Adam Bender

Motorola shares plummeted 18.75 percent in regular trading Wednesday after the device maker said it expects demand for its handsets to keep slowing in 2008. Falling cellphone market share sank Motorola net earnings for Q4 $423 million year-over-year to $100 million, the handset maker said Wednesday. “2008 will be a challenging year and the recovery of mobile devices will take longer than previously expected,” said CEO Greg Brown in a Q4 results call. “We are taking on these challenges with both a sense of determination and urgency.”

Wireless needs to be as open as the Internet if that industry wants to be as “vibrant” as consumer electronics, FCC Commissioner Michael Copps said. He spoke Tuesday on a New America Foundation panel. Consumers have a “fantastic world of choice” on personal computers, but not on cellphones, he said. Carrier arguments against open access regulation are no good, he said. Past carrier claims that networks could be hurt by third-party devices were the “same arguments” wireline raised 40 years ago amid the Carterfone brouhaha, he said. Meanwhile, industry-designed open platforms promoted in press releases must be observed by the FCC, he said.

Sprint Nextel will lay off thousands and close 8 percent of its retail locations as it braces for continuing downward subscriber trends, revenue and profitability this year, it said Friday, releasing preliminary Q4 2007 subscriber results. Investors didn’t react well; Sprint’s stock nosedived $2.87 to $8.70, a 24.8 percent drop, in regular trading Friday. Since last January, it has fallen about $9. That could herald a buyout, analysts said.

Frontline’s exit doesn’t mean the end of open access -- only that Reed Hundt’s company failed to sell it to investors, VoIP blogger and Comunicano CEO Andy Abramson said in an interview. The “idea is too good” for someone not to step in, he said. Towerstream and other upstarts recognize “there is money to be made” and are strong contenders, he said. Open-access advocate Google will also be bidding to win in the auction, Abramson predicted. The search company owns fiber and wants to “make good of it,” he said. The tech industry wants an open wireless platform, Abramson said. Smaller device and software developers have had “limited access” to wireless, he said, and carriers’ tight control of networks has “stifled development.” Developers are interested in wireless but there are “too many impediments,” he said. Open access would “encourage new ideas.” Abramson isn’t making bets on whether Verizon’s Any Device, Any Apps effort will be the open platform developers that want, he said. “Verizon will do what it wants to do.” The “new guard” at Verizon probably pitched the idea to help the company keep up with Google, he said. But the “old guard runs the show.” Uncertainty surrounds the auction, Abramson said. His suggestion: “wait and hope it doesn’t turn into another 3G fiasco.”

New ad technology that sends videos from billboards to cellphones using Bluetooth is attracting advertisers struggling to reach consumers with traditional media, outdoor advertising officials said in interviews. Quikker, the technology’s main manufacturer, has partnerships with Clear Channel and other major advertisers and expects the interactive ads to become common in major cities this year. The way ads are sent raises spam and privacy fears, but the concerns won’t arise if consumers can’t figure out how to set up Bluetooth, analysts said.

The FCC can’t “regulate according to the speed of convergence,” said Ericsson’s Torbjoern Nilsson in an interview this week. Nilsson, an adviser to the CEO, also outlined hopes and concerns for the 700 MHz auction and talked about existing and upcoming cellphone technology. Later, he spoke to a House of Sweden conference on Swedish innovation.

Sirius would “love” to go to court if the Justice Department wants to stop a merger with XM, CEO Mel Karmazin told the Citi conference in Phoenix late Tuesday. Sirius would prefer DoJ to approve the combination, but anything beats inaction, Karmazin said. “At least [we would] have our day in court.” Sirius has given “well over 6 million pieces of paper” to regulators, everything they could need to decide on the merger, he said. The companies plan to close the deal the evening it gets DoJ and FCC approvals, he said. When that will happen is unclear. “I have no idea,” Karmazin said. Combining with XM would bring “hundreds of millions of dollars” in annual efficiencies, according to a study that Sirius paid for. The amount surprised Karmazin when he heard it, he said, but he has “no reason to doubt it.” If approval doesn’t come, it will be “business as usual,” since in the wake of the February merger announcement Karmazin has been running Sirius as if nothing was going to happen, he said. Raising prices is “the last thing we would want to do,” he said. Terrestrial radio is satellite radio’s main rival and competing with it requires low prices, he said. A merger would make reducing prices easier, he added.

Leap Wireless may be open to roaming agreements or other deals, but FCC anti-collusion rules for the 700 MHz auction mean Leap can’t talk with MetroPCS or other carriers about it, Leap CEO Doug Hutcheson told the Citi Conference in Phoenix. Leap would consider any way to gain scale, and news about that effort will “follow at an appropriate time,” he said. In a separate Q-and-A session, MetroPCS CEO Roger Linquist said his company hasn’t “reached any agreement” with Leap Wireless or other carriers. The quiet period means MetroPCS can’t talk about it, but “no, we haven’t had progress,” he said. MetroPCS is “over” Leap, he added. “We took our shot, and I think most of you know what the story is.” MetroPCS’s priority is to expand into AWS markets, he said. The carrier is “really happy with what we're seeing” in the Los Angeles market launched last summer, said Chief Financial Officer Braxton Carter. Sprint Nextel’s Boost Mobile helped raise awareness of prepaid in Los Angeles, but MetroPCS steadily is taking market share, Linquist said. Leap plans a 2008 rollout of Auction 66 markets, Hutcheson said. It’s also adding 600 cellsites in mature markets that haven’t seen much investment since launch, he said. At 2007’s end, half were up and ready, he said. Leap said this week that in Q4 it added 152,000 subscribers, net, down from a year earlier but better than in Q3. Earlier this week, Leap gave preliminary net subscriber adds for Q4 2007. The growth beat analyst and company predictions, Stanford Group said. Low churn of 4.2 percent helped the results, it said. They beat expectations because “late in the holiday season and after, we saw a pretty large surge in reactivation” by old customers, Hutcheson said. More than 60 percent use Leap as their only phone service, but churn is aggravated by geography and customer finances, said Hutcheson. Leap “is not everywhere” and people often move out of its region, he said. Exacerbating that is the fact many Leap customers are young, he said. “When you're younger, you certainly move around more.” Churn is also high because many Leap customers have tight budgets, he said. Linquist answered a similar question during the MetroPCS Q&A. Churn doesn’t account for reconnects by old customers, he said. Unlike postpaid carriers, prepaid providers often see former customers return, he said.

A slew of Xohm partnerships announced Tuesday mean Sprint Nextel is still seriously pursuing WiMAX, analysts told Communications Daily. The deals also shed light on what the wireless broadband service will look like when it starts commercially this year. Sprint announced eight Xohm partnerships Tuesday. For its Xohm customer portal, Sprint signed Amdocs, SwapDrive, eTelecare and McAfee. To add WiMAX-embedded devices to its product list, Sprint is teaming with OQO, ASUSTek and Zyxel. Sprint named ad agency Soho Square to promote the North American Xohm launch. Financial terms aren’t being disclosed, a Sprint spokeswoman said.

A declining economy is hurting AT&T’s consumer business, but IPTV and broadband should spur growth, AT&T CEO Randall Stephenson said at the Citi Conference, webcast from Phoenix. It’s a “big unknown” how the economy will affect the corporate market, he said. There may not be a “radical effect” since AT&T is shifting the business to a lower cost Internet Protocol infrastructure, he said. AT&T’s move to IP has been the enterprise business’ “primary driver,” he said, predicting continued revenue growth each quarter this year. Despite the economy, Stephenson expects AT&T revenue to keep growing. “The whole [AT&T] revenue story begins with wireless,” Stephenson said, citing the iPhone. “There is a lot of runway left in terms of penetration.” Revenue per user should also grow, fueled by increasing data revenue and accelerated switches to 3G and smartphones, he said. AT&T expects to finish its wireless 3G network this year, he said. AT&T will move to 4G Long Term Evolution technology “as quickly as we can, but that’s not going to happen tomorrow,” he said, noting that AT&T must wait for standards and LTE technology. Much of AT&T’s future wireless penetration will come from prepaid services, a “growing market,” Stephenson said. There is “still a lot of postpaid room, but as you move on it will be more and more prepaid,” he said. Meanwhile, “wireless, not cable” is the main threat to AT&T access lines, Stephenson said. Wireless broadband and video is where the industry is heading, he said. More AT&T integration along those lines is “coming,” he said. IPTV will spur AT&T growth in the next three years, Stephenson said. AT&T is unlikely to significantly change prices to increase its video market share in 2008, he said. AT&T is winning 10 percent of the market just by being an alternative, he said. The next 10 percent will come from “some serious marketing,” which needn’t involve price reductions, he said. AT&T is focusing on “enhancing feature functionality” and “getting more bandwidth into the home,” he said. AT&T wants to sell video to customers inside its U- verse IPTV service areas and out, Stephenson said. “You'll always see us have a TV product,” he said. Dish Network is meeting AT&T’s need “very well,” he said. AT&T is planning more assertive triple play bundles of wireless, broadband and IPTV in the U-verse region. Out of region, “we'll see,” he said. AT&T hasn’t “scratched the surface” on reducing costs, Stephenson said. AT&T plans to consolidate help desks and call centers across its divisions, he said. Stephenson doesn’t seek to sell businesses: AT&T has “yet to have found a benefit for selling off rural access lines,” he said. Stephenson also disagreed that AT&T should sell the YellowPages business. The directory business is “close to our core” and “represents a very unique distribution channel,” he said.