Updates on iPhone Availability (through Friday, October 11)

The charts are attached as pictures and a link to a PDF download is also new this week:

Headlines:

iPhone 11 availability improved wk/wk for T-Mobile and unchanged for the other carriers (with the exception of green, which is largely out of stock across the system).

iPhone 11 Pro is selling very well across the board (re: T-Mobile does not have $0 down on Pro or Pro Max).  AT&T lack of availability is particularly notable.  This should show up in better 4Q upgrade rates (not sure if they have compelling enough switching offers right now – likely that upgrades are driving the shortages).

iPhone 11 Pro Max.  Two surprises here – T-Mobile is still largely out of the Pro Max, as is AT&T.  Also, if someone is going to buy the Pro Max, they are going to buy the 512GB version (why buy Silver gasoline when you can afford Supreme?).

iPhone 11 Oct 11 availability

iPhone Pro Oct 11 availability

iPhone 11 Pro Max Oct 11 availability

iPhone availability as of Oct 11

 

 

What the D.C. Circuit Court of Appeals Ruling Means for (California) Consumers

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Greetings from New York City (aerial shot of Manhattan pictured), Philadelphia and Davidson/ Charlotte.  This week’s Sunday Brief is kind of lengthy but worth careful reading as we have entered a new phase of state-based regulation (many current and former local telephone employees are quietly thinking “History does repeat itself”).

This week, we briefly examine the impact of the D.C. Circuit Court of Appeals ruling on October 1 and look ahead to the provisions of California Bill SB 822.  As you will see, there’s a lot of interpretation required (telecom attorneys will be fully employed), but this will hopefully get folks thinking about the ultimate impacts of regulation to the consumer.  We also have several TSB follow ups.

We had a substantial positive reaction to last week’s TSB on three start-ups.  One note:  we had mistakenly reported that Starry had raised $130 million from three rounds; we were reminded that they closed their fourth round in September having raised $300 million from four rounds.  Also, a typo on Starry – they are using the lower part of the 37 GHz spectrum, not the 38 GHz spectrum.  Despite these corrections, we were very encouraged by the sharing and dialogue (for those of you who were thinking about sending in wireless financing arm Affirm as a suggestion, please hold your fire as we received several dozen “What about Affirm?” inquiries.  We promise to cover in our next round).

 

 

Internet Policy:  Our Communications “Light switch”

When I was a young child growing up in Manchester, CT (and later in Mohnton, PA), one of my favorite things to do was to play

switch pic

with the light switch. There’s something magical about creating light with a simple motion.  And, as the youngest of three (many of you are thinking “that explains everything about Patterson – he was the youngest”), I would frequently flicker the lights to annoy family members.  This would be accompanied by a sibling or, more likely, parental admonishment of “Stop it… You’ll break the switch.”

The Internet policy of the United States is our communications light switch.  Since 1998, we have applied erudite terms like “Title II” and “Information Services Provider” to make the flickering policy seem more mature.  But the switch position keeps changing, and, as discussed below, we are in danger of breaking the Internet through investment uncertainty.  Here’re some high-level definitions and chronology:

  1. Telecommunications Services Providers are subject to Title II regulation, which prohibits providers from engaging in “unjust or unreasonable practices.” This is not a stationary target. Today’s “just” practice (e.g., T-Mobile’s Binge On! Wireless service plan introduced in 2014, or Verizon’s Start Unlimited plan, which we discussed in a previous TSB) was initially viewed as “unjust or unreasonable” (more on the Electronic Frontier Foundation spat with John Legere in his blog post here and in this article here), but has changed with the passage of time.
  2. Commercial Mobile Services are subject to Title II regulations, while Private Mobile Services are not.

 

1996 (Clinton):  Telecommunications Act Passed by Congress

1998-2002 (Clinton/ George W. Bush):  Broadband is considered a Telecommunications Service subject to Title II.  DSL deployments continue; cable begins to trial High Speed Internet services using a common standard called DOCSIS (Data Over Cable Service Interface Specification)

2001:  CableLabs introduces DOCSIS 1.1 standard which incorporates Voice over IP capabilities.  Cable companies launch HSI services more aggressively starting in 2002/2003 (see why below).

2002-2015 (George W. Bush/ Obama):  Broadband is now considered an Information Service and subject to less regulation (The Supreme Court upholds this designation in the Brand X decision).

2015-2018 (Obama/ Trump)Broadband is re-recategorized as a Telecommunications Service (again subject to Title II) and, more importantly, mobile broadband is categorized as a Commercial Mobile Service and subject to “unjust or unreasonable practices” determinations.

2018 (Trump): Broadband is re-re-recategorized as an Information Service and mobile broadband as a Private Mobile Service.  This re-re-recategorization triggered the lawsuit from Mozilla which was heard in the DC Circuit Court of Appeals.

 

Four changes in 20 years may not seem like a lot compared to the news cycle swirl we see today.  And, as Craig Moffett pointed out in a note this week, each administration party change is likely to reverse the previous one.  That’s not good commercial policy, but rather light flickering, and eventually the switch will break.  In the process, the ability to create meaningful competition and superior customer experiences is sidelined by politics.  More on possible solutions below.

 

What the DC Circuit Court Ruled

The DC circuit ruled as follows:

We uphold the 2018 Order, with two exceptions. First, the Court concludes that the Commission has not shown legal authority to issue its Preemption Directive, which would have barred states from imposing any rule or requirement that the Commission “repealed or decided to refrain from imposing” in the Order or that is “more stringent” than the Order. 2018 Order ¶ 195. The Court accordingly vacates that portion of the Order. Second, we remand the Order to the agency on three discrete issues: (1) The Order failed to examine the implications of its decisions for public safety; (2) the Order does not sufficiently explain what reclassification will mean for regulation of pole attachments; and (3) the agency did not adequately address Petitioners’ concerns about the effects of broadband reclassification on the Lifeline Program.

Simply put, a blanket FCC preemption on what the states can (or cannot) do is ruled out.  But, as Roger Entner points out in this Fierce Wireless piece and Craig Moffett points out in his note, the FCC can challenge any rules after they are approved by the state (state-by-state preemption not ruled out).

jessica r tweet threadThe reaction to the ruling is best summarized by FCC Commissioner Jessica Rosenworcel in a series of Tweets shown nearby.  She also issued a short press release (here) saying, “When the FCC rolled back net neutrality it was on the wrong side of the American people and the wrong side of history.  Today’s court decision shows that the agency also got it wrong on the law.  The agency made a mess when it gave broadband providers the power to block websites, throttle services, and censor online content.”

Former FCC Chairman Tom Wheeler (a subject of many TSBs from 2013-2016) wrote a tersely worded editorial in The New York Times stating:

The (D.C. Circuit Court) decision opens the doors for states to fill the regulatory void. Internet service providers should be quaking in their boots: As of today, they run the serious risk that they’ll have to follow a patchwork of different state requirements. The companies may not have liked the previous administration’s decision to classify them as common carriers, but that at least provided them with a uniform national policy. That is now gone.

As of this writing, five states have enacted net neutrality legislation:  California, Washington, Oregon, Vermont, and New Jersey, and another 29 states have some form of legislation pending.  The self-proclaimed “gold standard” of state legislation, however, is California.  The California Internet Consumer Protection and Net Neutrality Act of 2018 does the following (full legislation here):

This act would prohibit fixed and mobile Internet service providers, as defined, that provide broadband Internet access service, as defined, from engaging in specified actions concerning the treatment of Internet traffic. The act would prohibit, among other things, blocking lawful content, applications, services, or nonharmful devices, impairing or degrading lawful Internet traffic on the basis of Internet content, application, or service, or use of a nonharmful device, and specified practices relating to zero-rating, as defined. It would also prohibit fixed and mobile Internet service providers from offering or providing services other than broadband Internet access service that are delivered over the same last-mile connection as the broadband Internet access service, if those services have the purpose or effect of evading the above-described prohibitions or negatively affect the performance of broadband Internet access service.

The California legislation is very broad.  Of particular interest is their definition of Reasonable Network Management (emphasis added):

“Reasonable network management” means a network management practice that is reasonable. A network management practice is a practice that has a primarily technical network management justification but does not include other business practices. A network management practice is reasonable if it is primarily used for, and tailored to, achieving a legitimate network management purpose, taking into account the particular network architecture and technology of the broadband Internet access service, and is as application-agnostic as possible

This definition appears to obviate two common practices:  a) bit prioritization, which is the practice of slowing down unlimited plan users after certain thresholds are reached (as there is no technical network management justification for this practice at 5 a.m. on a non-congested highway), and b) throttling, which slows down speeds as a result of a business service plan parameter as opposed to a network parameter (this is especially important to service providers like Xfinity Mobile who would rather not offer Hotspot service than to have their current throttled service rendered illegal).

The impact of this bill (unless overturned by the ISP lawsuit immediately filed after the bill was signed into law) will be as follows:

  1. California wireless subscribers who are being throttled will have to select new plans provided by the carriers (we presume the new plans will be capped and include overage charges)
  2. It is unclear if per device proof that throttled traffic is not going to degrade service is an acceptable network management practice. Regardless, as we have discussed in many TSBs, devices are increasingly becoming 1080p (or higher) resolution.  Prohibiting a lower resolution in exchange for a lower price would be the law of the Golden State.  (As reference, 480p video uses 3-4x less data then 720p video and 10x less data than 1080p video.  Ironically, preventing video resolution throttling could create a significant network management event which would likely require prioritization as an acceptable network practice!)
  3. Hotspot services will either be dropped entirely from plans (this would likely include all hotspot plans that contain video throttles) or significantly modified. With no overall throttle or bit prioritization for exceeding thresholds, it’s likely that there will need to be hard caps and overage charges for all hotspot plans
  4. The impact on the MVNO community is unknown (which is one reason why Comcast and Charter are a part of the ISP lawsuit). For providers like California-based Mint Mobile, who have throttles after certain high speed allocations are met, they could either impose overages or (presumably) gain throttling consent from the consumer if there’s a day or two left prior to the commencement of a new billing cycle (note: it does not appear that the California bill allows consumers to choose lower-cost plans where their data is prioritized and video traffic is throttled – any prioritization that is not network management related is prohibited)
  5. This would make “by the Gig” plans the network standard and likely lead to a higher-priced unlimited service (our guess is ~$20 more per line, likely assessed via a California-based surcharge). It would make Comcast, Spectrum, and other MVNO providers less effective in their marketing efforts ($65/ line is less attractive).  Ironically, as California ramps up efforts to prevent the T-Mobile/ Sprint merger, this bill would halt the expansion of MVNOs in the Golden State.
  6. All California plans would need to be converted to “by the Gig” with hard stops on usage. Unlimited plans, if they exist, would likely be very expensive, and wireless service dependency would shrink.

The above analysis is from a several hour scouring of the California bill and interpretations like the one seen here from the National Law Review.  I am sure that the ramifications have been thought through, but, if it results in no throttling after certain caps are reached, no throttling based on the business service plan (e.g., non-network management) and no throttling of any sort for Hotspot services, the California consumer is in for a big surcharge.  That’s what the D.C. Circuit Court ruling means for consumers.

TSB Follow-Ups

state of Mississippi coverage rootmetrics

  1. Magenta Loves Magnolias – Mississippi AG negotiates a coverage deal in exchange for merger support. In an unsurprising move (32nd least dense state in the US), the Magnolia State changed their tone on the T-Mobile/ Sprint merger.  In exchange for average speed commitments (100 Mbps or higher) to 62% of the population within three years, and 92% within six years, Mississippi signed on to the DOJ consent decree.

 

Both T-Mobile’s and Sprint’s coverage in the state follows interstate highways and the state capital (see RootMetrics coverage for Jackson here and for the state here and in the nearby pic – there is a very big difference between the two for Magenta).  However, T-Mobile has strong 600 MHz spectrum holdings that cover the state (Spectrum Omega map here).

 

  1. Seven economists say the DOJ was wrong. On Thursday, the NET Institute, a not-for-profit institution that counts Google, Microsoft, and AT&T as donors, submitted a white paper in which they state “the Proposed Final Judgment cannot and will not address the anticompetitive harms identified in the Complaint, or restore the ex ante competitive conditions in the affected antitrust product markets.”

 

Having just written on the topic, we read their comments in great detail, and found many of the same arguments that opponents of the merger have been making.  We hashed through the reasons why we think the state AG case is weak in a previous TSB here, but one point is particularly worth examining.  The paper goes down an unusual rabbit hole where it seems to imply that the scale produced by the merger of T-Mobile and Sprint would not result in unit cost reductions.  From the paper:

 

Having reviewed the record evidence presented by the merging parties in the FCC proceeding, we… conclude that there is no compelling evidence that the merger would reduce the marginal costs of New T-Mobile.

 

The economists then go on to explain in a footnote what marginal costs represent (the cost of the last minute or megabyte produced).  This is very disturbing to those who have worked in the industry.  Wireless economics are particularly dependent on equipment purchasing economics (the infamous “discount to MSRP rate” which any telecom expert can attest is a lot easier to negotiate if you are a large vs small carrier), tower-to switch connectivity (usually fiber access – more MB using the same fiber strand would lower per MB costs.  In the event of a traditional circuit, the next bandwidth size usually comes at a per unit discount of 30-50%), router/ port size (same as the bandwidth levels), and data center connectivity costs (more MB using the same or slightly larger number of servers/ racks lowers the total unit costs).

 

This excludes the fact that scale brings entirely new aggregation options.  For example, if Sprint did not have a presence at the Spectrum Center Distributed Antenna System (this is the Charlotte Hornets arena) and, as a result of the merger, they now were able to use this efficient infrastructure at a lower cost, the unit cost would be lower.

 

Perhaps the argument could be that the regional or allocated costs would be lowered with the scale attributable to the merger, but the next unit would cost the same.  That is only true if no aggregation opportunities and no purchasing power exist as a result of the increased scale.

 

Well-articulated arguments can be crafted on poor assumptions.  That appears to be the case with this paper.  Dish execution arguments aside, it’s weak because it fails to incorporate real world experience designing and engineering data and broadband networks.

 

  1. AT&T Announces that they will be deploying stand-alone 5G networks in 2020. In this Light Reading article, AT&T announces that they will complete their standalone 5G core network in the 2020-2021 timeframe.  The biggest impact from this announcement is not its effect on AT&T per se, but its impact on Dish as they seek to solely deploy a 5G standalone network.  With AT&T on target to deploy in the next 24 months, a Dish initial rollout by the end of 2021 is entirely possible.

 

  1. AT&T also announced the widely anticipated sale of its Puerto Rican/ Virgin Islands properties to Liberty Global, a broadband provider in Puerto Rico (news release here). The purchase price of $1.96 billion in cash was also in line (although on the low end) with estimates.  The sale to Liberty will create a strong bundled service provider in the region just as T-Mobile launches its new fixed wireless product.

 

  1. Another premium smartphone with CBRS launches next Friday. The OnePlus 7T, a $599 device with a Qualcomm 855 Plus (up to 2.96 GHz) processor, 8 GB of internal memory, and a 48 Megapixel triple lens camera now has the latest network – CBRS (LTE Band 48).  Interestingly, the device does not have 802.11ax, also known as Wi-Fi 6.  The next generation of Google Pixel is expected to be launched this week and, if reports are true, will likely have CBRS and 5G capabilities as well.

Because of space issues, we will be attaching the latest Apple device availability charts and posting on the TSB website with commentary.  We will continue to update next week and promise more commentary then.

That’s it for this week.  Next week, we will provide ten questions we want to see answered in the analyst calls.  Until then, if you have friends who would like to be on the email distribution, please have them send an email to sundaybrief@gmail.com and we will include them on the list.

 

Have a terrific week… and GO CHIEFS!

Update on Apple iPhone 11 Availability

We ran out of time and space to fully cover changes in iPhone 11 availability in this week’s TSB, so we are taking some space normally reserved for the “Deeper” section to cover the changes.

Please note that availability changes from day to day and certain color/ size combinations can become scarce and/or abundant within a week.  However, as we will discuss below, there are some real trends to follow here.

First, let’s look at the iPhone 11 availability for T-Mobile, AT&T and Verizon (their online website is the source):

Here’s the Sept 27 chart:

iPhone availability Sept 27

Here’s the Oct 4 chart (note that axis has changed to reflect the week that has passed):

iPhone 11 availability Oct 4

Easy takeaways:

  1.  T-Mobile inventory is challenged, even with unpopular Red and Black colors.
  2.  New colors (Green, Purple) are more popular across the board as expected
  3.  Black and Red are in abundant supply
  4.  The $50 lower price for the iPhone 11 is bringing in a few more upgrades

It’s not surprising that T-Mobile is pushing the iPhone 11 over devices such as the iPhone 8 (which does not have 600 MHz/ LTE Band 71).

Now the iPhone 11 Pro:

iPhone 11 Pro availability Sept 27

iPhone Pro 11 availability Oct 4

Discerning trends here is a bit tougher.  Midnight Green is a popular color (no surprise here) – Gold less so.  Wait lists are generally slipping with time (this is likely what drove Apple to increase their orders by 10%).

It’s important to remember that T-Mobile does not offer 0% down on either the iPhone Pro or the iPhone Pro Max (0% is available for the qualifying customers of unlocked iPhone 11 devices in Apple Stores).  Despite that, Magenta appears to be very strong sellers of the iPhone 11 Pro and iPhone 11 Pro Max

iPhone Pro Max availability Sept 27

iPhone Pro Max availability Oct 4

The popularity of the iPhone 11 Pro Max at T-Mobile is very apparent from this last set of slides.  Interestingly, the only carrier with any inventory of the iPhone 11 Pro Max is Verizon (in silver and gold only).

What does this tell us about gross/ net additions?  Not much.  Shortages could exist because of conservative product/ supply chain assumptions as much as they could exist due to strong demand.  But there’s far more demand broadly than most anticipated, and, with the exception of a few color/ storage combinations, availability appears to be slipping day for day.

Next update will be next Sunday.  If you would like the full file, please email sundaybrief@gmail.com and we’ll gladly send.

Thanks again for your readership.

Three Up and Comers

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Greetings from Charlotte/Davidson, Norfolk/ Virginia Beach, Washington DC/ N Virginia, and Dallas/ Ft. Worth (picture is yours truly with Federated Wireless BoD member Tim McDonald).  This week’s TSB will focus on several start-ups that we think deserve attention.  We will also have several TSB Follow-Ups.

 

Three Up and Comers

Identifying disruptive telecom start-ups is a challenging topic to say the least, and we recently covered one, Federated Wireless, with its $51 million C-round raise.  Given high infrastructure barriers to entry, new fiber and service providers are scarce.  We will highlight a few companies who are bucking the trend and could challenge incumbents:

 

  1. Starry Internet (Boston, MA). Total Capital Raised = $300 million (4 rounds).  Principal funders include Tiger Global Management, Quantum Strategic Partners, KKR, IAC, HLVP, and FirstMark Capital.

 

Starry was the brainchild of Chet Kanojia, who was also the lead for TV-streaming service Aereo which sold to Tivo in a fire sale after losing a court case (relive that 2014 moment through this Ars Technica article).  Starry currently uses 37 GHz (LMDS) spectrum to offer their service and uses a Starry Point rooftop connection and existing inside wiring to bring connectivity to individual customers (see pic below).

starry diagram

Their service is focused on Multi-Dwelling Units (think fewer users per Wi-Fi Access Point);  customers must use the Starry-provided router (Starry Station).  $50 covers 200 Mbps symmetric service as well as all taxes and fees (roughly $30/ mo. less expensive than traditional cable costs).

Per their website, Starry is currently offered in New York, Los Angeles, Boston, Denver, and Washington DC.  Starry announced plans to expand to 13 additional LMDS-based markets including Chicago, Cleveland, Seattle and Indianapolis (total of 18) but there have been no public announcements of new launches.

Starry did participate, however, in the recently completed 24 GHz license auction (see their announcement here) and obtained additional licenses covering 25 million new homes passed (40 million population new from auction; 60 million total population across 40 million homes).  New markets include Cincinnati, Las Vegas, San Antonio, Nashville, Charlotte, Rochester, Buffalo, and Louisville.  Interestingly, many of the new markets are not traditionally home to dense multi-dwelling unit concentration (this implies a point-to-multipoint strategy that involves many more points).

 

Bottom line:  Starry is an intriguing company and using 802.11ax (Wi-Fi 6) is an extremely wise technology choice.  Their focus on gaining ~ 20 million total customers through Multi-Dwelling Units keeps them focused.  Oppenheimer recently conducted an analysis which indicated that Starry should be able to keep to their $20/ home passed capital number.  The company becomes even more valuable as 5G stand-alone radios emerge at lower price points.

However, Google is slowly but surely entering this market through their Webpass subsidiary (see Austin expansion announcement here).  The very early reaction to T-Mobile Home has been nothing short of ecstatic (see Light Reading article here), and Verizon and AT&T will be increasing their speeds and associated offerings.  The market is about to get very crowded for fixed wireless and bundling with mobile services is likely to be the norm.  This may make a $50 for 200 Mbps stand-alone offering more difficult to stomach.

 

 

  1. Cologix (Denver, CO). Total capital raised = $500 million+.  Principal funders are now Stonepeak Infrastructure Partners and Mubadala Investment Company, an Abu Dhabi sovereign fund with nearly $230 billion in assets under management.

 

Cologix is a neutral-host data center company operating across 10 North American markets (32 total data centers).  Per their website, half of the 32 are located in Montreal, Toronto and Vancouver.

cologix pic

As the map shows (note; an updated version of this map would include Ashburn, VA), they have a relatively unique focus, with presence in Dallas but not Houston/ Austin/ San Antonio, Minneapolis but not Chicago, Jacksonville/ Lakeland but not Miami, Tampa or Atlanta.  And no Phoenix, Los Angeles, Seattle/ Portland, or Silicon Valley.  A good way to summarize their market footprint is “deep over wide.”  Stonepeak, who also owns Vertical Bridge (wireless infrastructure) and Extenet (in-building and small cell infrastructure provider) is a very large infrastructure fund with top-tier management.

Their Sept 23rd announcement resonated across the data center industry: $500 million to expand, and Stonepeak would not lose their ownership stake in Cologix.  Having grown considerably through acquisition, Cologix now has the capital to add several more markets to its footprint.

The biggest question at this point is “What price?”  Public valuations in the data center space have widely recovered from 2017/2018 levels, and Stonepeak is not an “at any costs” private equity firm.  To gain scale, they could go smaller market (taking a stake in a company like EdgeConnex who has a complementary global footprint) or focus on a few leading data center assets such as Switch (a large acquisition), Tierpoint or Flexential (both easier to stomach acquisitions).

Bottom line:  Cologix is a compelling story with a good management team and dense second-tier locations.  Acquisition selection and integration determine whether they rise to the level of global mega-players such as Equinix and Digital Realty Trust.

 

  1. The Helium Network (San Francisco, CA). Total capital raised = $54 million.  Main funders include Google Ventures, Union Square Ventures, Khosla Ventures, Mark Benioff, Munich RE/ HSB, FirstMark Capital and Multicoin Capital.

 

One of the most interesting start-ups to challenge the status quo in the last decade is Helium.  I first got to know the company about a year ago while I was doing some research on low-powered networks.  The company was still in pre-launch and going through capital like mad, so I basically left them for Silicon Valley dead even through they had powerful founders (Shawn Fanning of Napster fame) and investors (see above).

The company asks current broadband customers to plug something called a Helium helium hotspot picHotspot into their current wireless router (it also requires AC power, but its website claims the Hotspots consume as much power as a lightbulb).  Each Heluim Hotspot costs $495 and customers are paid for their value added via a cryptocurrency called Helium (more on this in the Helium blogpost here which includes a revaluing of the currency).

Approximately 100-200 well-placed Hotspots are required to blanket most cities (Austin, Helium’s first fully launched market, required ~100, but there are another 110 active to make the network as robust as possible).

Helium uses the 900 MHz network in the United States.  This network is open and available for low-power transmission (5 Kbps).  There are many current device applications for Helium (Lime scooters, dog collars, water cooler levels, bikes, in-building air quality, and trackers of all shapes and sizes) and this list promises to grow.

Because of the low bandwidth requirements, Helium will not drive broadband users over a cap.   But the value of the service (crypto is hard to explain) needs to be targeted.  What’s most interesting about the service is that if Helium can achieve connectivity on a large scale (and it likely can do so very quickly after a few trials), new IoT inventions will not be constrained by high connectivity costs.

Bottom line:  The 900 MHz spectrum band has been fallow for some time, and Helium (and Amazon Sidewalk) are now going after it in a big way.  Helium has a first-class team and, according to early reviews of the service, has developed an easy to provision/ install, easy to track interface.  While they have not raised as much money as the other companies discussed in this TSB, they may have the fastest path to market dominance.

There are dozens more companies to cover, but these three stuck out as ones that could alter the addressable markets of traditional infrastructure and communications companies.  We welcome your thoughts and ideas for additional companies to cover in the future (using a $50 million minimum funding rule as the deciding factor for inclusion).

 

TSB Follow-Ups

  1. T-Mobile/ Sprint Merger has their third vote, and a key state (Florida) signs on to the Department of Justice consent decree. Late last Friday, Bloomberg reported that a third commissioner (Carr) had voted for the merger, and that neither of the Democrat commissioners had yet cast a vote.  It is likely that a formal vote will occur prior to October 16, though many associations have called for the Commission to delay their vote until allegations of Sprint’s wrongdoing with respect to subsidy payment violations have been fully vetted.

In addition to this good news heading into the weekend, the merger also received a boost from Florida Attorney General Ashley Moody, who announced that the Sunshine State had signed on to the terms of the DOJ consent decree.  Kansas, Nebraska, Oklahoma, South Dakota, and Ohio were the original states to sign the July 26 decree, and Louisiana has also joined since then.  It will be interesting to see which additional states join the DOJ or the 18 states (and District of Columbia) suing to block the merger.

 

  1. There was a major ruling upholding much of the Net Neutrality provisions this week, with additional activity likely pushed back to states. Here’s an excellent article summarizing the D.C. Court of Appeals decision from the New York Times.  If you would like to read the decision in its entirety, it’s here.  If you would like to read Roger Entner’s take on the decision (I agree with his take), it’s here.  I have not read the full transcript of the Court’s decision, but promise to comment on it more this week.

 

  1. In a surprise move, Apple requested a 10% increase in iPhone 11 and iPhone 11 Pro production. A good article summarizing their decision is here.  TSB readers who fully digested last week’s issues are not surprised.  I have attached the latest changes in inventory to the TSB and will post more on this on the web version (sundaybrief.com).  T-Mobile appears to have the greatest backlog, which, as we noted last week, is surprising given their upfront deposits on the iPhone 11 and iPhone 11 Pro Max.

 

Final Note

Many thanks to those of you who suggested additional titles for the History of Technology.  As of Saturday, October 5, we have the following 10 recommendations:

We will publish a final list at the end of October.  Please get your entries in by October 25 by sending an email to sundaybrief@gmail.com or responding to this LinkedIn post.

 

Next week we will cover additional industry events and news of the week.  Until then, if you have friends who would like to be on the email distribution, please have them send an email to sundaybrief@gmail.com and we will include them on the list.

 

Have a terrific week… and GO CHIEFS!

The Case Against the T-Mobile/ Sprint Merger

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Greetings from Davidson, North Carolina, and Virginia Beach, Virginia (sunrise pictured), where we are enjoying several days of R&R prior to two weeks of travel.  This week’s TSB will contain an update on and a detailed analysis of the state attorneys general case against the T-Mobile/ Sprint merger.  We will also have several TSB Follow-Ups.

 

Many thanks to those of you who suggested additional titles for the History of Technology.  Next week, we will provide an amended list of the top six most important telecommunications and technology chronicles.  If you have additional suggestions, please send them to sundaybrief@gmail.com.

 

The Implications of This Case are Significant

One of the most important events to impact the telecom industry for the next decade is the now nineteen state attorneys general lawsuit against T-Mobile USA and Sprint (copy here).  If the attorneys general successfully prosecute their case, Sprint will need to find another merger partner or significantly restructure their balance sheet.  If the wireless companies win, new T-Mobile will prove a formidable challenger to AT&T and Verizon in postpaid and enterprise, and prepaid (or credit-challenged) wireless subscribers could see higher prices or reduced service quality.

 

We devoted an issue to the trial in early August and believe that an update is warranted.  This week’s TSB examines the details of the complaint and provides insight into possible outcomes.

 

Case Timeline

The case was originally filed in the Southern District of New York on June 11 (this date is prior to the late July DOJ settlement but after FCC Chairman Pai publicly supported the merger with conditions) by nine state attorneys general and the District of Columbia.  Ten days later an additional four states joined the amended complaint.

 

Texas’ Republican attorney general, Ken Paxton, joined the lawsuit on August 1 after fully reviewing the Department of Justice settlement with the merging parties and Dish networks.  “After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon” stated Attorney General Paxton.  The Lone Star State continues to be the lone Republican attorney general in the complaint.  After Texas joined, the trial start date was moved form October 7 to December 9.  The case continues to be expected to last 2-3 letita james tweetweeks.  140 hours of total depositions were allowed by the judge.

 

After Texas joined the party, Oregon (Aug 12), Illinois (Sept 3), and Pennsylvania (Sept 18) added their support.  Notable population centers not participating in the lawsuit are Florida, Georgia, North and South Carolina, Washington (T-Mobile HQ), Ohio, Missouri (de facto Sprint HQ) and Arizona.

 

The Case Against the Merger

The states make the following arguments in their June 11 complaint:

 

  1. The merger of T-Mobile and Sprint would lessen competition. Based on redacted documents discussed in the complaint, it has been a long-held view of Deutsche Telekom and T-Mobile USA that market rationalization (four to three providers) would lead to higher profitability.
    1. Contained in the competition arguments is the implication that Sprint is capitalized to continue their aggressive rollout of 5G services nationwide.
    2. Also contained in these arguments is the assumption that a roaming deal between T-Mobile and Sprint would enable Sprint to cost-effectively fill in coverage and speed gaps until Sprint could economically supplement their network.

 

  1. MVNOs are not long-term competitors because they are subject to a shrinking number of networks who will wholesale to them. Specifically, the lawsuit points out that T-Mobile currently does not permit an MVNO to have core control.  The Dish agreement will apparently be the exception to this rule.

 

  1. While the new T-Mobile will likely provide a broadband replacement product, that is not a relevant determinant (or offset) to the lack of competition that will occur in mobile wireless services. Any fixed wireless offsets should not count in the competitiveness calculation.

 

  1. The merger, even with the divestiture of Boost Mobile, would also provide the new
    new york cellular market area 1

    CMA 1 includes New York City and Long Island

    company with a dominant market share in two large Cellular Market Areas (CMAs) – New York City (CMA #1 shown nearby) and Los Angeles (note that these data points represent two highly dense incumbent telco areas of AT&T and Verizon).

    1. The new entity would also have significant pro forma market share in Austin, Dallas, Houston, and San Antonio, TX; San Francisco, San Jose, San Diego, and Sacramento, CA; Tampa/ St. Petersburg, Orlando, and Miami, FL; Chicago, IL; Washington, DC, Baltimore, MD and Philadelphia, PA; Detroit, MI; Minneapolis, MN, and many other areas represented by the states that have joined in the case.  While the numbers have been redacted, the largest gains appear to be in Los Angeles, New York City, Chicago, Houston, Atlanta, Miami, Detroit, and Tampa/ St. Pete.

 

  1. While there will be significant activity occurring post-merger, this activity will not spur the type of innovation needed to provide lower prices and higher quality services to credit-challenged, low income, prepaid wireless subscribers.

 

In addition to the document, Fox Business News is reporting that the states are preparing an argument that Dish, even with the terms of the deal we discussed in a previous TSB entitled “Playing Charlie’s Hand”, will be a financially weaker competitor than a non-merged Sprint.

 

Reframing and Refocusing the Argument

The state attorneys general make an average to weak case to prevent the merger of T-Mobile and Sprint.  Without a doubt, merging the third and fourth largest wireless carriers will create more competition for Verizon and AT&T with respect to multi-line, enterprise, and state government segments.  However, to contend that Verizon and AT&T have no competitive counterpunch in New York and Los Angeles is laughable.

 

Imagine the cross-examination of Ronan Dunne, Verizon’s CEO of their Consumer Group, or of Jeff McElfresh, the new CEO of AT&T Communications, concerning their respective companies’  competitiveness in their two most densely populated markets:

 

  • How much has AT&T/ Verizon invested in New York/ Los Angeles in the last decade?
  • Specifically, how much has your company spent with tower company leases, how many route miles of fiber, etc., in New York City and Los Angeles (these figures would include enterprise and government spending on infrastructure that could be leveraged)?
  • How successful has your company been with wired broadband deployment in these markets?
  • What is the state of under-utilization in these markets? How easy would it be to upgrade tower and backhaul infrastructure to make these markets more competitive? How long would it take?
  • How dependent are these markets on deploying a successful 5G strategy?

 

The answers will significantly diminish the argument that New York and Los Angeles (or any other major metropolitan market) are going to be markedly impacted by less investment.  Even if Boost faltered (and we have highlighted the execution risks that will occur with the transition from legacy Sprint to new Dish networks), Cricket (AT&T’s MVNO), Visible (Verizon MVNO started by ex-Verizon execs), Xfinity Mobile (Verizon MVNO), Spectrum Mobile (Verizon MVNO with core control ambitions), Altice Mobile (Sprint and AT&T MVNO with core control capabilities), Mint Mobile (T-Mobile MVNO), and Tracfone (a multi-carrier MVNO doing business as Wal Mart’s Straight Talk or as Ready Mobile) would jump at the opportunity to pick up 1-3-5 market share points.   Bottom line:  The reason why T-Mobile’s share is great in New York and Los Angeles is that they built robust networks and effective distribution channels in these markets.  Distribution barriers to entry for large, well-funded competitors are low.  As a result, the possibility, driven by new network (5G) deployment, that Verizon and AT&T, either on a retail basis or through MVNOs of their own, reverse the market share gains T-Mobile and Sprint have achieved over the past decade are high.  Distribution will follow investment.

 

On top of this, however, is the increased discussion of competition the new T-Mobile will provide in rural markets.  T-Mobile committed to deploy 100 Mbps speeds to 67% of the US rural population in six years.  From a competitive perspective, less densely populated areas have a longer payback because the addressable market (homes passed, number of wireless subscribers, machine-2-machine connected devices) is smaller.  Verizon and AT&T have enjoyed duopoly returns (which, when unregulated, can be greater than regulated monopoly returns), especially where they are also the incumbent telecommunications provider.  Bottom line:  The competitiveness ledger needs to account for the overwhelmingly positive impact the new T-Mobile’s commitment will have on widely dispersed markets.  This is not to diminish the need to serve poorer urban communities, but to acknowledge the increased risks taken in areas where few homes and people exist.

 

Finally, the likelihood of substantial interest in Dish’s new business model is underestimated.  Without going into all of the cost savings details of deploying the next generation of 5G standards (called Stand Alone 5G), Dish was smart to hold firm to having the option to deploy new systems when the lower cost structure was available.  (Here’s a very interesting article showing that there is increased interest among the carrier community in deploying Stand Alone 5G standards – it will quickly become the default configuration, and Dish will be a direct beneficiary).  It is difficult to imagine that a data-centric network will be unattractive to others, and that (gasp) it might be perfectly paired with the regional networks deployed by cable to support their MVNOs.  Bottom line:  Only the most delusional industry analysts think that Sprint can emerge from a failed merger without a recapitalization/ reorganization.  That will cost the telecom industry more than the risk of Dish building out their network (including 800 MHz from Sprint) and failing.  Trading the risk of a much less expensive new network build for the certainty of the long-term financial damage done through an inevitable Chapter 11 reorganization is rational and reasonable.

 

The trial date is a little more than two months away, and, from a thorough read of the initial and amended documentation, there’s no reason why the parties should not settle.  The attorneys general should focus their efforts on how to make Dish more successful, and not on how to maintain the status quo.

 

(For those of you who want to view some good dialogue supporting the settlement from Assistant Attorney General Makan Delrahim, this YouTube video of the September 17 Senate Judiciary Committee Hearing has two very interesting dialogues at minute 20 with Senator Klobuchar and at minute 54 with Senator Leahy).

 

TSB Follow-Ups

  1. Faster speeds for the same price: Comcast does it again.  The Internet provider raised their speeds on four offerings across 11 states last week:

 

— Performance Plus increased from 60 Mbps to 75 Mbps

— Performance Pro increased from 150 Mbps to 175 Mbps

— Blast! Pro increased from 250 Mbps to 275 Mbps

— Extreme Pro increased from 400 Mbps to 500 Mbps

 

This represents the 17th time in the past 18 years that Comcast has increased speeds.  Approximately 85% of Comcast’s 25.6 million (end of 2Q 2019) subscribers will see this increase.   This turns up the heat on their telco competitors to match the speed growth and increase their fiber builds.  It also means that many more Xfinity subscribers will enjoy higher speeds/performance working from home than at the office.  More on the speed increases from this GeekWire article.

 

  1. CableLabs announces that they will be releasing the DOCSIS 4.0 standards in early 2020 (CableLabs blog post here). These standards will improve the total capacity available in an existing cable connection (using a technology innovation called Extended Spectrum DOCSIS) and also improve the utilization within the current DOCSIS 3.1 capacities through a development called Full Duplex DOCSIS.

 

At a minimum, these changes will double maximum speeds from the 1 Gbps in the current standard.  Assuming that the rollout of the standard leads to the first product deployment by the end of 2021, millions of existing customers will have the ability to have increased home and small business capacity.

 

  1. Apple iPhone 11, iPhone 11 Pro, and iPhone 11 Pro Plus online availability updates. Attached and shown below are the online inventory levels as of Friday, September 27.  Updates are compared to Tuesday, September 24 levels.  Generally speaking, iPhone 11 levels are remaining stable with immediate availability of certain colors and sizes for AT&T and Verizon (green and yellow are the most popular colors).  T-Mobile has less availability of the iPhone 11 due to their aggressive iPhone trade-in credit promotion (at least $350 for iPhone 7 and higher).  Magenta has more incentive to move customers to the latest devices (versus the iPhone 8 or earlier) due to the 600 MHz availability (which started with last year’s XR and XS/ XS Max models).

iphone 11 availability

iphone 11 pro availability

iphone 11 pro max availability

T-Mobile’s online shortages continue into the iPhone 11 Pro and 11 Pro Max.  This is more surprising given the fact that all T-Mobile customers who want to purchase these devices need to pay something upfront (no $0 down offer).  The iPhone 11 Pro carries a $249-599 upfront payment, and the iPhone 11 Pro Max carries a $349-699 upfront payment.

 

We will be updating this weekly in partnership with Wave7 Research.  Note: in-store inventory levels will differ from online availability.

 

 

 

  1. Trial Balloon? DirecTV signals NFL Sunday Ticket exclusivity may be ending.  Late Friday afternoon, the Wall Street Journal reported that AT&T is seriously looking at not renewing exclusivity for the DirecTV Sunday Ticket product.  Based on estimates outlined in the article, Sunday Ticket is generates approximately $900 million in annual revenues (~2% of AT&T’s Entertainment Group) with about $1.5 billion in total costs (the Entertainment Group EBITDA would rise ~5% if the exclusivity costs were eliminated and AT&T broke even on the product).

 

Next week, we will cover several investments being made in the VC/start-up world that have the potential to influence the telecommunications landscape.  Until then, if you have friends who would like to be on the email distribution, please have them send an email to sundaybrief@gmail.com and we will include them on the list.

 

Have a terrific week… and GO CHIEFS!

What Matters in Wireline – Enterprise, Expense Management and Extinction

opening pic sept 22Greetings from the Queen City, where the IT scene is red hot even though cooler fall temperatures have finally arrived. I was pleased to be the guest of San Mateo-based Aryaka Networks at the 2019 Orbie (CIO of the Year) awards on Friday.  It was great to catch up with many folks in attendance including Karen Freitag (pictured), a Sprint Wholesale alum and the Chief Revenue Officer at Aryaka.

This week, we will dive into drivers of wireline earnings.  At the end of this week’s TSB, we will comment on several previous briefs (including the AT&T Elliott Memo fallout) in a new standing section called “TSB Follow Ups.” We close this week’s TSB with a special opportunity for reader participation.

Wireline Earnings:  Enterprise, Expense Management, and Extinction

One of my favorite things to write about in the TSB is wireline – that forgotten side of telecom and infrastructure that serves as the foundation for nearly all wireless services.  Wireline is a case study in competition, regulation, cannibalization, innovation, and a few other “-tions” that you can fill in as we explore the following dynamics:

  1. Residential broadband market share (measured by net additions). Before the Sunday Brief went off the air in June 2016, cable was taking more than 100% share of net additions.  This means that customers were leaving incumbent telco DSL (and possibly FiOS) faster than new customers were signing up.  At the end of 2018, cable continued its dominance with 2.9 million net adds compared to 400 thousand net losses for telcos (see nearby chart.  Source is Leichtman Research – their news release is here).  If this trend holds through the end of the month, it will mark 18 straight quarters where cable has accounted for more than 95% of net additions (Source: MoffettNathanson research).

leichtman broadband end of 2018 estimates

To be fair to the telcos, all of 2018’s losses can be attributed to two carriers: CenturyLink and Frontier.  We have been through the Frontier debacle twice in the last three months and will not retrace our steps in this week’s TSB (read up on it here).

But CenturyLink is a different story, with losses coming in areas like Phoenix (where Cox is lower priced), Las Vegas (Cox lower priced except for 1Gbps tier), and legacy US West areas like Denver/ Minneapolis/ Seattle/ Portland (Comcast has lower promotional pricing).  Even as new movers are considering traditional SVOD alternatives like Roku and AppleTV in droves, there’s a perception that the new CenturyLink fiber product is not worth the extra cost.

A good example of the perception vs reality dichotomy comes from the latest J.D. Power rankings for the South Region:

J D Power South ISP ratingsWhile these ratings reflect overall satisfaction with the Internet service, it’s very hard for new products to overcome old product overhang (and DSL experiences can create long memories).

But superior customer satisfaction (749 is a decent score for telecom or wireless providers regardless of product) does not guarantee market share gains.  AT&T (Bell South) has continued to improve its fiber footprint, invested heavily in retail presence, and improved the (self-install) service delivery experience.  Even with that, it’s highly likely that AT&T’s South region lost market share to Comcast (2nd place) and Spectrum (4th place).  Why is a three-circle product outperforming a five-circle product?

The answer lies in several factors:  Value (see comments above about promotional pricing and go to www.broadband.now for additional information), Bundled products (which links back to value – bundle cost may be significantly cheaper), and Legacy perceptions (DSL overhang mentioned above, tech support overhang, install overhang).

For more details, let’s look at two very fast-growing areas:  Dallas, TX and Hollywood at&t pricing vs cable in dallas and miami(Miami), FL.  Nearby is a chart showing online promotional pricing for AT&T, Spectrum (Charter) and Comcast.  There are some differences on contract term (AT&T has contracts in Dallas; Spectrum does not.  Comcast has a 2-yr term with early termination fees to get the $80/ mo. rate for their triple play in Miami).  Both zip codes selected above have over 50% served by AT&T fiber.  AT&T is more competitively priced than Spectrum in Dallas, and extremely competitive with Comcast especially at the mid-tier Internet only level (promotional rate gigabit speeds are $70/ month with no data caps).

With superior overall customer satisfaction and competitive pricing, why does AT&T continue to tread water on broadband and lose TV customers?  Are cable companies out-marketing Ma Bell?  Is there a previous AT&T experience overhang?  Are AT&T retail stores creating differentiation for AT&T Fiber (compared to minimal showcase store presence for Spectrum or Comcast)?

Bottom line:  Cable will still win a majority of net adds despite lower customer satisfaction and higher prices.  Why AT&T cannot beat cable especially in new home (AT&T fiber) construction areas is a function of marketing, operations and brand mismanagement.

  1. Enterprise spending – Did it return to cable instead of AT&T/ Verizon/CenturyLink? We commented last week on AT&T’s expected gains in wireless enterprise spending thanks to the FirstNet deal.  How that translates into wireline gains is an entirely different story.  Here’s the AT&T Business Wireline picture through 2Q 2019:

 

at&t 2q business wireline financials

While these trends are not as robust as wireless and operating income includes a $150 million intellectual property settlement, AT&T management described Business Wireline operating metrics as “the best they have seen in years.”  What this likely indicates is that AT&T’s legacy voice and data service revenue losses (high margin) are beginning to decelerate (at 14.6% annual decline, that’s saying a lot – Q1 2019 decline was 19.2% and the 2Q 2017 to 2Q 2018 decline was 22.0%!).

Meanwhile, Comcast Business grew 2Q 2019 revenues by 9.8% year over year and is now running an $8 billion run rate (still a fraction of AT&T Business Wireline’s $26.5 billion run rate but a significant change from Comcast’s run rate in 2Q 2016 of $5.4 billion).  Spectrum Business is also seeing good annualized growth of 4.7% and achieved a $6.5 billion annualized revenue run rate.   Altice Business grew 6.5% and is now over a $1.4 billion annualized revenue run rate.  Including Cox, Mediacom, CableOne and others, it’s safe to say that cable’s small and medium business run rate is close to $13 billion (assuming 33% of total business revenues come from enterprise or wholesale).  That leaves a consolidated enterprise and wholesale revenue stream of ~ $5.5 billion which is more than twice Zayo’s current ARR.

The business services divisions of cable companies are repeating the success of their residential brethren.  They are aggressively pricing business services, using their programming scale to grab triple play products in selected segments such as food and beverage establishments and retail/ professional offices.  And, as Tom Rutledge indicated in last week’s Bank of America Communacopia conference, they are starting to sign up small business customers for wireless as well.  I would not want to be selling for Frontier, CenturyLink or Windstream in an environment where cable had favorable wireless pricing and the ability to use growing cash flows to build a competitive overlay network.

Enterprise and wholesale gains are important for several reasons.  In major metropolitan areas, segment expansion gets cable out of the first floor (think in-building deli or coffee shop) and on to the 21st floor.  To be able to get there, cable needed to have a more robust offering.   Comcast bought Cincinnati-based Contingent services in 2015, and Spectrum also improved its large business offerings.  They are not fully ready to go toe-to-toe with Verizon and AT&T yet, but with some help from the new T-Mobile (all kidding and previous John Legere lambasting aside, a new T-Mobile + cable business JV would make perfect sense), things could get very difficult for the incumbents.

Moving up in the building is important, but there’s another reason to expand from the coffee shop:  CBRS (if you are new to TSB, the link to the “Share and Share Alike” column is here).  Given that 2-3 Gigabytes/ subscriber of licensed spectrum (non-Wi-Fi) capacity are consumed within commercial offices per month, there’s a ready case for MVNO cost savings as Comcast, Altice, and Spectrum Mobile continue to grow their wireless subscriber bases.

Further, since many enterprises are going to be introduced to LTE Private Networks soon, there’s a threat that Verizon and AT&T (and Sprint if the T-Mobile merger closes) stop provisioning cable last mile access out of their regions and only provision wireless access.  As we have discussed in this column previously, the single greatest benefit of 5G LTE networks is the ability to control the service equation on an end-to-end basis for branch/franchise locations.  It represents a compelling reason to move to SD-WAN, and allows cable to deepen its fiber reach and build more CBRS (and future spectrum) coverage.

Bottom line:  Cable continues to grab share in small, medium, and enterprise business segments as they move from connecting to the building to wirelessly enabling each building.  CBRS presents a very good opportunity to do that.  Even with cable’s entre into the enterprise segment, it will still be dominated by AT&T (with Microsoft and IBM as partners) and Verizon for years to come.

  1. Expense Management and Productivity Improvement. Flat to slowly declining operating costs in an environment where revenues are declining more precipitously is a recipe for increased losses.   Even with some of the capital and operating expense being shared with 5G/ One Fiber initiatives, the reality is that lower market share is leading to diseconomies of scale and both are going up a cost curve right now.

 

That’s why reducing operating expenses is not a spreadsheet exercise – operating in a territory originally engineered for 80-90% market share that is now at 30-40% share requires increased efficiency.  Connecting to neighborhoods is hard and connecting through neighborhoods to individual homes is even harder.  Combine this with a change in technology (fiber vs twisted copper) ratchets the degree of difficulty ever higher.

 

One of the great opportunities for all communications providers is using increased computing (big data) capabilities to quickly troubleshoot issues and recommend remedies.  For example, customers who go online or contact care and are “day of install” should have a different customer service page than someone who has been a 4-month regular paying customer or a 2+ year customer who is shopping around.

 

There’s no doubt that the online environment has been improved for every telco, and also no doubt that many more issues in the local service environment require physical inspection and troubleshooting.  But when telcos move to correctly predicting customer needs through online help 95+% of the time, the call center agent will go the way of the bank teller and the gas pumper:  Convenience and correct diagnosis will trump in-person service.

For those of you who are regular followers of TSB and read last week’s column, there’s also the issue of territory dispersion.  Without retreading the information discussed last week, one has to ask if there are trades to be made in the telco world (or spinoffs) that make sense to do immediately (Wilmington, North Carolina, a legacy Bell South and current AT&T property would be a good example using last week’s map).

Bottom line:  There won’t be any dramatic changes to the wireline trends – yet.  But, as 5G connectivity replaces cable modems and legacy DSL (particularly to branch locations) and as cable expands its fiber footprint to include in-building and near-building wireless solutions (starting with CBRS), the landscape will change.  And there will be a lot of stranded line extensions if wireless efforts are successful.

 

TSB Follow-Ups

  1. Randall Stephenson met with Elliott Management this week, according to the Wall Street Journal. At an analyst conference prior to the meeting, Stephenson offered somewhat of a hat tip to Elliott Management, saying “These are smart guys.” The AT&T CEO also stuck by his decision to move John Stankey into the COO role, noting “if you’re going to go find somebody who can do both, right, take a media company that has transitioned to a digital distribution company and pairing it with the distribution of a major communication company, and you want to try to bring these two closer and closer together and monetize the advertising revenues, all of a sudden, that list gets really, really short.”  If Elliott’s decision to go public with its criticism is based on the Stankey announcement, I wonder how that logic was received in New York last Tuesday.

 

  1. Apple iOS 13 fails again, this time failing to display the “Verified Caller” STIR/SHAKEN (robocall identifier standards) on Apple devices until after the called party has answered. Kind of defeats the point, right?  More in this short but sweet article from Chaim Gartenberg at The Verge – we agree with the T-Mobile quote in the article “I sure hope they get this fixed soon.”  Don’t hold your breath, as Apple is running on its 12th year of not allowing developers to access the incoming phone number.

 

  1. The Light Reading folks have a very good chronicle of what’s going on with CBRS trials here. Sharing can work, but it takes a lot to do it.  The value has to be clearly present to increase carrier attention and participation.

 

  1. Eutelsat can’t seem to make up its mind. On September 3, they dropped out of the C-Band Consortium (Bloomberg article here) and last week they seemed to backpedal based on this FCC memo.  Time for Commissioner Pai to save the day!

 

Next week, we will cover some additional earnings drivers.  Until then, if you have friends who would like to be on the email distribution, please have them send an email to sundaybrief@gmail.com and we will include them on the list.

 

One last request – we are currently on the hunt for some of your favorite titles that chronicle telecom/ tech history.  No title is off limits.  Currently, we have three that have made the cut:

 

Have a terrific week… and GO CHIEFS!

The Sunday Brief