IN THIS ISSUE T-Mobile embarks on LTE expansion using the breakup fee cash and spectrum acquired from AT&T AT&T mulls third-party billing for data LightSquared faces exponential problems Bankruptcy concerns raised for Sprint ETI at glance About ETI Practice Areas Experts Work Product Contact ETI @econtech.com Download ETI Reports View Live Video of ETI Testimony Views and News Archive Subscribe Please send me ETI Views and News Subscribe here. March 2012 In this edition of Views and News, we look at T-Mobile's plans to upgrade its network to LTE, and how the overall rush to LTE as a standard has put Sprint in financial jeopardy. We also examine AT&T's plan to implement third party billing for wireless data services, and LightSquared's struggle to facilitate nationwide, wholesale competition with the big four. Read on below, or navigate over to econtech.com where you can read online, or download a printer-friendly version. Follow us on Twitter @EconAndTech T-Mobile embarks on LTE expansion using the breakup fee cash and spectrum acquired from AT&T T-Mobile has announced plans to invest $4-billion to modernize its network and begin to migrate its HSPA+ network to 4G LTE. These plans come as no surprise given that AT&T was forced to pay T-Mobile a breakup fee of $3-billion in cash plus critical spectrum at the end of 2011. T-Mobile will need to "shuffle" its spectrum – moving 3G services onto older wavelengths to free up the newer and "better" AWS spectrum for 4G, and can only complete this reallocation with the spectrum that AT&T had to give up. These plans will be contingent on obtaining FCC approval to transfer the AT&T spectrum to T-Mobile... Continue reading at econtech.com AT&T mulls third-party billing for data Just as – or perhaps because – the proliferation of mobile apps has expanded to the point where wireless carrier networks are experiencing demand levels that stretch their available capacity, the carriers are withdrawing their unlimited data plans and replacing them with relatively low "usage caps" above which often substantial "overage charges" will be imposed (see Views and News, February 2012). Most consumer-oriented wireline Internet access services in the US offer unlimited usage for a flat monthly charge or, if a usage cap is imposed, it is set at a level sufficiently high that only a minuscule fraction of consumers would ever exceed it. Consumers have thus come to view their use of the Internet as "free" in that their total monthly payment is unaffected by the volume of usage they make of the Internet access service. The potential of some sort of pay-as-you-go Internet access pricing confronts consumers with the prospect of having to pay their wireless carrier for their use of specific websites or apps, a condition that could well chill consumer demand for such services. From the standpoint of e-commerce providers or other websites that generate revenue from user access to their services, the practice of metering and charging based upon bits sent and received could undermine their business models and cost them revenues and profits... Continue reading at econtech.com LightSquared faces exponential problems Sprint has just announced that it has terminated an agreement with wireless upstart LightSquared, and returned $65-million in pre-payments associated with the agreement. Last year, Sprint and LightSquared reached a "spectrum hosting" deal wherein Sprint would provide the physical network facilities–towers, antennas, switches–necessary to operate a 4G wireless network on LightSquared's spectrum. The deal, covering 15 years and worth billions, allowed Sprint an out if LightSquared could not obtain the necessary regulatory approvals to launch its network, which hopes to combine traditional cellular service with satellites to provide more complete coverage. The FCC has repeatedly held up LightSquared's progress over concerns that LightSquared's spectrum use interferes with GPS services... Continue reading at econtech.com Bankruptcy concerns raised for Sprint Shares of Sprint Nextel stock fell more than 4% after analyst group Bernstein Research raised the specter of a future bankruptcy filing from Sprint. While not making an official prediction of bankruptcy, the downgrade noted that such an outcome was a "very legitimate risk". Sprint's financial situation has deteriorated over several years as the company failed to capitalize on potential synergies from its merger with rival Nextel and massive customer defections arising largely from the botched transition. The company hasn't earned a profit in more than four years, although cash on hand has increased in the last two years. The renewed concerns over Sprint's fiscal health arise largely from the enormous take or pay contract with Apple that allowed Sprint to begin carrying the iPhone. While current sales of iPhones have helped Sprint stave off some of its subscriber losses, it seems more and more likely that the summer/fall release of the next iPhone will be an LTE capable device. While Verizon and AT&T have already rolled out LTE, and T-Mobile has obtained the necessary cash and spectrum to do so, Sprint's path to LTE from its WiMax 4G debacle seems much less clear or certain. Sprint lacks both the cash and spectrum to make such a transition... 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