For the Week Ending October 8, 2010 This Week’s Stories______ Unable To Find A Better Exit, Qualcomm Cancels Consumer-Direct FLO TV LightSquared Obtains More Financing, October 4, 2010 Reports Strong Interest in Wholesale Qualcomm is shutting down its struggling direct-to- Model consumer FLO TV operations, paidContent has learned. October 3, 2010 According to sources familiar with the situation, the staff was informed late last week by Bill Stone, president of LightSquared, the wholesale-only integrated wireless MediaFlo and FLO TV, that the mobile TV service will wind down by the end of the year. The company is in broadband and satellite network owned by Harbinger discussions with AT&T and Verizon about the future of its Capital, announced it has secured $850 million in debt, white-label wholesale service, which continues for now representing the initial round of a syndicated secured and includes the majority of its TV customers. credit facility arranged and led by UBS AG. Qualcomm CEO Paul Jacobs acknowledged the LightSquared said it will use the proceeds of the four-year consumer service’s problems earlier this summer and credit facility to build its LTE wholesale network, which suggested the company might be better off focusing on faces an accelerated time schedule thanks to Harbinger's using its spectrum and network to distribute other content. deal with the FCC to use its terrestrial and satellite spectrum. This shift places the emphasis on leasing the network, not programming for it. With this $850 million, LightSquared said it has now I reached out to several Qualcomm executives late obtained an aggregate of more than $2 billion in equity Sunday and again this morning for comment but have not and debt proceeds and commitments. Analysts, however, yet heard back. have estimated the cost of the network to reach $5 billion. Jacobs told paidContent in June that Qualcomm has LightSquared also said it has signed its initial wholesale always planned to sell or spin off MediaFlo but insisted agreements and is in advanced talks with several potential then that a shutdown wasn’t in the plans. In July, Jacobs customers. Because of the strong demand for capacity on told investors Qualcomm was exploring options. This its wholesale network, LightSquared said it plans to move may make it easier to manage a sale or spin of the accelerate the implementation of Phase 2 of the Inmarsat remaining part of FLO TV. Cooperation Agreement in the fourth quarter. This will give LightSquared increased access to spectrum controlled by Inmarsat, the company said. Jacobs also insisted then that if the service can’t succeed, it won’t be a total loss. “The spectrum itself is worth almost $2 billion based on the latest spectrum auction.” LightSquared has said its wholesale LTE network will allow for terrestrial-only, satellite-only or integrated satellite-terrestrial services (via the terrestrial and MSS That may be comforting when it comes to dollars overall spectrum Harbinger scored through a merger in March but it doesn’t make FLO TV less of a failure or MediaFlo with satellite operator SkyTerra). LightSquared is planning so far less disappointing. Founded in 2004, the costly initial LTE trials in Baltimore, Denver, Las Vegas and mobile TV venture attracted Verizon and AT&T as Phoenix, with commercial launches planned by the third distribution partners but has been hampered by limited quarter of 2011. The company, which has access to 59 availability on devices and an inability to achieve full MHz of spectrum, has said its network will consist of distribution. It launched direct-to-consumer FLO TV in around 40,000 cellular base stations covering 92 percent 2008 but the marketing message was muddy and of the U.S. population by 2015. consumers weren’t as interested as the company thought in acquiring a separate device and paying a subscription for mobile TV. The company inked a $7 billion contract with Nokia Siemens Networks in July to design and build the network, and analysts have speculated that NSN might provide Access to content wasn’t the issue: FLO has the major LightSquared with vendor financing to defray the cost of broadcast nets, CNN, ESPN, Discovery and more. But building the network. Jacobs said the company misjudged interest in episodic viewing compared to snacking on video content. The http://www.fiercebroadbandwireless.com possible exception to interest in long-form mobile viewing, he said: live sports. FLO expanded to other devices, including DVD players and a version for cars. But competition also expanded with mobile VOD subscription services like Netflix and Hulu KS&R Inc. 1 For the Week Ending October 8, 2010 Plus, and access to substantial video on the iPhone, iPad, Sprint, AT&T, Verizon Launch Centers to Android and RIM. Promote M2M October 8, 2010 The FLO TV store is offline but I saw devices for sale Sunday in Best Buy. I’m told Qualcomm is working out the details now to compensate current customers. A trio of U.S. wireless operators unveiled details on their investments in the growing machine-to-machine category. At this week's CTIA Enterprise & Applications conference http://paidcontent.org here, Sprint, Verizon and AT&T each offered a peak into their respective M2M centers, where they can collaborate, WSJ: Verizon iPhone Coming in Early test and work with clients on M2M projects. 2011 October 6, 2010 First up, Sprint announced that its M2M Collaboration Center will open this month in Burlingame, Calif. The facility, which Sprint refers to as a workshop, will let According to the Wall Street Journal, Apple is making an customers work side-by-side with experts to make their iPhone for Verizon Wireless' network that will be available M2M projects viable. in early 2011, a move that will end the exclusive iPhone relationship AT&T Mobility has had with Apple since 2007. The article, which quotes anonymous sources close to the In an interview with FierceWireless, Danny Bowman, matter, said the new Verizon iPhone will be available in president of Sprint's integrated solutions group, said the the first quarter of 2011 and that Apple will start mass company envisions the center as a place where customers producing the device by year-end. can test their modules in different environments and figure out what ingredients will make the right fit for their solution. Also, Sprint said that in 2011 it will provide businesses At a press conference at the CTIA Wireless Enterprise and with access to the Sprint Command Center so they can Applications conference in San Francisco, Verizon manage their M2M devices. Communications COO Lowell McAdam said he had not read the Journal article and would not comment on whether Verizon will sell the iPhone. Separately, AT&T announced plans to work with Alcatel- Lucent, Amdocs and Ericsson on innovation centers that will be located in Palo Alto, Calif.; Plano, Texas; and Last month, Verizon Communications CEO Ivan Ra'anana, near Tel Aviv, Israel. The innovation centers will Seidenberg, speaking at a Goldman Sachs give developers the chance to collaborate with AT&T and Communacopia XIX Conference, also deflected questions its suppliers. The centers will work on various projects but about a Verizon iPhone, noting that although Verizon will largely focus on key areas including connected health, Wireless would love to have Apple's iPhone, the carrier machine-to-machine applications and application was more excited about the wide array of LTE devices it development. Peter Hill will lead AT&T's innovation center will debut as it builds out its next-generation network. He initiative as vice president of ecosystems and innovation. added, "We would love to carry it [the iPhone] when we get there, but we have to earn it." Finally, Verizon announced that its Machine-to-Machine Management Center will launch later this month. The The WSJ article is the latest in a string of reports citing center--which was developed by NPhase, the joint venture anonymous sources indicating Apple is making a CDMA of Verizon and Qualcomm announced in 2009--will offer iPhone for Verizon. In August, TechCrunch reported Apple an integrated dashboard that will allow customers to ordered millions of Qualcomm CDMA chipsets for a manage network connections and devices and oversee Verizon iPhone, due out in January. A similar report from other aspects of M2M connectivity. Verizon said the center Bloomberg pegged a Verizon iPhone to launch in January is intended to simplify the M2M process and provide reliable results to customers. The WSJ article also said Apple is working on a fifth- generation iPhone with a different form factor. It was http://www.fiercewireless.com unclear how soon that version would be available to Verizon or other carriers. http://www.fiercewireless.com KS&R Inc. 2 For the Week Ending October 8, 2010 Products & Services______ T-Mobile is a big supporter of Wi-Fi usage in homes and in hotspots, he said, which is a key reason they are continuing with UMA. T-Mobile Extends Wi-Fi Calling To Android Smartphones T-Mobile said the Wi-Fi Calling feature will be available "in October 6, 2010 the coming months" on an increasing number of its Android-powered smartphones. Saying that it hosts some 40 million Wi-Fi calls per month, T-Mobile on Wednesday said it is extending Wi-Fi Calling http://www.informationweek.com technology to several Android-based smartphones, including its T-Mobile myTouch and Motorola Defy with Sprint Bundles Apps Motoblur. October 7, 2010 The carrier first launched Wi-Fi Calling in June 2007 and Sprint Nextel is tackling app clutter with a new mobile said the number of Wi-Fi calls continues to rise.