network expansion.
Currently T-Mobile is in distant fourth, although the exact numbers won't be known until 2/20/2012, when T-Mobile USA gives its earnings guidance. The carrier previously had an estimated 33.8m subscribers -- roughly 40 percent less than Sprint, and only (appr.) a third of the subscribers of Verizon/AT&T, each.
T-Mobile is luring some customers in
offering free "4G" phones
, but the offer is deceptive as
you're getting an outdated HSPA+ device
. T-Mobile thus far is the only major U.S. carrier not to have announced plans for (or deployed) LTE -- true "4G".
This article is over a month old, voting and posting comments is disabled
RE: Such a waste
2/10/2012 2:27:11 PM
It's not clear to me that this is actually a reasonable claim.
(a) We (pretty much the whole world) have FINALLY agreed upon a single standard for wireless. WiBro is struggling on in South Korea but looks doomed; LTE-TDD (China) is basically a minor variant on LTE-FDD (most of the rest of the world); and while frequencies aren't harmonized, adapting the rest of the LTE stack to a new frequency is fairly minor work.
So point is --- intellectual effort is not being wasted.
(b) Most people in the US live in big cities; and most people in the US feel that their cell services are under-provisioned. So it's not like excess, unused capacity is being rolled out.
So the question is --- is it "inefficient" to have 4 companies create a collection of towers, rather than have one company create a collection of 4x as many towers? It's not at all clear to me that it is.
There are obviously a few efficiencies that come from a single unified system, with the ability to smooth out areas of excess service and areas of deficient service but these are fewer than you might expect because the primary issue is possible locations for cell towers given all the various constraints (people who don't want a tower nearby, visual issues, safety issues, protection from the elements or hooligans, etc etc). And against these we have the fact that (limited as it is) there is SOME competition between the carriers, and some incentive for each to work harder.
One of the current buzzwords in the cell space is SON --- self-organized-network. This is not something seen at the user level; it is a set of ideas and standards that exist in the specifications for new tower and telco equipment; and these get updated (just like the user specs) with each new release of LTE (and 3GPP) specs --- release 10, release 11, release 12, they just keep on coming.
The first of these SON specs specified pretty low-level stuff (some of which seemed so obvious you have to wonder what these people were thinking before-hand, like "automatic software updates" [these are software updates to tower equipment, not phone]). But the specs are getting more ambitious in terms of information that is transferred between towers about load, users near the cell edge, etc; and the goal --- to be realized in a few years --- is to allow cells to co-ordinate much more aggressively so as to spill overload from one cell to a nearby less loaded cell, or alternatively for two cells to combine signals to deliver a single better signal to a user at the edge between them.
The point is
(a) I see no evidence that competition in this particular case is bad. (And this comes from someone who would never vote Republican and would probably be considered a socialist by most Americans).
(b) Regardless of how greedy and dumb the telco execs are, the underlying engineering is getting better all the time. And this better engineering does make it out from ideas into equipment into the field. It just takes time, and we are at that unfortunate period that some technologies go through where growth has just been so explosive that everybody's experience is pretty irritating.
"This is about the Internet. Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis
T-Mobile Offers Free 4G Phones After MIR This Weekend
February 8, 2012, 10:01 AM
Apple Beat Android-Leader Samsung in 2011 Global Smartphone Sales
February 2, 2012, 7:23 PM
IPhone Crushes Android in U.S. Q4, Outsells Android 4-to-1 on AT&T
January 26, 2012, 3:09 PM
Apple's iPhone Outsells All Android Phones Combined at Verizon
January 24, 2012, 4:18 PM
Bribes and LTE: the Bizarre Case of LightSquared, Obama, and the USAF
January 24, 2012, 1:25 PM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Leak: Apple Preps for First Real Android App Foray With New Apple Music App
October 24, 2015, 1:59 PM
Pepsi Smartphone? Empty Calories Coming Soon to the Midrange
October 12, 2015, 11:41 PM
Most Popular Articles
Free Windows 10 offer ends July 29th, 2016: 10 Reasons to Upgrade Immediately
July 22, 2016, 9:19 PM
Smart Security Cameras: 5 Good Choices For Any Budget
July 25, 2016, 7:13 PM
2017 Porsche Panamera: I’ll Take Three of These.
July 24, 2016, 6:44 PM
Top 5 Smart Watches
July 21, 2016, 11:48 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information