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DISH merging with Sprint would be interesting. I mean, who wouldn't want Blockbuster stores to also sell satellite gear AND cell phones? It would look like a mini-Best Buy.
As TechCrunch explains, "That pre-existing deal came with a lot of visible support from both Softbank's and Sprint's top management, and came also with financial help worked in for the continued build-out of Sprint's network."
Would DISH be able to help Sprint build out a network? Now it would be 3 sets of spectrum - DISH, Clearwire, Sprint. It would be wholesale and retail. It would be Satellite TV and cellphones and videos. Did Charlie ever (successfully) do anything with Blockbuster? DISH announced that it sold the British arm of Blockbuster video last month.
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Comcast buying NBCU was a little different, but cablecos have owned channels before, especially sports channels (MSG, YES, BayNews9).
Maybe the TV-cord-cutting crowd is scaring the cablecos, despite the rhetoric to The Street. Content is expensive to license and to deliver. And getting more expensive all the time. Meanwhile more video is being delivered as bits and bytes by Netflix, Amazon, the networks (USA, Comedy Central, ABC, CBS and CW - all have shows that can only be seen on-demand from thier website) and apps (HBO-on-the-Go and TWC Anywhere, for example). This means that TV revenues WILL decline.
How does the Duopoly make up the money and pay off the $250 Billion in debt it has accumulated????
Metering is one way. It increases the ARPU.
BTW, I find it interesting how the RBOC's have basically given up on DSL.
So VZ is now partnering with the Coinstar subsidiary, Redbox, to launch a video streaming service to compete with Netflix, Amazon, and Hulu.
This means that ATT will HAVE to go after DISH. Why? The wireless spectrum primarily but also DISH owns Blockbuster, satellive TV service, and Slingbox. Telco is a me-too industry. Unless ATT is going to abandon theh consumer space, relinquish it to the cablecos, it will have to make a move soon.
While Echostar owns Hughes Communications, the DISH company bought up spectrum from DBSD and Terrestar that DISH plans on utilizing to offer a hybrid satellite/terrestrial mobile broadband service. Today, DISH has a market cap of almost $13B, while Netflix is at $7B. Since spectrum is finite and like real estate, the extra $6B seems like a steal. Consider that AT&T bought spectrum from Qualcomm for $2B. That spectrum, which, according to Huffington, "Qualcomm stands to make a handsome profit on the spectrum. It paid $38 million for one slice of nationwide spectrum - the former UHF channel 55 - in 2002, then another $558 million in 2008 for UHF channel 56 over New York, Los Angeles, Boston, Philadelphia, and San Francisco." Qualcomm was using that spectrum for FLO TV, which failed. It consists of six D-block and five E-block licenses in the Lower 700 MHz band, giving AT&T post-transaction holding between 6 and 80 megahertz of spectrum below 1 GHz. Holding is key, because, like all cellcos whining about spectrum, AT&T HAS spectrum it has not deployed.
AT&T says it needs the spectrum, especially if VZW gets the SpectrumCo deal to go through whereby VZW buys all the AWS spectrum from the cablecos. So do the Rural Cellular Carriers. Makes DISH a big target for acquisition. However, Charlie Ergan still owns 51%.
]]>"Former T-Mobile CMO Denny Post says carriers should focus on retention, rather than relentless promotions aimed at new sign-ups." Post says that it is the end of the New-to-Wireless Customer Era and that cellcos must re-think customer care.
Post continues, "It is going to become an absolute competitive scrap battle, [because] any customer is going to have to come from somewhere else."
This isn't just the cellular market. Look at broadband, landlines, cable TV, voice - all flat.
While VoIP revenues are increasing, it is because TDM revenue is decreasing. Hosted UC or Hosted PBX sales are more than voice sales, but functionality, productivity, efficiency, collaboration and one-inbox. (At least, in my humble opinion).
And while the FCC has a $4B fund to get more broadband deployed, those sales will go to the first network operator that provides it IF the price is right. Although even in rural, it is a battle between satellite, local wi-fi, dial-up, and 3G/4G data cards - which isn't exactly a slam dunk customer acquisition market. Everywhere else, it is The nice thing is that Channel churn numbers are better than direct sales. Now if the Channel could just cross-sell and upsell better....
So Charter has purchased the "cable television systems from US Cable of Coastal Texas, LP serving, in aggregate, approximately 16,000 customers in Missouri, including the communities of Hannibal, Moberly and Mexico," according to The Mexico Ledger.
TDS parent, Telephone and Data Systems, Inc. announced it will acquire OneNeck IT Services for $95 million. OneNeck, generated revenues of $37 million in 2010, will be a subsidiary of TDS Hosted & Managed Services, LLC (TDS HMS). OneNeck is a hosted application management and managed IT hosting services provider, specializing in ERP apps.
Meanwhile, DISH scoops up TerreStar Networks operations and spectrum for about $1.4B out of bankruptcy court. According to Rodrego Byerly, an M&A advisor, "The DISH deal structure accepted by Terrestar was unannounced. The balance sheet for DISH shows $2.9B in cash and marketable assets. There weren't any other bidders, so the DISH bid had to be accepted. Terrestar had approximately $1B in debt. The deal sheet doesn't have to require cash; there are other scenarios: i) Debt assumption or re-fi, which would put TerreStar's debt on DISH's balance sheet with minimal cash outlay (while also allowing creditros to exit); or ii) there could be a soon-to-be-announced capital raising event (like a PIPE or secondary offer); or iii) the deal could be written to satisfy creditors with some mix of cash andstock as the debt could be converted to DISH stock through some mechanism. Not enough details to say right now."
DISH recently purchased Hughes ($1.33B) and Blockbuster ($320M), including the stores. Some have thought that it was a smart way to enter the retail space for DISH and its various products (like Slingbox, Hughes broadband, DISH DBS TV). Byerly notes, "DISH is somewhat quietly building a broader distribution pipeline. When combined with its now more robust content and delivery channels, it's quite impressive."
TerraStar gives DISH 20 MHz of S spectrum adjacent to 20 MHz of spectrum that DISH is acquiring with its purchase of DBSD also from bankruptcy for about $1.4B. That's a nice block of spectrum - 20 × 20 - at the cost of $2.8B - is about auction value. "Both failed companies have spectrum with ATC rights, which allow them to run hybrid satellite/terrestrial IP services in satellite frequencies," according to Rethink Wireless. Other interesting pieces from that article are that this is Charlie playing chess and that Craig McCaw is in the picture.
[Please note some of this is DISH and some of this is Echostar, both controlled by Charles Engen. EchoStar is TerreStar's largest creditor.]
And then the Denver Post gets funny with an article saying DISH could now buy Sprint.
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Of course. Why shouldn't another bunch of billion dollar companies ask the federal government for money. From the Benton Foundation: "A group of satellite broadband providers -- Dish Network, EchoStar Technologies, ViaSat/Wildblue Communications and Hughes Network Systems -- told the Federal Communications Commission that they should be allowed to participate in the Connect America Fund."This is the second asset purchase for DISH as they bought DBSD North America, Inc., a hybrid satellite and terrestrial communications company, for approximately $1 billion in February.
Looks like DISH's parent company, ECHOSTAR, purchased Hughes Communications (NASDAQ: HUGH) for about $2 billion. So they may have a retail outlet for Hughes satellite "broadband".
DISH Network, Cellular South and the Rural Cellular Association (RCA) are asking the FCC to block AT&T's $1.9 billion purchase of Qualcomm's Flo TV spectrum, according to news reports.
Meanwhile today the FCC is having an open meeting on Inter-Carrier Compensation.
]]>Why AT&T will not be buying Echostar: Echostar has been on a tear buying up bankrupt assets of BDSD and Terrestar; then Move Networks; and now Hughes. It's too big to merge with Ma Bell. And Ma can't afford to wait over a year for that merger to be approved. Much better to strengthen the partnership to market cell/satellite bundles.
Minnesota postponed granting access to CenturyLink/Qwest merger.
National Broadband Map comes out tomorrow (2/17/2011)
Masergy, a network reseller specializing in MPLS, filed its IPO.
early Bird Special! ITEXPO Austin for just $99!
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Gary Kim writes that Echostar is buying Hughes Communications Inc. A majority of Hughes is owned by investment firm, Apollo Management IV, which, according to the BizJournal already approved the deal. Of course, the FCC has to approve the deal too. There are latency issues with the service (due to the physical distance the packets have to travel to the satellite and back to Earth), as well as bandwidth constriction and bandwidth caps.
Echostar-9 is being used by StarBand for service; Echostar was an investor in StarBand. Echostar provides satellite service to DISH Network, which spun off from Echostar in 2008. Echostar operates 14 satellites, with DBS licensing from the FCC.
WildBlue runs on Telesat Anik F2 satellite and was acquired by ViaSat in 2009.
Along comes Lightsquared, an upstart bankrolled by Harbinger Capital Partners, which announced it is building a new nationwide LTE network dubbed "Lightsquared" using spectrum owned SkyTerra. "Harbinger acquired SkyTerra and took it private in March, with plans to use the satellites, coupled with 36,000 earth-bound stations across the U.S. to set up a next-generation wireless network covering the entire U.S. population," according to the Washington Business Journal. Where did this spectrum come from? Well, SkyTerra used to have rights to spectrum for satellite telephony. Then it received permission from the Bush FCC to use that same spectrum for cellular telephony. Hence, the launch of LightSquared as the next 4G-LTE nationwide whoilesale cellco, which launched its first satellite to orbit this week. [Details are here].
Remember that Clearwire has 100 MHz of spectrum nationwide and has burned through close to $5B already. Plus let's not forget that VZW and ATT spend $7B and $5B respectively on CAPEX annually on their network. It isn't clear if Clearwire will survive. So what makes Harbinger think he can build out a 4G-LTE network from scratch? It costs about $400M to launch a satellite into orbit. That's not groound stations or anything. That's one single satellite. (The second one goes up in 2012 for another $400M approximately).
Apparently, investors also forget that T-Mobile is sitting on AWS and 700 MHz spectrum and is an also-ran at 4th place with 33M subs. 33M and it is in 4th place and struggling. Speaking of struggling, Sprint owned much of the spectrum that Clearwire has and still couldn't roll out the 4G network amid its own corporate psychosis. So what's a bunch of upstarts with less than 2M subs to do?
On that note let's not forget about Google's dream for the Third World called O3b.
O3b plans to launch medium earth orbit satellite service for the "other 3 billion" people who do not have broadband."O3b is financially backed by SES World Skies, Google, HSBC Principal Investments, Liberty Global, Allen and Company and Northbridge Venture Partners. By mid 2012 O3b plans to launch a constellation of 8 satellites into orbit to provide low latency Internet services to billions of users in remote areas of the world," according to Wikipedia.
Finally, we have HughesNet launching a high capacity satellite that will make consumers re-think about satellite broadband. According to a press release, "Hughes Network Systems, LLC successfully demonstrated 16 Mbps of TCP throughput and over 20 Mbps of UDP streaming throughput to a single HN9400 Ka-/Ku-band broadband satellite terminal. This allowed the terminal to support Web browsing, streaming video, voice, and video conferencing applications simultaneously. The demonstrations were conducted in Australia using broadband satellite capacity provided by IPSTAR and SES World Skies." Supposedly, this is a game changer. DSL Reports thinks it's just smoke. People forget that they are real, physical limits on spectrum and bandwidth. X amount of spectrum in the Ka or Ku range can only deliver a finite amount of bandwidth through the satellite - no matter the compression algorithm - there is a finite amount of bandwidth available. Plus that satellite feeds all subscribers at once. There are computing limits on that on top of the latency and weather issues.
Where Hughes is making a change is in the launch of its M2M service that will likely look for some revenue streams in the Smart Grid sector.
And think about this: all that spectrum being used - including TV and radio signals - at one time was public domain, sold away to private corporations for one time payments. If we really wanted to pull ourselves out of national debt, that spectrum would be taxed or in a revenue share model.
Also, by the new FCC definition of broadband (4MB x 1MB) most of the satellite and other wireless high-speed Internet Access is not broadband. Oops!
]]>Now Big Media (in this case Viacom) is yelling because the F agencies decided to approve the merger. It appears that Sirius doesn't compete with XM. Duh?
Consumers pick one or go back to old radio. Not many consumers would buy two different satellite devices. That's while the rule was that every device (satellite receiver) was supposed to be able to work with both broadcasters. -- And they did not. [Actually, according to Y! news, they did develop an inter-operable radio but no manufacturer would make it. It wouldn't be subsidized so who would buy it?
There were other rules ignored, including "You can't merge." Pish posh. Rules are for little people.
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