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#TBT: Ericsson, Nortel slash jobs; Sprint cautious on near term … 14 years ago this week

Editor’s Note: RCR Wireless News goes all in for “Throwback Thursdays,” tapping into our archives to resuscitate the top headlines from the past. Fire up the time machine, put on the sepia-tinted shades, set the date for #TBT and enjoy the memories!

Ericsson, Nortel slash more jobs
Three major wireless vendors gave mixed signals last week as Nokia Corp. posted a profit, while Nortel Networks Inc. and L.M. Ericsson reported losses in tune with market consensus. Both Nortel and Ericsson deepened the bleak news with new rounds of layoffs; Nortel firing 5,000 more workers and Ericsson 12,000. All three companies cited the sagging economy and a drop in demand as playing critical roles in their performances, which implied that leading phone maker Nokia would have recorded more robust results. The Finnish vendor had warned earlier in the quarter of a drop in sales. … Read More

Sprint PCS expresses near term caution despite strong 1Q numbers
Sprint PCS added 826,000 net customer additions for the first quarter ended March 31, topping analysts estimates of 800,000 net additions. The carrier said its business customer base jumped 73 percent fueled by its Sprint PCS Wireless Web for Business offering. Net operating revenue for the wireless carrier increased 68 percent to $2.05 billion from $1.22 billion reported for the first quarter of 2000. Average revenue per user increased from $57 last year to $60 this year, in-line with estimates, while the cost of customer acquisition dropped 8 percent to $360 per customer, below estimates of $371 per customer. Customer churn also fell from 2.8 percent for the fourth quarter of 2000, to 2.5 percent for the first quarter of 2001. … Read More

Tower firms expect solid year
American Tower Corp. and SpectraSite Holdings Inc. reported positive operational results last week for the first quarter ended March 31. American Tower said it constructed 375 new towers, acquired 238 wireless towers and one broadcast tower, and removed 175 sites from its active marketing list, for a total tower count of 10,158 wireless towers, 317 broadcast towers and 950 managed or lease/sublease sites. American Tower added 948 broadband equivalent tenants, net of build-to-suit anchor tenants. This is equivalent to an annualized lease-up rate of 0.40 broadband equivalent tenants per tower, the company said. … Read More

Carriers cautious, but no one expects sub numbers to stop
As the apparent economic slowdown continues to shake up Wall Street and dislodge stocks, many in the wireless industry are holding their breath to see whether the situation is grave enough to cause consumers not to jump on-or jump off of- the mobile bandwagon in an effort to tighten the purse strings. At this point in the game, it doesn’t look like the current slowdown-which is behind slashed jobs and revenues-has yet cut into wireless carriers’ subscriber numbers. Several of the nation’s operators released subscriber growth numbers for the first quarter, and so far it looks like a mixed bag. On the low end of the scale, Verizon Wireless said earlier this month it added more than 518,000 subscribers during the first quarter-way down from analysts’ predictions of more than 700,000 customer additions. … Read More

Winstar bankruptcy, lawsuit detail ugly side of vendor financing
Shortly following Winstar Communications Inc.’s announcement last Monday that it had failed to make aggregate interest payments of approximately $75 million on loans, the local multipoint distribution service carrier voluntarily filed for bankruptcy, and then in a surprise move, filed a $10 billion lawsuit against Lucent Technologies Inc. for breach of obligations under a five-year supply agreement. The claim was filed in the U.S. Bankruptcy Court for the District of Delaware. Winstar claims Lucent’s breach is what caused the company to seek bankruptcy protection. In addition to the $10 billion in damages, Winstar is seeking immediate injunctive relief from Lucent, including the payment of more than $90 million, which Lucent was supposed to pay to Winstar on March 30. … Read More

Voice as a commodity
Voice services are a tricky subject for wireless operators. While voice is regarded as the one true killer application for wireless carriers, many are forced to nearly give away voice service to keep up with the ultra-competitive wireless market. While carriers try to differentiate their voice service from the competition, consumers have started basing their buying habits first and foremost on price. A recent Yankee Group report showed 62 percent of wireless customers surveyed said reduced service prices would promote their loyalty to a carrier. Improved sound quality picked up only 18 percent of the vote. … Read More

Spectrum-cap changes could slice wireless pie
Players throughout the wireless industry are waiting for the Federal Communication Commission to determine the fate of the current spectrum-cap rules. If the caps are kept in place-an idea favored by most of the small wireless operators-the wireless industry landscape is expected to remain the same with multiple carriers in each market vying for subscribers. If the cap is lifted-a route favored by the large operators and the Cellular Telecommunications & Internet Association-the wireless landscape could change dramatically. … Read More

Clearwire, ITFS Alliance gain funding
Clearwire Technologies Inc. and the Instructional Television Fixed Service Spectrum Development Alliance are teaming to deliver wireless broadband services to educational, nonprofit and commercial customers, with a $97 million commitment from Goldman Sachs & Co. and Liberty Associated Partners L.P. The partnership will give Clearwire access to licensed spectrum in the 2.5 GHz-2.7 GHz Instructional Television Fixed Service frequency band originally set aside by the Federal Communications Commission for one-way educational programming, and provide the ITFS Alliance, which is comprised of seven licensees, with technologically advanced two-way digital services. … Read More

Ericsson, Sony may dial up partnership
Sony of Japan is holding talks with Sweden’s L.M. Ericsson on merging their handset divisions, hinting at what some analysts perceive as a possible trend in the industry. Both companies recoiled from revealing details on the talks, a deal from which would promise to leverage the mutual strengths of two companies, whose handset units continue to ail. … Read More

Fixed wireless future may lie in unlicensed spectrum
It may seem unbelievable now, but there was a time, not too long ago, when having spectrum that cost millions of dollars was looked upon as a good thing when offering wireless broadband service. The promise of interference-free transmissions and the freedom of owning a personal chunk of precious spectrum prompted Advanced Radio Telecom Corp., Winstar Communications Inc., Teligent Inc., WorldCom Inc. and Sprint Corp., among others, to unload billions in cash to purchase local multipoint distribution service and multichannel multipoint distribution service spectrum in Federal Communications Commission auctions. But now, it seems, they are paying the ultimate price. ART filed for bankruptcy March 30, Winstar did the same April 18, and Teligent is under immediate threat to get its act together before it runs out of money in June. WorldCom and Sprint still have the wherewithal to operate an MMDS network, but their service rollouts are lagging far behind expectations. … Read More

Check out RCR Wireless News’ Archives for more stories from the past.

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