Verizon Wireless

Verizon inks mobile search deal with Microsoft

Phil Goldstein — Wed, 07 Jan 2009 15:10:25 -0500

Verizon Wireless will forge a deal with Microsoft to include the software giant's Live Search on its mobile phones, giving Microsoft a victory over rival Google and ending a months-long dance toward the partnership.

Microsoft CEO Steve Ballmer will announce the deal in his keynote address at the Consumer Electronics Show in Las Vegas in the evening on Wednesday. Users will be able to download Microsoft Live Search to their phones to check traffic, movies times and other utilities.

Financial details of the deal have not been disclosed yet, but a report in The Wall Street Journal in November said the deal would include guaranteed payments to Verizon of anywhere between $500 million and $650 million over five years. Microsoft would reportedly share with Verizon revenue generated from ads shown alongside web searches. Verizon is poised to become the largest wireless carrier in the United States with the close of its acquisition of Alltel this week. When the deal closes it will have close to 80 million subscribers, surpassing AT&T Mobility.

The move is a strategic one for Microsoft in a few ways. The company beat out Google in the deal, which had also reportedly been angling to ink the deal with Verizon. It is also Microsoft's first mobile search deal. AT&T and T-Mobile USA use Yahoo, which Microsoft failed to acquire in 2008, as their dedicated search engine. Sprint Nextel uses Google. However, from what is known at this point, this deal does not mean that Verizon customers will be prevented from going outside the Live Search web portal to access other search engines.

For more:
- see this article
- see this post

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Verizon, Microsoft closer to search deal
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Verizon-Alltel deal to close Jan. 9

Phil Goldstein — Mon, 05 Jan 2009 10:04:09 -0500

Verizon Wireless will officially close its $28.1 billion acquisition of Alltel on Jan. 9, according to Verizon Communications.

Verizon Wireless, which is jointly owned by Verizon Communications and Vodafone, passed all regulatory hurdles on the deal in December. The Federal Trade Commission gave the final approval last month and Verizon also has secured $17 billion in loans to complete the transaction. In addition, the company agreed to divest from 105 markets as part of the arrangement.

With the Alltel acquisition, Verizon Wireless will have nearly 80 million subscribers, surpassing AT&T Mobility as the top carrier in the United States. Verizon has said it will put a call center in Little Rock, Ark., where Alltel is based, but that it expects many Alltel jobs to be lost after the deal closes.

For more:
- see this article

Related Articles:
Verizon gets $17B in loans to complete Alltel deal
FTC approves Verizon-Alltel deal

Prediction 8: Wireless broadband pricing will decline - 2009 Predictions

Sue Marek — Sun, 04 Jan 2009 18:10:47 -0500

Wireless broadband pricing has remained fairly steady over the past couple of years as carriers built out their nationwide 3G networks. Most Tier 1 operators offer wireless broadband plans in the price range of $60 per month. Verizon Wireless, for example, currently charges customers $40 per month for 50 MG of data and $60 per month for 4 GB of data.

But flat-rate operators such as Cricket Communications are starting to challenge this model. Cricket entered the wireless broadband market in 2008 with a less expensive offering--the company currently charges $40 per month for unlimited broadband data.

Meanwhile, RadioShack recently announced it was selling a $100 Acer netbook bundled with a two-year subscription to AT&T's mobile broadband service. This is one of the first bundled offerings but we expect to see more experimentation with this model in 2009.

The bottom line: Wireless data pricing will become more competitive as carriers start bundling their broadband data plans with netbooks and laptops. Plus upstarts such as Clearwire (with its WiMAX service) and flat-rate carriers like Cricket, will put more pressure on traditional operators causing monthly broadband fees to decline.

Prediction 7: All-you-can-eat plans will drop in price - 2009 Predictions

Sue Marek — Sun, 04 Jan 2009 17:55:21 -0500

In 2008 we saw the traditional Tier 1 operators introduce unlimited airtime rate plans at the high-end of the price spectrum. In early February, three of the Tier 1 operators--Verizon, T-Mobile USA and AT&T--launched $100 unlimited airtime rate plans, effectively cannibalizing their customers on higher priced rate plans of $150 and $200 per month in order to offer the allure of unlimited calling for $100 per month.

Sprint followed suit a few weeks later with its "Simply Everything" plan that provides unlimited voice, data, text, email, Web-surfing, Sprint TV, Sprint Music, GPS Navigation, Direct Connect and Group Connect for $99.99 a month. The company also has an unlimited voice-only plan for $89.99 per month.

Sprint has been avidly marketing its Simply Everything plan to consumers as a cost-effective alternative during challenging economic times. So far we haven't seen the other Tier 1 operators drop their prices to meet Sprint's offer but in 2009 we expect to see carriers start to experience price pressure and we think that the unlimited calling plan pricing will drop to the $80 per month range.

Prediction 3: Tier 2 and Tier 3 U.S. carriers will become scarce - 2009 Predictions

Sue Marek — Sun, 04 Jan 2009 16:28:28 -0500

The U.S. wireless scene is beginning to look a little like the duopoly that existed back in the early 1990s when the U.S. just had two operators in every market. In 2008 we saw Verizon Wireless snap up Alltel for $28.1 billion bringing its total subscriber base to more than 83 million. Likewise, AT&T's proposed purchase Centennial Communications will tip its subscriber base to more than 75 million.

The gap between the Tier 1 and the Tier 2/Tier 3 carriers is growing wider. Currently there are only seven networks with fewer than 7 million subscribers in the U.S. and if AT&T's planned purchase of Centennial is approved, that number will drop to six.

This disheartening trend means that Tier 2 and Tier 3 carriers will continue to have difficulty securing state-of-the-art handsets for their customers (at least not until long after those devices have made their way into the hands of Tier 1 operator customers).

For vendors the shrinking base of Tier 2 and Tier 3 carriers means fewer customers to buy their equipment. Obviously if you're a vendor with a Tier 1 customer base, this isn't a problem. But for smaller vendors, the Tier 3 carriers often offered them a chance to get a foothold in the market.

2008 Year in Review: The 700 MHz auction

Phil Goldstein — Wed, 24 Dec 2008 13:36:25 -0500

The news: The FCC's auction of the 700 MHz spectrum occurred in early 2008 and initially it was thought that non-traditional bidders such as Google would compete with incumbent telecom players for some of the precious spectrum.

On Jan. 15, the FCC released a final list of 214 qualified bidders for the auction and established specific reserve prices for the five blocks of 700 MHz spectrum: Block A, $1.8 billion; Block B, $1.4 billion; Block C, $4.6 billion; Block D, $1.3 billion; Block E, $0.9 billion. On Jan. 24, the first round of bidding started, with no set number of rounds--rounds would continue until there were no more bids. The first round netted the FCC $2.4 billion in provisionally winning bids after 1,849 bids were placed. The FCC did not disclose which bidders placed bids or who was in the lead in an effort to discourage collusion between potential bidders.

After 261 rounds there was $19.59 billion worth of provisionally winning bids. The only spectrum block that did not meet its reserve price was the D-Block, which was set aside for a public-private partnership to develop an interoperable network for public safety and emergency response radios. The fate of the D-Block still remains uncertain.

As it turned out, Verizon Wireless and AT&T Mobility made out like bandits in the auction, and Google did not win a single bid, which is what some had suspected all along.

Why it was significant: The 700 MHz spectrum auction was not only the largest spectrum auction ever, but it managed to raise more money than every other spectrum auction the FCC had ever done combined. And while Frontier, a subsidiary of the satellite television company EchoStar, won a significant amount of licenses in the E-Block, most of the major winning bidders were the the usual suspects. The Tier 1 carriers cleaned up and Verizon, above all, cemented its market position.
(See FierceWireless' dedicated auction coverage here)

Year in Review: Smartphones ruled in 2008

Sue Marek — Tue, 23 Dec 2008 12:12:01 -0500

2008 ushered in an air of uncertainty to the U.S. wireless market. As bidders geared up for the 700 MHz spectrum auction in January, there was lots of speculation about whether new entrants (Google) would walk away with valuable wireless spectrum and introduce a whole new "open" wireless business model to U.S. consumers.

That didn't happen--instead most of the 700 MHz spectrum ended up in the hands of the traditional Tier 1 operators (Verizon Wireless). But that didn't stop the "open" network debate from gaining traction. In 2008 there was lots of discussion about open networks, open devices and open applications. But if you want a clear definition of what "open" means to each operator, you are probably aren't going to get a straight answer. At the CTIA Wireless IT & Entertainment Conference in San Francisco in September, the leaders of three Tier 1 U.S. carriers--Sprint Nextel, T-Mobile USA and Verizon Wireless--all provided different (and somewhat convoluted views) of what open means to them. I don't expect the open debate to end anytime soon, but I do hope that in 2009 carriers start to paint a clearer picture of this new open wireless ecosystem and how they fit into it.

One thing is clear, however, and that is that open mobile operating systems are the wave of the future. 2008 was the year Google's Android operating system made its commercial debut with its first device, the T-Mobile G1. And thanks to Google's inroads, competitors such as Symbian are also taking a new open source approach. In June, Nokia announced that it was acquiring Symbian and creating an open source platform.

Of course, one of the primary drivers of the open source operating system is that smartphones are finally achieving mass market appeal. Thanks to the 2007 introduction of the Apple iPhone, followed by the 2008 debut of the iPhone 3G, smartphones with touchscreen interfaces have become the new "must-have" consumer electronics device. In a recent discussion I had with Best Buy Mobile's Scott Moore, he said that nearly one in three people lined up in front of Best Buy at 3 a.m. on Black Friday were there to purchase a wireless phone--that's a big switch from year's past when Best Buy didn't sell its first cell phone on Black Friday until after 8 a.m.

I suspect those consumers lined up at 3 a.m. weren't braving the cold and crowds to purchase just any phone. I bet they were there for a smartphone--either an iPhone 3G, a BlackBerry Storm, a BlackBerry Bold, or a T-Mobile G1. -Sue

P.S. Please note that FierceWireless is going on a short holiday hiatus. We will return to your inboxes on Monday, Jan. 5, 2009. Have a happy and safe holiday.

Verizon Wireless expands prepaid options

Phil Goldstein — Tue, 23 Dec 2008 11:09:36 -0500

Verizon Wireless has expanded its prepaid service options, giving customers greater flexibility by letting them pay a per day access fee.

The carrier has three different plans that it has started offering:

The "Core" plan has a daily access fee of $0.99 and offers unlimited in-network calling. All other calls are $0.10 per minute.
The "Plus" plan has a daily access fee of $1.99 and offers free night calling.
The "Power" plan has a daily access fee of $2.99 and offers free night and weekend calling. Out-of-network weekday calling is $0.10 per minute. Text messages for all plans are $0.10 each and multimedia messages are $0.25 each.

Prepaid users can also use their accounts to access Verizon media services like VCast and VZ Navigator. Prepaid service has been growing in the second half of 2008 as the economy has worsened and credit has tightened up.

For more:
- see this article

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Prepaid service growth to continue into 2009
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AT&T and Verizon finalize asset swap

Phil Goldstein — Mon, 22 Dec 2008 14:41:12 -0500

AT&T Mobility and Verizon Wireless finalized their wireless asset swap, which was first announced last December, after getting regulatory approval from both the FCC and the U.S. Department of Justice.

The deal, which gained approval from the Federal Trade Commission in March, gives AT&T some former Rural Cellular licenses and network assets in the Burlington, Vt., metro area as well as areas in upstate New York and Washington State. Verizon acquired Rural Cellular in late July 2007. Verizon gets some assets in Kentucky that AT&T acquired when it merged with Dobson Communications in October 2007. Verizon also gets 10 MHz of PCS spectrum and additional cash from AT&T.

For more:
-see this release

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2008 Year in Review: Verizon Wireless acquires Alltel for $28.1 billion

Phil Goldstein — Mon, 22 Dec 2008 13:34:01 -0500

The news: On June 5, Verizon announced that it would acquire Alltel for $28.1 billion.

The deal sent ripples through the wireless world because it meant Verizon would pass AT&T Mobility as the nation's No. 1 carrier and would pick up coverage in 57 markets that it did not operate in. It also made sense in a number of ways--Alltel had been a roaming partner with Verizon for years, and both used CDMA technology and Qualcomm's BREW platform for content delivery.

By early October, despite concerns about Alltel's debt, the deal seemed to be on track. Then, a coalition of rural wireless carriers, led by Leap Wireless, petitioned the FCC to deny the deal, saying it would reduce competition. A group of public interest groups, under the auspices of the Public Interest Spectrum Trust, urged the FCC to consider rules that would prevent the newly merged company from violating open access rules that apply to wireline ISPs.

The U.S. Department of Justice approved the deal as long as Verizon divested 100 markets in 22 states where the two carriers overlapped. On Nov. 4, after a marathon open meeting, the FCC approved the deal, creating a new company with 83.8 million subscribers. The FCC required that Verizon divest from five additional markets, and though some commissioners said they worried about reduced competition, the deal was sealed.

Why it was significant: Consolidation in the wireless industry had been happening for some time, with Tier 1 carriers gobbling up smaller operators. But Verizon Wireless' decision to acquire carrier Alltel and, in turn, become the largest carrier in the United States, put a whole new spin on the concept of what a wireless behemoth could be. The deal changes the national wireless map and raises questions about how the other major carriers would respond. Would they have to push for acquisitions to keep up? AT&T certainly thought so, as it sought to acquire Centennial in the wake of the deal. It also raises the question of competition. With Sprint bleeding subscribers and T-Mobile USA's footprint not as extensive as its rivals, is the wireless business about to become a two-player game?

Verizon, RIM pleased with BlackBerry Storm sales

Phil Goldstein — Fri, 19 Dec 2008 11:17:40 -0500

One month after its initial launch, new shipments of Research In Motion's BlackBerry Storm are coming into the United States, and both RIM and Verizon Wireless said they were pleased with how well the phone was selling.

The Storm, the first touchscreen BlackBerry, is being sold exclusively by Verizon for $199 with a two-year contract. Stores sold out of the phone on its initial launch on Nov. 21, and some customers complained at the time that stores were understocked. Verizon said yesterday that new shipments were coming into the Northwest, and Verizon spokeswoman Brenda Raney confirmed that shipments would be coming in to other parts of the country as well.

RIM, which posted stronger revenues for the third quarter yesterday, said it was pleased with how well the Storm was selling. The company said it was not able to meet product demand levels for North America, even though it replenished its supply of the phone; that Nov. 21 was the biggest single day for BlackBerry signups in the company's history; and that 75 percent of sales of the Storm are new customers.

Verizon also beat back rumors that were circulating on several blogs that there was a high return rate for the Storm. The blog Boy Genius Report quoted a Verizon spokesperson yesterday as saying that just the opposite was true. "The Storm has the lowest return rate of any of our PDAs and at this point in its life cycle, it has the lowest return rate of any PDA we currently sell," they said. Verizon has not released any sales numbers for the phone.

For more:
- see this release about the shipments
- see this post about RIM's news on the Storm
- see this post about the return rate

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Verizon unlocks GPS on some of its WinMo phones

Phil Goldstein — Wed, 17 Dec 2008 11:01:30 -0500

Verizon Wireless has decided to allow a certain number of its Windows Mobile handsets to have standalone GPS, breaking them free from Verizon's proprietary navigation software.

Verizon previously had locked these phones so they could only use VZ Navigator. However, according to an official statement released from the carrier, the Samsung Omnia, Samsung Saga and HTC Touch Pro will all get firmware updates in the first half of 2009 allowing them to use standalone GPS software such as Google Maps.

According to a statement made by Steve Schwed, Verizon's HQ Executive Relations Supervisor, Verizon has worked out a solution with Windows Mobile to get a software upgrade for the three devices sometime in the first half of next year. Schwed said the reason that certain features--i.e. standalone GPS--may not be enabled on Verizon handsets is that they do not meet "performance goals."

"We will often choose to introduce the phone without that feature but ask that the manufacturer come back to us with revised software that has to be tested to make sure the service works the same across our entire wireless footprint--from Maine to Hawaii," he said in the statement. "In the case of open standalone GPS, we are partnering with the Windows Mobile device manufacturers to provide a software upgrade that will add this capability to the existing assisted GPS capability."

For more:
- see this article

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Verizon's Magic Wrapping Paper Ad - Holiday Commercials

Phil Goldstein — Mon, 15 Dec 2008 09:31:14 -0500

This Verizon Wireless ad is highly effective in reinforcing the concept that most phones are no longer just phones any more, and has a clever way of going through the multiple functions of the LG Dare: phone, digital camera, music player, GPS navigator, etc. And, of course, the "Verizon guy" has to make some kind of appearance.
Aesthetics: A-
Effectiveness: A
Overall Grade: A-

Verizon gets $17B in loans to complete Alltel deal

Phil Goldstein — Fri, 12 Dec 2008 10:56:05 -0500

Verizon Wireless secured $17 billion in loans to complete its acquisition of Alltel, which has passed regulatory hurdles.

Verizon was able to get the billions of dollars in loans needed to finance the completion of the deal at a time when most credit markets still remain relatively frozen. The $28.1 billion purchase of Alltel, which just received final regulatory approval from antitrust regulators at the Federal Trade Commission, will make Verizon Wireless the nation's largest wireless carrier.

When Verizon announced it was acquiring Alltel in June it pledged to take on $22.2 billion of it projected net debt in addition to paying $5.9 billion for Alltel's equity. In March 2007 TPG Capital and the private-equity arm of Goldman Sachs Group, GS Capital Partners, bought Alltel for $27.5 billion.

For more:
- see this article

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FTC approves Verizon-Alltel deal

Phil Goldstein — Thu, 11 Dec 2008 10:18:24 -0500

The Federal Trade Commission approved Verizon Wireless' $28.1 billion acquisition of Alltel on Wednesday, clearing the last major hurdle to the closure of the deal that will create the nation's largest wireless carrier.

Antitrust regulators at the FTC included the deal on a list of transactions that received "early termination" of their antitrust reviews. An early termination means that the review was completed before the end of a 30-day period required under antitrust law. The deal was given approval by antitrust regulators at the U.S. Department of Justice in late October and the FCC approved the deal Nov. 4. Verizon agreed to divest from 105 markets where the two carriers had overlapping coverage.

The newly merged carrier will have more than 80 million subscribers, surpassing the nearly 75 million of AT&T Mobility.

For more:
- see this article

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Santa, please save Sprint Nextel

Sue Marek — Thu, 11 Dec 2008 09:42:25 -0500

With the holiday season approaching, I thought it was a perfect time to ask Santa to grant some of my wireless wishes. Here's what I want this holiday season:

1. Santa, please save Sprint Nextel. I want Sprint, the underdog operator, to overcome all of its issues and be restored to the innovative nationwide operator it once was. I long for a return of the old Sprint that was a wireless data leader and a formidable competitor to AT&T and Verizon Wireless.

2. Put an end to the iPhone clones. Handset makers: stop trying to copy the iPhone and instead come up with your own breakthrough wireless device that delivers a superb user experience. Even better, make sure the phone works flawlessly on carrier 3G networks before you debut it.

3. Help Clearwire's WiMAX vision come true. I know there are a lot of naysayers that doubt Clearwire's vision of a nationwide WiMAX network will come to fruition, but I'd love to see it happen. I think this savvy upstart could challenge traditional wireless operator business models and create a much more competitive U.S. wireless market. Plus, Clearwire's mobile WiMAX buildout will likely result in Verizon Wireless and AT&T upgrading to LTE more quickly and that would be a big plus for wireless infrastructure vendors that are currently struggling with the tough economic conditions.

My list may not be long, but my wishes aren't going to be easy to grant. I hope Santa has some business-savvy elves ready to buckle down and work on my list. Let's not stop here-- send your wireless wish list to sue@fiercemarkets.com or comment below. --Sue

Verizon to deploy LTE by late 2009

Phil Goldstein — Wed, 10 Dec 2008 10:24:50 -0500

Verizon Wireless will begin deploying Long Term Evolution (LTE) wireless broadband technology by the end of 2009, accelerating their rollout timetable, a top executive said Tuesday.

Dick Lynch, executive vice president and CTO of Verizon Communications, said the carrier expected to deploy LTE sooner than expected. "We expect that LTE will actually be in service somewhere here in the U.S. probably this time next year," Lynch said, in a speech at Cisco Systems' C-Scape conference in San Jose, Calif. Previous estimates for Verizon's LTE deployment had been for around 2010, with widescale commercial rollout sometime in 2011.

Verizon, along with AT&T Mobility have indicated they will throw their 4G support behind LTE, while Sprint Nextel has backed mobile WiMAX as its 4G standard. T-Mobile USA is still rolling out its 3G UMTS network across the United States.

Lynch also said that after Verizon begins deploying LTE, the carrier will offer femtocells to extend the signal indoors. "A femtocell of LTE or an access point of WiFi is a really critical component of the way customers want their broadband delivered," Lynch said.

For more:
- see this article

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Wireless networks remain mixed on WiFi

Phil Goldstein — Mon, 08 Dec 2008 11:15:56 -0500

The Tier 1 U.S. operators remain conflicted over offering WiFi in their phones. But as WiFi support picks up steam from chipmakers and customer demand for more ways to get broadband access on their phones increases, that paradigm may shift. Special Report

BlackBerry Storm will sell for $219 - Rumor Mill Roundup

Phil Goldstein — Tue, 02 Dec 2008 15:51:05 -0500

Verdict: WRONG

Why it went wrong: We jumped the gun a little bit on reporting on the pricing for Research In Motion's BlackBerry Storm, which Verizon Wireless launched to much fanfare on Nov. 21. The $219 rumor was based off of a post on the blog Boy Genius Report, which had cited screenshots taken of a "staging" website for Verizon, and not the real website with full retail pricing options. The actual pricing turned out to be $199 with a two-year contract, making the phone competitive with Apple's iPhone 3G.

Verizon Wireless launches Samsung Omnia

Phil Goldstein — Tue, 25 Nov 2008 11:20:30 -0500

Verizon Wireless added another smartphone to its lineup just ahead of the official start of the holiday shopping season.

The carrier launched the CMDA Samsung Omnia, a touchscreen phone running on Windows Mobile with a five-megapixel camera. The phone uses Samsung's Touchwiz user interface and has haptic feedback that provides a little vibration when a selection is made. The phone has an on-screen QWERTY keyboard, runs on Windows Mobile 6.1, the Opera 9.5 web browser and is Wi-Fi capable. The phone is similar in may ways to the Samsung Delve being offered by Alltel, but the five-megapixel camera puts in on par with the Motorola Zn5 being offered by T-Mobile USA.

The Omnia will be available for sale online Nov. 26 and in stores beginning Dec. 8 for $250 after a $70 mail-in rebate and with a two-year contract.

For more:
- see this release

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