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SoftBank split, Verizon 5G plans … 5 things to know today

1. Sprint parent company SoftBank says it will divide into two companies, one focused on domestic operations and one international. The company’s majority interest in Sprint and its stake in Chinese e-commerce giant Alibaba will be separated from SoftBank’s wireless service provider business, as well as from Yahoo Japan and GungHo Entertainment.

In addition to its core business as a mobile network operator, SoftBank holds significant investments in six Japanese companies and three international firms, according to the company’s website.

SoftBank has been hard hit by the recent downturn in stock prices and investors have been particularly pessimistic about the value of Sprint. At one point SoftBank’s market value was below the value of its Alibaba holdings, implying a negative value for Sprint.

Last week, Sprint’s CFO told Bloomberg News that SoftBank plans to create a new financing subsidiary that will loan money to Sprint, using Sprint’s network infrastructure and spectrum as collateral. This subsidiary will presumably be part of SoftBank’s international organization.

2. Verizon Wireless and Ericsson plan to test “5G” technology in San Francisco, according to an experimental license application filed by Ericsson with the Federal Communications Commission. Ericsson said the trials will involve multiple base stations and will use the 15 GHz and 28 GHz spectrum bands.

“The trial activities will test and evaluate new radio access technologies including higher carrier frequencies to enable the use of larger bandwidths, reduced latency to provide improved user experience, use cases such as mission critical and machine type communications and advanced antenna systems to further improve spectral efficiency,” Ericsson wrote in a description of its plans.

Last week, Verizon told a group of investors it expects 5G technology to be commercially feasible by 2017. However, the International Telecommunications Union is not expected to approve a 5G standard until 2020, and large scale deployments of 5G network gear are not expected until 2020 or later.

3. Deutsche Telekom will lend T-Mobile US up to $2 billion to use in the upcoming 600 MHz spectrum auction. T-Mobile US said in a filing with the Securities and Exchange Commission that it has until December to borrow the money from its German parent, if needed. Deutsche Telekom owns 65% of T-Mobile US.

The so-called broadcast incentive auctions, which will repurpose TV spectrum for use by mobile operators, is set to begin this month. T-Mobile US CEO John Legere has said his company will be an aggressive bidder and plans to “scoop up as much [spectrum] as humanly possible.”

4. The U.S. Commerce Department is making it harder for China’s ZTE to buy certain U.S. products. According to Reuters, the government decided to impose export restrictions after seeing internal ZTE documents that showed ZTE was planning establish shell companies to export restricted goods to Iran.

This is not the first time the U.S. government has expressed concerns about ZTE. In 2012, the House Intelligence Committee issued a report urging U.S. carriers not to buy network gear from Huawei or ZTE because of concerns the gear could be used to gather intelligence from U.S. mobile networks.

5. Xiaomi CEO Lei Jun said his high-flying startup does not have imminent plans to go public, and that he sees the most promising near-term opportunities in rural markets. The Chinese handset maker sold 70 million smartphones last year, an accomplishment that was somewhat diminished by the fact Jun had publicly predicted the young company could sell 80 million phones.

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ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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