Verizon and AT&T should face a bigger mobile rival, Sprint CFO says

The U.S. mobile industry would be more competitive with one less carrier, Sprint’s CFO said on Thursday.

The problem now is that Sprint and T-Mobile US are so much smaller than the top two carriers, AT&T and Verizon Wireless, Joe Euteneuer said in an onstage interview at a Goldman Sachs conference in New York. Based on the experience of other industries, closer parity is better, he said.

“When you get down to three comparable-sized players, you get much more effective competition,” Euteneuer said.

Sprint has approximately 55 million subscribers and T-Mobile about 43 million, while Verizon Wireless and AT&T both are around 100 million, though they count customers differently. T-Mobile US CFO Braxton Carter reportedly said Wednesday that a merger between his company and Sprint would be the logical next step in the industry’s consolidation. Some industry analysts also believe the U.S. will eventually go to three competitors, as other affluent countries have.

Though more consolidation might be good for the country, that doesn’t mean it’ll happen, Euteneuer acknowledged. Whether the U.S. should have three or four big mobile carriers is a hotly debated topic, and both the U.S. Department of Justice and the Federal Communications Commission have some control over whether another big deal could take place. Regulators nixed AT&T’s attempt to buy T-Mobile in 2011.

MetroPCS, Leap Wireless, and some smaller players have recently been snapped up by big carriers, and Sprint was acquired by SoftBank earlier this year, but the top four operators have stayed the same.

Also at the conference, Euteneuer said Sprint’s combination with SoftBank, which is a major carrier in Japan, finally gives it the kind of scale that Verizon and AT&T have long enjoyed when negotiating with device makers. “I do believe that there is a benefit there,” he said.

Sprint is currently focused on building out its network, which will use several different cellular frequency bands as well as Wi-Fi for better coverage and capacity than it offers today, Euteneuer said.

The company is still building out LTE on its 1.9GHz band and expects to reach 200 million people on that system by the end of the year. It’s using the 800MHz band for voice service now and plans to start deploying LTE on those frequencies at the beginning of next year. By the end of the year, LTE will be available on more than 5,000 cells that Sprint acquired with Clearwire, which use 2.5GHz spectrum. Finally, early next year Sprint will start talking about its plans for LTE on its own 2.5GHz frequencies, Euteneuer said.

By the end of this year, the company will start offering handsets that can take advantage of all those networks with radios for the 800MHz, 1.9GHz, and 2.5GHz bands, he said.

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Verizon eyes combined wired-mobile services, won't go into Canada

IDG News Service - Verizon Wireless has no plans to expand into the Canadian mobile market, the head of its parent company said on Tuesday in the wake of a deal to bring all of the wireless subsidiary under Verizon Communications.

Verizon is focused on finishing the proposed $130 billion deal with Vodafone Group and taking advantage of opportunities in video, mobile commerce, cloud services and other areas for a fully merged wired and mobile carrier, Chairman and CEO Lowell McAdam said on a conference call Tuesday.

In fact, the company was never as serious about competing in Canada as news reports had claimed, he said. Reports earlier this year had said the company might buy a Canadian mobile operator, setting off a storm of protest from that country's major carriers.

"It was always on the fringe for us," McAdam said. The company's planned "One Verizon" strategy with wired and wireless assets under one roof offers chances for much better returns than a Canadian mobile business would have, he said. "That's off the table at this point."

The One Verizon vision is at the heart of the Vodafone deal, McAdam said. Buying out Vodafone's 45 percent stake in Verizon Wireless will start to boost revenue immediately after completion of the deal, which is expected in the first quarter of next year, according to the company. The move may create some synergies, but its point is not to cut costs, McAdam said.

McAdam pointed to combined fixed and mobile capabilities several times during the call, without giving many details. But he cited some examples of areas where having both under the same roof might allow for new service offerings or features.

Verizon has made significant investments in new technologies on its wireline side and could make even better use of them across both the wired and wireless realms, McAdam said. Those investments include Verizon's acquisitions of cloud services company Terremark, managed security vendor Cybertrust and fleet management company Hughes Telematics. Merged with mobile services, those technologies could help Verizon serve industries including health care and energy, he said.

"We see it as clearing the road, if you will, for us to aggressively go after these market opportunities," McAdam said.

The deal could help Verizon pursue services beyond traditional one-to-a-customer phone contracts, leading to what may eventually be 500 percent market penetration for mobile, with many more devices than individual customers, McAdam said.

Verizon and U.K.-based Vodafone had once discussed the possibility of merging into one big international mobile operator but decided that wouldn't make sense for the companies' shareholders, McAdam said. However, with an already large international presence that includes 35 cloud data centers worldwide and services in 150 countries, Verizon may selectively make international investments if they enhance shareholder value, he said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Verizon eyes combined wired-mobile services, won't go into Canada

Verizon Communications has reached an agreement to buy Vodafone Group's 45 percent stake in its Verizon Wireless subsidiary for $130 billion.

Under the deal, Verizon will take 100 percent ownership of the wireless unit, the largest mobile operator in the U.S. This will enhance its ability to offer customers "seamless and integrated services," the carrier said in a press release.

The transaction has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2014, subject to customary regulatory approvals. Verizon will pay a combination of cash and stock for Vodafone's stake.

"As a wholly owned entity, Verizon Wireless will be better equipped to take advantage of the changing competitive dynamics in the market and capitalize on the continuing evolution of consumer demand for wireless, video and broadband services," Verizon Chairman and CEO Lowell McAdam said in the press release.

"This transaction allows both Vodafone and Verizon to execute on their long-term strategic objectives," Vodafone Group CEO Vittorio Colao said in the release. "Our two companies have had a long and successful partnership and have grown Verizon Wireless into a market leader with great momentum. We wish Lowell and the Verizon team continuing success over the years ahead."

Verizon has sought to buy out its wireless business, originally formed as a joint venture with Vodafone, for several years. The transaction is unlikely to have a significant impact on U.S. mobile consumers, industry analysts said last week. Vodafone may use the huge windfall to buy smaller carriers and further its pursuit of wireline operations, analysts said.

Verizon was willing to pay a sky-high price for Vodafone's stake because of the strategic importance of the deal, said Chetan Sharma, founder and president of Chetan Sharma Consulting.

"They will be in control of their own destiny and they clearly believe in their future and that the stake will be worth a lot more in a few years," Sharma said in an email interview.

Because Verizon stock will make up part of the deal, it's a good one for Vodafone, said analyst Roger Entner of Recon Analytics.

"This transaction shows continued faith about the outperformance of of VZW and the U.S. wireless market in general," Entner said via email. "It also allows Vodafone to continue to participate in the upside in the U.S."

Vodafone is expected to use proceeds of the buyout to shore up its European business.

"What is finally motivating Vodafone is the implementation of their European integrated carrier strategy," Chetan Sharma, founder and president of Chetan Sharma Consulting, told IDG News last week.

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Verizon to buy out Vodafone's stake in mobile unit for $130B

Verizon Communications has reached an agreement to buy Vodafone Group's 45 percent stake in its Verizon Wireless subsidiary for $130 billion. Under the deal, Verizon will take 100 percent ownership of the wireless unit, the largest mobile operator in the U.S.

"As a wholly owned entity, Verizon Wireless will be better equipped to take advantage of the changing competitive dynamics in the market and capitalize on the continuing evolution of consumer demand for wireless, video, and broadband services," Verizon CEO Lowell McAdam said in a press release.

[ Get expert advice about planning and implementing your BYOD strategy with InfoWorld's 29-page "Mobile and BYOD Deep Dive" PDF special report. | Keep up on key mobile developments and insights with the Mobilize newsletter. ]

The transaction has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2014, subject to customary regulatory approvals. Verizon will pay a combination of cash and stock for Vodafone's stake.

Verizon has sought to buy out its wireless business, originally formed as a joint venture with Vodafone, for several years. The transaction is unlikely to have a significant impact on U.S. mobile consumers, industry analysts said last week. Vodafone may use the huge windfall to buy smaller carriers and further its pursuit of wireline operations, analysts said.

Verizon will pay Vodafone $58.9 billion in cash, financed by a $61 billion bridge credit arrangement from a group of investment banks. It plans to reduce its commitments under that arrangement later by issuing permanent financing. The company will also issue common stock currently valued at about $60 billion to be distributed to Vodafone shareholders, and will issue $5 billion in notes payable to Vodafone. Verizon will sell its 23.1 percent minority stake in Vodafone Omnitel, an Italian mobile operator, to Vodafone for $3.5 billion. The rest of the transaction will be a combination of other considerations, the release said.

Verizon was willing to pay a sky-high price for Vodafone's stake because of the strategic importance of the deal, said Chetan Sharma, founder and president of Chetan Sharma Consulting. "They will be in control of their own destiny and they clearly believe in their future and that the stake will be worth a lot more in a few years," Sharma said.

Because Verizon stock will make up part of the deal, it's a good one for Vodafone, said analyst Roger Entner of Recon Analytics. "This transaction shows continued faith about the outperformance of of Verizon Wireless and the U.S. wireless market in general," Entner said. "It also allows Vodafone to continue to participate in the upside in the U.S."

Stephen Lawson covers mobile, storage, and networking technologies for the IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com.

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Verizon to buy out Vodafone's stake in mobile unit for $130B

IDG News Service - Verizon Communications has reached an agreement to buy Vodafone Group's 45 percent stake in its Verizon Wireless subsidiary for US$130 billion.

Under the deal, Verizon will take 100 percent ownership of the wireless unit, the largest mobile operator in the U.S. This will enhance its ability to offer customers "seamless and integrated services," the carrier said in a press release.

The transaction has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2014, subject to customary regulatory approvals. Verizon will pay a combination of cash and stock for Vodafone's stake.

"As a wholly owned entity, Verizon Wireless will be better equipped to take advantage of the changing competitive dynamics in the market and capitalize on the continuing evolution of consumer demand for wireless, video and broadband services," Verizon Chairman and CEO Lowell McAdam said in the press release.

"This transaction allows both Vodafone and Verizon to execute on their long-term strategic objectives," Vodafone Group CEO Vittorio Colao said in the release. "Our two companies have had a long and successful partnership and have grown Verizon Wireless into a market leader with great momentum. We wish Lowell and the Verizon team continuing success over the years ahead."

Verizon has sought to buy out its wireless business, originally formed as a joint venture with Vodafone, for several years. The transaction is unlikely to have a significant impact on U.S. mobile consumers, industry analysts said last week. Vodafone may use the huge windfall to buy smaller carriers and further its pursuit of wireline operations, analysts said.

Verizon will pay Vodafone $58.9 billion in cash, financed by a $61 billion bridge credit arrangement from a group of investment banks. It plans to reduce its commitments under that arrangement later by issuing permanent financing. The company will also issue common stock currently valued at about $60 billion to be distributed to Vodafone shareholders, and will issue $5 billion in notes payable to Vodafone. Verizon will sell its 23.1 percent minority stake in Vodafone Omnitel, an Italian mobile operator, to Vodafone for $3.5 billion. The rest of the transaction will be a combination of other considerations, the release said.

Verizon was willing to pay a sky-high price for Vodafone's stake because of the strategic importance of the deal, said Chetan Sharma, founder and president of Chetan Sharma Consulting.

"They will be in control of their own destiny and they clearly believe in their future and that the stake will be worth a lot more in a few years," Sharma said in an email interview.

Because Verizon stock will make up part of the deal, it's a good one for Vodafone, said analyst Roger Entner of Recon Analytics.

"This transaction shows continued faith about the outperformance of of VZW and the U.S. wireless market in general," Entner said via email. "It also allows Vodafone to continue to participate in the upside in the U.S."

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Verizon and Vodafone are close to a $130B deal

IDG News Service - Verizon and Vodafone are close to a deal that will see the U.S.-based carrier buy out the U.K. company's stake in Verizon Wireless for $130 billion, according to press reports.

Vodafone last week confirmed negotiations for the buy-out of its 45-percent stake, a deal that is not seen as having much impact on Verizon Wireless customers.

Negotiators for both companies have agreed on terms of a cash and stock transaction, but both boards must still approve the deal, the Wall Street Journal reported.

The expectation that interest rates could rise may be driving Verizon to close on the buy-out, which it has been seeking for some time, analysts said last week. Higher interest rates would drive up the cost of financing the deal.

Vodafone is expected to use proceeds of the buyout to shore up its European business.

"What is finally motivating Vodafone is the implementation of their European integrated carrier strategy," Chetan Sharma, founder and president of Chetan Sharma Consulting, told IDG News last week.

Stephen Lawson, of the IDG News Service, contributed to this report.

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Verizon shells out $130 billion to Vodafone for mobile unit

Verizon Communications has reached an agreement to buy Vodafone Group's 45 percent stake in its Verizon Wireless subsidiary for $130 billion.

Under the deal, Verizon will take 100 percent ownership of the wireless unit, the largest mobile operator in the U.S. This will enhance its ability to offer customers "seamless and integrated services," the carrier said in a press release.

The transaction has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2014, subject to customary regulatory approvals. Verizon will pay a combination of cash and stock for Vodafone's stake.

"As a wholly owned entity, Verizon Wireless will be better equipped to take advantage of the changing competitive dynamics in the market and capitalize on the continuing evolution of consumer demand for wireless, video and broadband services," Verizon Chairman and CEO Lowell McAdam said in the press release.

"This transaction allows both Vodafone and Verizon to execute on their long-term strategic objectives," Vodafone Group CEO Vittorio Colao said in the release. "Our two companies have had a long and successful partnership and have grown Verizon Wireless into a market leader with great momentum. We wish Lowell and the Verizon team continuing success over the years ahead."

Verizon has sought to buy out its wireless business, originally formed as a joint venture with Vodafone, for several years. The transaction is unlikely to have a significant impact on U.S. mobile consumers, industry analysts said last week. Vodafone may use the huge windfall to buy smaller carriers and further its pursuit of wireline operations, analysts said.

Verizon was willing to pay a sky-high price for Vodafone's stake because of the strategic importance of the deal, said Chetan Sharma, founder and president of Chetan Sharma Consulting.

"They will be in control of their own destiny and they clearly believe in their future and that the stake will be worth a lot more in a few years," Sharma said in an email interview.

Because Verizon stock will make up part of the deal, it's a good one for Vodafone, said analyst Roger Entner of Recon Analytics.

"This transaction shows continued faith about the outperformance of of VZW and the U.S. wireless market in general," Entner said via email. "It also allows Vodafone to continue to participate in the upside in the U.S."

Vodafone is expected to use proceeds of the buyout to shore up its European business.

"What is finally motivating Vodafone is the implementation of their European integrated carrier strategy," Chetan Sharma, founder and president of Chetan Sharma Consulting, told IDG News last week.

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Reports: Verizon, Vodafone close to $130 billion deal

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Verizon Wireless buyout drive is all about the money

IDG News Service - The price Verizon might pay to buy out its mobile subsidiary, reportedly $100 billion or more, is the most important thing that mobile users need to know about the potential deal.

Vodafone Group, which owns 45 percent of Verizon Wireless, confirmed on Thursday that it is in talks with Verizon Communications to sell its minority stake to the U.S. parent company. Vodafone cautioned that there's no guarantee they'll be able to make a deal, but the companies have talked about it before and may be more motivated than ever. Verizon declined to comment.

If Verizon does take the leap, it's likely to be the biggest telecommunications deal in U.S. history. But consumers shouldn't look for big changes in mobile phones or services from Verizon after its wireless partner is sent packing, industry analysts said. If anything, they might just take it as one more sign that they're well-loved.

"It just shows you how attractive this market is," said analyst Roger Entner of Recon Analytics. The Verizon Wireless deal would come on top of several other transactions in the billions just over the past year: Japan's SoftBank bought control of Sprint for $21.6 billion, T-Mobile paid $1.5 billion plus stock for MetroPCS, and AT&T agreed to buy Leap Wireless at a total cost of nearly $1.2 billion.

"Everybody, from the big to the small, is betting on this market," Entner said.

That's because U.S. consumers are buying into mobile technology and services in a big way and looking to combine the wireless experience with wireline TV and broadband, he said.

"Americans are seeing the value of it," Entner said. "We are leading the wireless broadband, and smartphone, and integrated communications world."

Verizon just wants to put more money behind a good investment, Entner said. The deal might be coming together now partly because interest rates are expected to rise, increasing Verizon's potential cost of borrowing to finance the buyout.

Taking full control of Verizon Wireless would also simplify the company's management, eliminating the separate board of directors overseeing the mobile subsidiary and some redundant administrative functions. Bringing its wired and wireless businesses fully into one company might make it a bit easier for Verizon to offer combined services, he added.

"For the subscribers, I don't think much will change," Entner said. A wholly owned Verizon mobile business wouldn't be significantly more competitive, either. Nor would Verizon's debt load, reportedly $50 million or more, weaken the company. In time, the buyout would pay for itself, Entner said.

"At roughly $2,000 per subscriber, it's not even outlandishly expensive," he said. Cingular paid more per subscriber to acquire AT&T Wireless in 2004, according to Entner.

Reprinted with permission from IDG.net. Story copyright 2012 International Data Group. All rights reserved.

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Verizon Wireless buyout drive is all about the dollar signs

The price Verizon might pay to buy out its mobile subsidiary, reportedly $100 billion or more, is the most important thing that mobile users need to know about the potential deal.

Vodafone Group, which owns 45 percent of Verizon Wireless, confirmed on Thursday that it is in talks with Verizon Communications to sell its minority stake to the U.S. parent company. Vodafone cautioned that there’s no guarantee they’ll be able to make a deal, but the companies have talked about it before and may be more motivated than ever. Verizon declined to comment.

If Verizon does take the leap, it’s likely to be the biggest telecommunications deal in U.S. history. But consumers shouldn’t look for big changes in mobile phones or services from Verizon after its wireless partner is sent packing, industry analysts said. If anything, they might just take it as one more sign that they’re well-loved.

“It just shows you how attractive this market is,” said analyst Roger Entner of Recon Analytics. The Verizon Wireless deal would come on top of several other transactions in the billions just over the past year: Japan’s SoftBank bought control of Sprint for $21.6 billion, T-Mobile paid $1.5 billion plus stock for MetroPCS, and AT&T agreed to buy Leap Wireless at a total cost of nearly $1.2 billion.

“Everybody, from the big to the small, is betting on this market,” Entner said.

That’s because U.S. consumers are buying into mobile technology and services in a big way and looking to combine the wireless experience with wireline TV and broadband, he said.

“Americans are seeing the value of it,” Entner said. “We are leading the wireless broadband, and smartphone, and integrated communications world.”

Verizon just wants to put more money behind a good investment, Entner said. The deal might be coming together now partly because interest rates are expected to rise, increasing Verizon’s potential cost of borrowing to finance the buyout.

Taking full control of Verizon Wireless would also simplify the company’s management, eliminating the separate board of directors overseeing the mobile subsidiary and some redundant administrative functions. Bringing its wired and wireless businesses fully into one company might make it a bit easier for Verizon to offer combined services, he added.

“For the subscribers, I don’t think much will change,” Entner said. A wholly owned Verizon mobile business wouldn’t be significantly more competitive, either. Nor would Verizon’s debt load, reportedly $50 million or more, weaken the company. In time, the buyout would pay for itself, Entner said.

“At roughly $2,000 per subscriber, it’s not even outlandishly expensive,” he said. Cingular paid more per subscriber to acquire AT&T Wireless in 2004, according to Entner.

“For U.S. consumers, there won’t be any noticeable difference,” said Chetan Sharma, founder and president of Chetan Sharma Consulting.

Where a Verizon-Vodafone deal could have repercussions is in Europe, because Vodafone might use the proceeds to acquire weaker mobile operators there, Sharma said.

For Vodafone, a U.K.-based company that’s involved in mobile businesses on six continents, Verizon’s interest in buying now may be a lifeline.

“Vodafone’s core markets are in trouble as net revenue is declining,” Sharma wrote in an email interview. “It needs cash to shore up the assets in Western Europe.”

The company is also starting to focus on combined wired and wireless plays, such as its planned $10 billion acquisition of Kabel Deutschland, Germany’s biggest cable operator. The company aims to combine fixed broadband, mobile and TV on one bill, Enter said.

“What is finally motivating Vodafone is the implementation of their European integrated carrier strategy,” he said.

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Vodafone confirms talks on selling its Verizon Wireless stake

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Verizon to finally get the HTC One on August 22

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IBM, Verizon to compete for $10 billion in government cloud work

IBM, Verizon and eight other companies will compete for $10 billion worth of work to help move the U.S. Department of the Interior’s IT systems to the cloud.

The Department of Interior (DOI) anticipates saving over $100 million a year between 2016 and 2020 by shifting workloads from the 400 data centers that it now maintains.

“These contracts will not only allow us to move these apps to the cloud, but move them in a well-planned, methodical way,” wrote Andrew Jackson, DOI deputy assistant secretary for technology, information and business services, in a statement.

Ten companies have each been awarded an Indefinite Delivery Indefinite Quantity (IDIQ) contracts that will allow them to compete for individual task orders in building out the Interior Department’s cloud. AT&T, IBM, CGI Group, Unisys, Verizon, Lockheed Martin, Aquilent, Autonomic Resources, Global Technology Resources and Smartronix all were awarded contracts.

Typically with an IDIQ contract, a company is not awarded any money initially. An IDIQ is often referred to as a license to hunt, meaning that it is a set of terms that have been pre-negotiated between the vendor and the agency to expedite the process of issuing work orders.

With this IDIQ, the DOI will issue task orders for individual projects, which these 10 companies will compete for. Each company can be awarded up to $1 billion of work for DOI.

Other U.S. federal government agencies can use the IDIQ contract vehicle for their own work as well.

The first project under this contract vehicle will be to set up and host an SAP implementation. The agency will also issue task orders for virtual machines, storage, database hosting, secure file transfers, Web hosting, as well as for maintaining development and test environments.

The contract vehicle was scheduled to be issued in May, but was held up by a protest from a vendor that was not included in the final selection. CenturyLink argued that the contract wording was too vague to be truly competitive. The Court of Federal Claims struck down that challenge last week.

The DOI has been working with cloud computing for awhile. In 2012, the agency began consolidating all of its email and collaboration services to a cloud service, Google Apps for Government.

For IBM, the DOI contract is potentially the largest cloud computing job the company has been awarded. IBM expects that it will use the assets from its recent purchase of IaaS (infrastructure-as-a-service) provider Softlayer, which it plans to use in its Smart Cloud for Government hosted service.

Comprised of 16 bureaus and offices, the DOI oversees federal owned lands and U.S. natural resources, including 500 million acres of park lands. Its annual IT budget is more than $1 billion a year.

Joab Jackson covers enterprise software and general technology breaking news for the IDG News Service.
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