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John Cini, The Technology Doctor
Press Release: Lightyear Network Solutions Launches New Mobile Phone Agreement with Sprint
[June 9] Another update: Channel Partners (C.P.) magazine weighed in today with some intriguing comments. Of LightYear’s announcement that it has a new 5-year MVNO agreement with Sprint, the magazine said:
“The contract updates an unprecedented 2009 agreement between the two companies wherein Sprint joined Lightyear in committing resources, including cash, expertise, and facilities to supporting the Lightyear sales channels, which include a network marketing arm serving residential and an agent network serving businesses. The amendment impacts only the wireless portions of the contract.”
C.P. is the only news source so far to specifically mention LightYear’s network marketing sales force. C.P. also accurately identified the difference between the previous 2009 Sprint-LightYear agreement, linked above, and the new 2011 relationship:
“Under the new deal, Lightyear will offer postpaid and prepaid mobile telephone service over the nationwide Sprint network. And, different from the previous wireless agreement, it gives Lightyear access to more current Sprint wireless devices and the ability to develop a wider range of wireless products, including offerings for business, said Brian Garrison, Lightyear’s vice president strategic planning and marketing.”
The key distinction is access to the latest-and-greatest Sprint devices, which is an industry first and an earth shaking shift that tilts the balance between contract and prepaid companies. Does this move by Sprint pretty much force the hand of the other big companies to provide prepaid access to their entire phone selections? YES, without a doubt. In the “LY Intro” of this blog, I get into more detail about this industry-altering shift.
C.P.’s story names Lightyear Network Solutions a “CLEC”: “In a press statement, the company added that the deal further would enable the CLEC to offer bundled wireline/wireless services and new solutions such as fixed mobile convergence,” and references the original Verizon deal that launched the Lightyear Wireless business: “Lightyear launched Lightyear Wireless as a result of a July 2008 agreement with Verizon Wireless. That direct agreement with Verizon is no longer in force, Garrison said.”
[June 8] This is an update to the press release I posted below, earlier this morning: The KC Star is the first to provide commentary on this press release. I had to include their words. Their “reseller” label in the headline isn’t the correct label, but they use “reseller” and “wholesaler” interchangeably, which is confusing but so be it. And I think the “purchasing Sprint service through a wholesaler” should say “purchasing Sprint FONES through a wholesaler,” but again, we’ll live. (This Sep. 3, 2009 announcement about LightYear’s original wholesaler agreement states that “Sprint Wholesale Solutions … and Lightyear Network Solutions LLC, a reseller and VoIP carrier, signed a new wholesale agreement Tuesday that the companies say redefines the traditional wholesale telecom model.” There’s no mention of a middleman for service in that article. LightYear was definitely getting fones thru alternative, limited sources – glad that’s over!)
JC
http://sprintconnection.kansascity.com/?q=node/1805
Sprint inks deal with reseller Lightyear
Submitted by Scott Canon on June 8, 2011 – 7:55am.
“Sprint has cut a five-year deal with Lightyear Network Solutions, which will resell Sprint service under the Lightyear brand.
“Lightyear has been purchasing Sprint service through a wholesaler for about 18 months and selling the service to pre-paid customers under the Lightyear banner.
“The new deal cuts out the middle man and allows Lightyear to buy directly from Sprint. Lightyear chief executive Stephen Lochmueller said it also means the company will get access to a wider array of Sprint phones, including smartphones running on Google’s popular Android operating system. Lochmueller said the deal will also set up Lightyear to sell post-paid service, the more traditional two-year contracts for wireless service on Sprint’s network.”
Here are some of the other sites that ran the press release so far (this is HUGE news):
- FierceTelecom.com | PhoneNews.com | MobileTechNews.com
- Stockguru.com | Stockwatch.com | SeekingAlpha.com | TradersHuddle.com
- Morningstar.com | iStockAnalyst.com | StocksAndShares.tv
- BusinessWeek.com | NewsBlaze.com | Tmcnet.com
- Louisville Business Journal | Louisville10.cityspur.com
http://finance.yahoo.com/news/Lightyear-Network-Solutions-bw-640637709.html?x=0&.v=1
Lightyear Network Solutions Launches New Mobile Phone Agreement with Sprint
— MVNO Agreement Expected to Contribute to Growth in Wireless Business —
Companies: Lightyear Network Solutions, Inc.
Press Release
Source: Lightyear Network Solutions, Inc.
Wednesday June 8, 2011, 7:30 am EDT
LOUISVILLE, Ky.–(BUSINESS WIRE)– Lightyear Network Solutions, Inc. (OTCBB:LYNS.ob – News), a provider of data, voice and wireless telecommunication services to business and residential customers throughout North America, today announced that it has launched its MVNO (Mobile Virtual Network Operator) operations under a new five-year agreement with Sprint.
The contract allows Lightyear to partner directly with Sprint on new wireless products, and provide postpaid and prepaid mobile telephone products and service utilizing the Nationwide Sprint Network. The agreement provides numerous benefits for Lightyear, including a larger and improved selection of the newest Sprint wireless devices, quicker access to those products, greater flexibility regarding product and service offerings for Lightyear customers, and the ability to offer bundled Lightyear wireline and wireless products.
The MVNO agreement enables Lightyear to offer an enhanced suite of wireless products, while lowering its costs. Lightyear’s sales force will immediately begin offering these enhanced services under the MVNO agreement to its more than 60,000 customers.
Lightyear recently initiated a marketing program to increase its commercial business activities, and this agreement with Sprint will enable the company to expand its efforts with new and existing business customers, including the availability to offer new solutions such as fixed mobile convergence. The agreement will also provide benefits to residential customers who will have access to a broader selection of wireless handsets, including a number of phones with the increasingly popular Android operating system.
“We are pleased to announce the launch of our MVNO with Sprint, which has been a valuable Lightyear provider partner for a number of years,” said Stephen M. Lochmueller, Chief Executive Officer of Lightyear. “This MVNO agreement will contribute to our long-term strategy to increase our organic growth. We expect our wireless business to contribute to our growth and profitability in 2011, with increasing benefits in future years.”
About Lightyear Network Solutions, Inc.
Through its wholly owned subsidiaries, Lightyear Network Solutions provides telecommunication services to large, medium and small businesses and to residential consumers throughout North America. Lightyear’s product offerings include local PRI and digital T1, enhanced Internet services, MPLS, Ethernet, Voice over Internet Protocol (VoIP), local and long distance service, and conferencing. Lightyear also offers wireless services to customers in the U.S. through wholesale contracts with multiple wireless providers. Lightyear built its own VoIP network in 2004 to enhance its product offerings and has partnered with some of the most prominent names in telecom including: Sprint, Verizon, AT&T, Level 3, PAETEC, CenturyLink, XO Communications, Intelliverse, BroadSoft, Cisco and ADTRAN. Lightyear Network Solutions is headquartered in Louisville, Ky. Additional information can be found at: www.lightyear.net.
Forward-Looking Statements
This press release contains “forward-looking statements” for purposes of the Securities and Exchange Commission’s “safe harbor” provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause Lightyear’s actual results to differ materially from those currently anticipated. These forward-looking statements may include, without limitation, statements about our marketing and acquisition opportunities, business strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward-looking statements are reasonable, the risks and uncertainties which could cause our actual results to differ materially from those currently anticipated includes changes in market conditions, our ability to integrate acquired operations, the ability to obtain additional financing on satisfactory terms, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and risk factors described in our filings with the Securities and Exchange Commission. Lightyear undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
Contact:
Lightyear Network Solutions, Inc.
Steve Rush, Marketing Manager, 502-410-1397
steve.rush@lightyear.net
or
Porter, LeVay & Rose, Inc.
Marlon Nurse, D.M., V.P. – Investor Relations, 212-564-4700
marlon@plrinvest.com
I’ve been saying this ever since AT&T announced the T-Mobile purchase in March: T-Mobile disappearing will only spur Sprint’s growth! Now CNET is on the trail …
http://news.cnet.com/8301-1035_3-20068758-94/sprint-the-winner-if-at-t-absorbs-t-mobile/
June 6, 2011 5:39 AM PDT
Sprint the winner if AT&T absorbs T-Mobile?
by Roger Entner
Roger Entner is the founder of Recon Analytics, responsible for all aspects of the firm’s research, consulting, and operations. He previously served in leadership roles at Nielsen, IAG Research, Ovum, and the Yankee Group.
The article’s author states in the beginning that opponents of AT&T swallowing T-Mobile have erroneously warned the merger will lead to inflated prices:
“Entities such as the Consumers Union are prognosticating that the disappearance of T-Mobile USA ‘will likely lead to higher prices, not just for T-Mobile customers, but for all customers,’ as it would eliminate the ‘largest low-cost provider’ in the wireless marketplace.”
Calling T-Mobile “the largest low-cost provider” is factually incorrect in two areas:
- It’s not the largest low-cost provider – Sprint is. And really, that’s of the big-4 wireless companies. Officially, Sprint isn’t the largest low-cost provider, although it owns one of the lowest-cost providers, Boost Mobile. When you compare costs and number of customers, Boost, Leap Wireless, Metro PCS, and Straight Talk are the largest low-cost providers. T-Mobile isn’t even in the discussion.
- Of the big-4, T-Mobile isn’t the lowest-cost provider – Sprint is. Compare the two plans, Sprint’s $79.99 ($69.99 + “$10 Premium Data add-on charge“) vs. T-Mobile’s $79.99, and see which plan gives you more. On T-Mobile’s plan, the potential for overage charges is tremendous with their limited 2GB data.
That’s why the article says:
“… quick research gathered from the Web sites of various wireless providers presents a set of facts that do not support claims that T-Mobile is the lowest-cost provider. Furthermore, trend lines for wireless pricing before and after wireless mergers do not support the theory that the merger will lead to price increases.”
And then the real hammer drops:
“In fact, Sprint’s Boost Mobile, Leap Wireless, Metro PCS, and Straight Talk are all gaining customers, while T-Mobile’s higher-priced services are losing customers. It is highly doubtful that Sprint, Leap, Metro PCS, and Tracfone will raise prices while competing vigorously against each other for customers at the low-cost end of the market, just because a higher-priced competitor is no longer competing.”
“The best way to describe T-Mobile at this time is as ‘the most expensive low-cost phone provider’ — an oxymoron indeed, and the exact reason for T-Mobile’s customer losses. The root of T-Mobile’s current churn and customer drop-offs lies in the lack of focus on a clear consumer segment. The provider’s plans are too expensive to appeal to customers who seek low-cost plans, while it is unable to provide a network that will satisfy the demands of customers who are willing to pay a premium.”
I’m also obligated to add that T-Mobile is the most egregious liar in the wireless market, aggressively touting a “truly unlimited” plan that is truly limited (unlimited talk and text, with a 2GB data limit), along with their “4G” service that isn’t close to 4G. They fool a lot of customers to get them in the door, but then customers find out the truth and take their business elsewhere.
And it’s very easy to go elsewhere:
“In virtually every market, where T-Mobile is active, Sprint’s Boost service is available, as is Straight Talk. Additionally, either Metro PCS (covering approximately 100 million Americans) or Leap Wireless (covering approximately 95.3 million Americans) are also active in these markets, providing cheaper service plans that directly compete with T-Mobile USA’s offerings.”
Very few people are limited to T-Mobile’s unlimited dishonesty and high prices. (You can put AT&T and Verizon at the top of the high prices column.)
As for the overall cost of wireless potentially increasing because of AT&T and T-Mobile merging, the data overwhelmingly kills that argument:
“Based on Nielsen’s Customer Value Metrics collection of more than 60,000 wireless phone bills per month, the price per voice minute has held steady over the last two years, while the price per text message that consumers actually pay declined from about 2 cents to 1 cent per message, and the price per megabyte of data declined from 47 cents in the third quarter of 2008 to 5 cents in 2010.”
After those four devastating points, Mr. Entner concludes the whole situation will benefit Sprint:
“What is perhaps even more interesting is that Sprint, while loudly opposing the acquisition, will in all likelihood be the biggest winner from T-Mobile’s disappearance. It is already the best-positioned value provider in the wireless industry. Sprint’s postpaid plans are providing great value, while its Boost brand is a leader in the disruptive unlimited segment, and its Virgin Mobile brand is well represented in the per-minute prepaid segment. No other provider has as firmly anchored itself as the low-cost provider as Sprint has, and no other carrier in the U.S. has done a better job in improving its customer service.”
He goes on to say that “When the remaining, value-conscious T-Mobile customers are looking for a new carrier, Sprint and its fighter brands will be at the top of their consideration list …“
In the end, the article shows the brilliance of Sprint’s current position:
“For Sprint, the merger (and opposing it) represents a win-win opportunity. By opposing the merger, Sprint makes the lives of two of its competitors more difficult and increases the chance Sprint will secure extensive and favorable conditions on the merged entity. If it succeeds in blocking the merger, Sprint will have forced AT&T and T-Mobile to waste an entire year of valuable management time that could have been used to make Sprint’s life more difficult. T-Mobile would be in a particularly difficult position to reinvigorate a workforce and attract new customers. After all, how do you gain customers when your company is viewed as uninterested in staying in the United States and without a vision for the future, but was forced by regulators to still compete?“
The CNET article has a chart that compares the most popular low-cost plans, but the author makes the same mistake most people do: it uses the headlines from the providers instead of using the fine-print (which is found in the “Terms & Conditions”) upon which customers are billed. Yes, it’s true: customers make purchasing decisions from headlines, but get billed under the fine-print conditions. For integrity in the market place, customers should be aware of that.
Here are the specifics of the article’s chart errors:
- T-Mobile’s $69.99 and $89.99 plans are for contract, not prepaid. T-Mobile’s prepaid plans are $50 for unlimited talk and text and 100MB data, and $70 for unlimited data, although no details are given on where they cap that (which I’m confident they do, since they cap their contract plans). While we’re at it, how does T-Mobile’s “low cost” $70 compare to a plan that offers more service at $50? That’s a gargantuan $20/month difference, for less service!
- Of the 4 prepaid companies’ plans, 3 are NOT for smartphones – only one of them applies to prepaid smartphones (Boost’s $50).
- The $45 plan listed for “Leap Cricket” is NOT available for smartphones – they have a $55 plan, but even that isn’t unlimited for talk (no 3way conference calls allowed) and the data is capped at 1GB. Cricket says numerous times on its site that the plan is unlimited, until you get to the “details page” that says at the bottom, “Rate plan contains a 1GB data usage level. Once you reach your usage level your speeds will be reduced.” Yet the CNET article’s chart says “unlimited.”
- The $40 and $50 plans listed for “Metro PCS LTE” have data caps of 100MB and 1GB, respectively. Yet the CNET article’s chart says “unlimited.” If you want truly unlimited with MetroPCS, it’s $60/month.
- Straight Talk’s plans don’t offer any current smartphones, and that company’s definition of “Mobile Web Access” is about 20 years old. Use any fone they offer to surf the web, and you’ll quickly conclude that you can’t get a good internet experience with them. So their $45 plan is not anywhere near the same thing as unlimited data with Boost’s $50 plan and Cricket’s $55 plan.
For a much more accurate plan comparison chart, go here.
JC
“We believe an industry sea change is already under way, one that will heavily favor the prepaid business model …“
“… prepaid providers offer consumers a certain value proposition that the national carriers have thus far been unable to match …“
And Then There Were 3: eWeek.com became the third major tech outlet to report on the dismantling of wireless contract plans. This follows two other recent predictions of prepaid growth:
- the Nov. 4, 2010 New Millennium Research Council Report
- the May 10, 2011 RCRWireless.com story by Jim Patterson
Yes, we’re keeping a sharp eye on this trend. Why? Because we’re part of the industry shift, by saving people money on a bill they already pay, showing them how to switch from contract to prepaid wireless.
—— [Make sure you see the
Walmart vs. “mom-and-pop” stores analogy
at the end of this posting!] ——
eWeek.com reported yesterday in a story titled “AT&T, Verizon To Be Challenged by Smaller Carriers in Prepaid Market“:
“Regional U.S. carriers with a focus on the prepaid market may not be able to compete as aggressively for customers as the nation’s four largest players—Verizon, AT&T, Sprint and T-Mobile—but changes in the market are nonetheless working in their favor, according to a May 25 research report from financial services firm Citadel Securities.”
The eWeek.com story says that Citadel Securities “expects prepaid subscriber growth to increase by an average of 11 percent a year” over the next five years, “while postpaid growth flattens,” and “by 2015, we expect that total U.S. industry connections will be ~365MM, with almost 40 percent of those connections categorized as prepaid.”
If you’ve read the other 2 articles I mentioned above, then you know the other two reports (and I) think the “40%” number is way low, since the prepaid stampede will probably result in the END of contract plans, not take a bite out of them. Do the math: if Jim Patterson’s “46 million” prepaid subscribers count for the end of 2010 is accurate, that’s approximately 15% of the 303 million total USA wireless users. (Some say the prepaid number was much higher at the end of 2010.) Adding 11% a year would only take the 46M to about 80M by 2015. The NMRC report basically predicts that number will be surpassed in 2011 alone!
Citadel Securities identified the bad economy as a factor in driving the growth of prepaid wireless, as consumers look to save money.
The eWeek.com article said the Citadel Securities report named Leap Wireless as an example of a smaller carrier that may benefit from 4G LTE (Long-Term Evolution) fone prices rising “above the consumer-expected $200 mark” while “3G smartphone prices fall,” creating an attractive entry point for large numbers of consumers to switch to prepaid with an inexpensive smartphone, whether it’s an Android or iPhone.
A specific demonstration of the power of this pricing, according to the article, was the impact of the iPhone 3G price being reduced to $49 (because of the release of iPhone 4), making the older iPhone 3 much more attractive than even newer AT&T “Android smartphones such as the Motorola Atrix 4G.”
eWeek’s story said the report stated:
“We believe the regional prepaid providers offer consumers a certain value proposition that the national carriers have thus far been unable to match,” and “As the entire wireless industry moves toward the rapid adoption of smartphones, we believe the prepaid specialists are poised to gain an ever greater portion of the economic pie from their current subscriber bases (who have likely stood by with envy for years watching their postpaid counterparts enjoy the best devices).”
Analyst Shing Yin, the lead author on the report, is quoted as saying:
“We see the traditional line between the regional prepaid operators and national carriers as becoming increasingly blurred,” and “We believe an industry sea change is already under way, one that will heavily favor the prepaid business model—and Leap Wireless in particular—going forward.”
The Citadel Securities report predicted a “trifurcation” of the wireless market, with 3 levels of wireless users forming: “low-end, mid-tier and high-end.” Citadel sees the big-4 wireless companies targeting the high-end, while smaller carriers may own the lower-end.
Citing trends we have consistently pointed out here at The Antipaper Blog, Citadel said:
“The subscriber mix moving toward the prepaid (i.e., ‘no contract’) tier has been shifting of late.” The reason for that shift is the “blurring” of plans, as the smaller “prepaid operators have made bold attempts to extend their reach by negotiating national roaming plans and have begun offering premium hardware devices (smartphones), making their service offerings more akin to—and therefore more competitive with—their larger rivals.”
Towards the end of the eWeek.com article, a curious reference is made to a May 12 Senate hearing about AT&T’s proposed $39 billion swallowing of T-Mobile. “One witness, Gigi Sohn, president and co-founder of Public Knowledge, a public interest group focused on citizens’ rights in an increasingly digital culture, rhetorically asked whether anyone had ever seen AT&T advertise against MetroPCS or Cricket—her point being that the smaller carriers aren’t its real competition.”
Then Ms. Sohn is quoted: “Saying that a behemoth like AT&T competes against [Cellular South], U.S. Cellular or Cricket is like saying that Walmart competes against the mom-and-pop stores.” Huh? I was left scratching my head at her confusion: Walmart DID compete against “mom-and-pop” stores! Walmart shut them down left and right, by using economies of scale and new technology to provide much lower prices to consumers, making the “mom-and-pop” stores’ higher prices unattractive. Here’s the mystery: eWeek.com never connected the dots, but we will: for the Walmart vs. “mom-and-pop” analogy to be compared to the wireless battle, you have to flip it around, because Walmart had the lower prices. In wireless, who has the lower prices? The smaller prepaid companies do! So the prepaid companies are in the position of Walmart and the big contract companies are the “mom-and-pop” stores with higher prices.
Remember, in Walmart’s early years, they were the tiny upstart competitor, trying to take market share by helping people save money on a bill they already paid. You’d think that is obvious … 😉
Consider the mission we have: saving people money on a bill they already pay (the same as Walmart’s initial purpose). Then consider the tremendous money that’s being made in wireless, just as there was in retail goods in the 70s & 80s. There’s a wide-open space for lower-cost providers to jump in and take huge market share. Join us!
JC
AT&T, Verizon To Be Challenged by Smaller Carriers in Prepaid Market: Citadel
By: Michelle Maisto
2011-05-25
Flawed Thinking Runs Rampant In The Wireless World
Flawed Thinking Runs Rampant In The Wireless World
I’ve got 3 different instances of seriously maligned thot processes, each of which opens up tremendous potential for others trying to grab market share (such as our Lightyear Wireless).
From Apple:
http://www.channelpartnersonline.com/news/2011/05/iphone-5-deal-with-t-mobile-sprint-pending-report.aspx
iPhone 5 Deal with T-Mobile, Sprint Pending – Report
May 16, 2011
By Craig Galbraith
“Despite what seems like a new Android phone being released every day, the iPhone has maintained its market share in recent quarters. Android-based devices have overtaken the iPhone for market-share lead, but that’s many devices vs. just one.”
Why is this flawed thinking? Because while Apple “has maintained its market share,” Android is passing up other, less competitive players like Nokia and RIM, and as they do, they’re increasing their market share while Apple “maintains.” Plus, the multiple devices situation is no different than the one Apple faced with microsoft in the desktop computer war, one that Apple ended up losing badly. So they’re repeating the same mistake and this is a good thing? Why isn’t this obvious to everyone, when we have a recent, nearly identical situation to compare?
From Verizon:
http://www.reuters.com/article/2011/05/19/us-summit-verizon-idUSTRE74I4NH20110519
Verizon eyes family data plans
By Sinead Carew
NEW YORK | Thu May 19, 2011 6:38pm EDT
“Until now Verizon’s prepaid services have been uncompetitive with more specialist rivals and have made the biggest in-roads in the market by renting network space to prepaid provider Tracfone, a unit of America Movil (AMXL.MX).
“The company has yet to decide if it will expand nationwide with a $50 per month prepaid plan it is testing in Florida and elsewhere, according to Shammo. He said Verizon would do what it needs to do in prepaid.
“We’ve always said we’re a postpaid company,” he said. “That doesn’t mean that prepaid is not important to us.“
Hey – please STAY a postpaid company! That’s music to my ears. The fact that Verizon is sitting out the prepaid stampede is the best thing competitors could ask for. It’s an AMAZING admission on Verizon’s part (that they’re “a postpaid company”), but there it is, in writing. BTW, Verizon is definitely NOT doing “what it needs to do in prepaid.”
From “Truly Unlimited” T-Mobile:
http://www.channelpartnersonline.com/news/2011/05/t-mobile-usa-loses-nearly-100-000-subscribers.aspx
T-Mobile USA Loses Nearly 100,000 Subscribers
May 6, 2011
“Although T-Mobile USA reported 372,000 prepaid additions, the company lost 471,000 customers on contract, triple the number in the period a year ago (118,000). T-Mobile has lost 789,000 customers on contract over the last two quarters.
“Contract churn improved sequentially to 2.4 percent from 2.5 percent in the fourth quarter of 2010, but customer turnover was significantly higher than in the period a year ago (2.2 percent).
“‘The year-on-year increase in contract churn was driven by continued competitive pressures in the US wireless industry,’ T-Mobile USA said.”
If you’re watching even just 5 minutes of the NBA playoffs, you can’t avoid the T-Mobile commercials, which repeat multiple lies over and over. “Truly Unlimited” limited service, on a “4G” 3G network: both of those lies are made in every commercial and ad they run. Anyone who’s paying attention can quickly see T-Mobile is not telling the truth. So it is a wonder that they’re bleeding customers and being gobbled up by another truth twister?
The article “The problem with T-Mobile 4G? It’s not 4G” says:
“Aside from the open field in front of WiMAX and LTE to grow faster and faster iterations, there’s also the matter of their open field of spectrum. AT&T’s (and T-Mobile’s) primary connectivity issues are caused not with the speed of the network but the clutter — there are a lot of people using all 3G phones and devices in thickly populated metro areas such as New York and San Francisco in the carriers’ respective slices of the 800 MHz and 1.9 GHz bands. To paraphrase Yogi: It’s so crowded no one can go there anymore. And don’t think Verizon won’t suffer the same not-enough-room-to-swing-a-cat spectrum traffic jam once everyone rushes to get its iPhones early next year.
“Unlike HSPA+, both WiMAX and LTE operate in sparkling clean spectrum uncluttered by any other radio traffic. Verizon’s LTE users will rattle around unfettered — at least for a few years — in 22 MHz of spectrum in the 700 MHz band once occupied by local analog TV service. Sprint has a veritable castle of spectrum for WiMAX, a massive 120-150 MHz in the 2.5-2.7 GHz bands.”
JC
FierceWireless.com: American Customer Satisfaction Index survey finds Sprint sharing lead with Verizon
This is fantastic news for Sprint customers! Now there are 3 recent customer satisfaction surveys ranking Sprint at or right below the top. (J.D. Power and Consumer Reports each had similar rankings at the end of 2010.) Quite a reversal of previous results! Note the much higher satisfaction results for all the prepaid companies!
Significant quotes from the article below:
- “… smaller carriers outpaced the Tier 1 operators.”
- “… carriers such as MetroPCS (NYSE:PCS), Leap Wireless (NASDAQ:LEAP), TracFone and U.S. Cellular, which are in the “other” category of the ACSI’s survey, the score was 77.”
- “Among the Tier 1 carriers, Sprint Nextel (NYSE:S) and Verizon Wireless (NYSE:VZ) led the way with scores of 72.”
- “Sprint’s score represents a dramatic improvement from 2008, when it had an all-time-low score of 56. Sprint received scores of 63 in 2009 and 70 in 2010.”
- “In contrast to the upward trend Sprint is on, AT&T Mobility (NYSE:T) and T-Mobile USA did not fare as well, according to ACSI. T-Mobile’s score dropped 4.1 percent from a 73 in 2010 to a 70 in 2011, a five-year low. AT&T’s score dipped 4.3 percent from a 69 in 2010 to 66 this year, its worst score since 2006 …“
- Claes Fornell, business professor at the University of Michigan, is quoted in the story saying, “It is common to find a reduction in customer satisfaction after mergers, but it is rare for customer satisfaction to drop ahead of a merger.”
To see more details on the survey and the carriers’ yearly scores, go here.
JC
May 18 update:
http://www.usatoday.com/tech/news/2011-05-17-cellphone-satisfaction_n.htm – Two quotes from the USA Today article:
- “Sprint’s score includes subsidiaries Boost Mobile and Virgin Mobile, which sell plans without two-year contracts.”
- “Cellphone-company mergers bring struggles to combine billing systems, customer support and other functions. Snags can frustrate consumers. One reason Sprint had the worst score in the industry for many years was its disastrous merger with Nextel in 2005.”
JC
Customer satisfaction survey finds Sprint sharing lead with Verizon
May 16, 2011 — 4:58pm ET | By Phil Goldstein
For more:
– see this ACSI release
– see this ACSI commentary
Forbes magazine from Friday quotes an industry analyst who reports that Apple will add Sprint and T-Mobile as iPhone carriers: “… industry checks indicate Apple will likely announce Sprint, T-Mobile, and China Mobile as new carriers.”
No surprise – is there any doubt Apple is now wishing they had shared the iPhone with ALL carriers from the beginning? Regardless, it’s still 6 months away from hitting the lesser 2 of the big 4: “Apple will announce distribution deals with Sprint and T-Mobile in time for the holidays.” By then Android should have a stranglehold on the market …
Also significant from the article is that “demand for the iPhone is ‘flat’ as ‘strength from the white iPhone 4 release and launches on new carriers such as SK Telekom are offset by slowing at AT&T and Vodafone.’” That’s another indication the Android platform is in the driver’s seat.
Regarding super-duper surfing satisfaction via “4G” or “LTE” data access, Forbes said the analyst “says the Qualcomm LTE chipset Apple would have used ‘is currently not achieving yields sufficient for inclusion in the iPhone 5.’ He says Apple had hoped to have the LTE chipsets ready, but was planning a version without LTE called iPhone 4S.”
With Lightyear’s new Sprint device agreement, it will be fun to see how long it takes Sprint to make the iPhone available to LightYear.
JC
Apple: Analyst Says No LTE in iPhone 5; To Add Sprint, T-Mobile
May. 13 2011 – 2:04 pm
See also:
- – Apple Job Posting points to Sprint iPhone?
- – Could the next iPhone support all U.S. carriers?
- – Apple COO Tim Cook on Cheaper iPhone: ‘We Don’t Want To Be For Just The Rich’
Read the full 10-Q here. Red highlights are mine.
JC
http://finance.yahoo.com/news/Lightyear-Network-Solutions-bw-2320351516.html?x=0&.v=1
Lightyear Network Solutions Reports Increased Revenue and Gross Margins for First Quarter 2011
Revenues Increase 65% to $18.6 Million
Gross Margins Increase 81% to $6.6 Million
Companies: Lightyear Network Solutions, Inc.
Press Release Source: Lightyear Network Solutions, Inc. On Friday May 13, 2011, 7:30 am EDT
LOUISVILLE, Ky.–(BUSINESS WIRE)– Lightyear Network Solutions, Inc. (OTCBB:LYNS.ob – News), a provider of telecommunications services to business and residential customers throughout North America, local and long distance service, wireless services, conferencing, enhanced Internet services and Voice over Internet Protocol (VoIP), today announced its financial results for the first quarter 2011 ended March 31, 2011. Results for the first quarter of 2011 include Lightyear’s acquisition of SouthEast Telephone, which was completed on October 1, 2010.
Financial highlights for the first quarter include:
- Revenue of $18.6 million for the first quarter 2011 increased 65.3% from $11.3 million in the year-ago quarter;
- Gross profit of $6.6 million increased 80.7% over the first quarter 2010;
- Gross profit margins increased 300 basis points for the quarter to 35.4% from 32.4% in the year-ago quarter;
- Loss from operations reduced to $581 thousand from $930 thousand in the year-ago quarter;
- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) improved to a loss of $161 thousand compared with an EBITDA loss of $870 thousand in the year-ago first quarter; Net loss of $336 thousand compared with a net loss of $1.3 million in the year-ago first quarter;
- Net loss to common stockholders, including $375 thousand of cumulative preferred stock dividends, was $711 thousand, and compared with a net loss of $1.3 million in the year-ago first quarter;
- Net loss per common share, including the cumulative preferred stock dividends, was $0.03 for the quarter, and compared with a net loss of $0.09 per share for the year-ago first quarter.
Stephen M. Lochmueller, CEO of Lightyear said, “Our results for the quarter were favorably impacted by our acquisition of SouthEast Telephone, which has already had a significant impact on our financial results on revenue and gross profit. It provided us with additional network infrastructure that is enabling us to lower costs on our existing business. We have already implemented a number of steps that will provide us the ability to lower our operating costs. We expect to continue to see improvements in our operating efficiencies as we realize the full benefits of our integration with SouthEast Telephone.”
Mr. Lochmueller continued, “We currently have approximately 60,000 customers with a significant concentration in 5 states, providing us strong regional customer concentrations in contiguous operating areas, along with operating efficiencies. With a large number of customers in the rural markets, we believe we have a significant amount of upside potential to provide our portfolio of services.
“While the first quarter has historically been our weakest quarter, we produced several positive results. Since becoming a public company, this was our first year-over-year quarterly revenue growth in the core company, demonstrating that our sales and product approaches are correctly tuned for the market. This improved revenue base provides us a good foundation for the remainder of the year. Our first quarter was affected by several charges totaling approximately $477 thousand that were taken in the first quarter, and which we do not expect to recur,” he continued.
Mr. Lochmueller concluded, “We are pleased with our company’s progress and expect continued growth in 2011.”
About Lightyear Network Solutions, Inc.
Through its wholly owned subsidiaries, Lightyear Network Solutions provides telecommunication services to large, medium and small businesses and to residential consumers throughout North America. Lightyear’s product offerings include local PRI and digital T1, enhanced Internet services, MPLS, Ethernet, Voice over Internet Protocol (VoIP), local and long distance service, and conferencing. Lightyear also offers wireless services to customers in the U.S. through wholesale contracts with multiple wireless providers. Lightyear built its own VoIP network in 2004 to enhance its product offerings and has partnered with some of the most prominent names in telecom including: Sprint, Verizon, AT&T, Level 3, PAETEC, CenturyLink, XO Communications, Intelliverse, BroadSoft, Cisco and ADTRAN. Lightyear Network Solutions is headquartered in Louisville, Ky. Additional information can be found at: www.lightyear.net.
Forward-Looking Statements
This press release contains “forward-looking statements” for purposes of the Securities and Exchange Commission’s “safe harbor” provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3b-6 under the Securities Exchange Act of 1934. These forward-looking statements are subject to various risks and uncertainties that could cause Lightyear’s actual results to differ materially from those currently anticipated. These forward-looking statements may include, without limitation, statements about our marketing and acquisition opportunities, business strategies, competition, expected activities and expenditures as we pursue our business plan. Although we believe that the expectations reflected in any forward-looking statements are reasonable, the risks and uncertainties which could cause our actual results to differ materially from those currently anticipated includes changes in market conditions, our ability to integrate acquired operations, the ability to obtain additional financing on satisfactory terms, customer acceptance of products, regulatory issues, competitive factors, or other business circumstances and risk factors described in our filings with the Securities and Exchange Commission. Lightyear undertakes no obligation to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this press release.
Jim Patterson, Founder/CEO, Mobile Symmetry: In 2012 we may see “the end of the post-paid market as we know it.”
Another HUMONGOUS PREPAID prediction!
Jim Patterson, CEO and co-founder of Mobile Symmetry, and former President of Wholesale Services for Sprint, yesterday wrote a blockbuster article, “Reality Check: Is 2011 the year of prepaid?” that gives us ANOTHER voice predicting the impending end of contract (“postpaid”) cell service.
He begins his article with (red highlights are mine):
“This time, it’s for real.” If I have heard that phrase once, I’ve heard it a thousand times this week to describe how the prepaid carriers are going to take over the low end of the wireless market. I wrote about the role of pre-paid carriers and did a fairly detailed analysis of the economics a little less than a year ago. The economics certainly make sense at the individual (and, in the case of MetroPCS Communications Inc., at the family) level.
But can the prepaid carriers (in this case, Wal-Mart/Tracfone Wireless Inc., MetroPCS, Leap Wireless International Inc./Cricket Communications Inc., and the divisions of T-Mobile USA Inc. and Sprint Nextel Corp.) really make an impact for the entire year? Can they hold on to gains made in a particular quarter (usually the fourth or the first) through subsequent quarters? And, with handset availability being driven to new heights (MetroPCS now carriers a Samsung Electronics Co. Ltd. Galaxy handset for $299), and the Chinese vendors more than willing to develop Android handsets for double-digit retail (subsidized) price points, can this part of the wireless industry really shine?
The short answer is no. 2011 is a set-up, not a breakout year. 2012 is – “for real!”
He notes the significant growth of prepaid last year – “almost two-times post-paid”:
“The most important thing about the prepaid segment is that it’s growing. Sprint Nextel added 2.1 million net prepaid subscribers in the past year; MetroPCS 1.6 million; T-Mobile USA 670,000; and Leap just over 500,000. Wal-Mart, which usually counts in the carrier wholesale/reseller figures, added at least 2 million customers in the past year. With Wal-Mart, it looks like 6.9 million prepaid net additions in the past year, versus 3.6 million postpaid. Bottom line: Lots of growth, almost two-times post-paid.”
And he touched on the increase in revenue per user and profitability, pointing out that, “Average revenue per user … is steady to growing for each carrier as smartphones become a larger part of the sales mix.”
Then Jim maps out the industry’s looming upgrade to smartphones, which is where the real excitement begins:
“The four prepaid providers plus Wal-Mart have about 46 million subscribers, and about half of them will be upgrading to a new device (likely Android) this year. That’s 23 million total new devices sold in the prepaid channel, and 12 million of those are Android smartphones. AT&T Mobility and Verizon Wireless have 152 million postpaid retail subscribers, and half of them will be out of contract this year. Judging from the latest reports, about two-thirds of the base that is upgrade eligible will upgrade to a smartphone.”
His “46 million” prepaid number sounds low, or sounds like a number for 2010, but we win either way: if the number is ONLY at 46M, that’s more market share switching soon for us to take! And he’s predicting half of prepaid users “will be upgrading to a new device (likely Android) this year.” That’s incredible and right in line with our strategy.
He follows that with, “Two years ago, the thought of having a postpaid smartphone for free was preposterous. Now you can go to T-Mobile USA and get a Samsung Fascinate with a 1 Ghz processor or a BlackBerry Bold for free … We saw similar offers on the Verizon Wireless Droid product line through Wal-Mart.com in December. Is it impossible to think about a $49 Android smartphone from MetroPCS or Leap with a decent (600 MHz or 800 Mhz) processor for December? How about a 4G model for $199 in 2012?” Again, that is LightYear’s exact strategy, to offer a great selection of Android smartphones at a lower price, and then lock up customers with an unbeatable data plan.
“If the consideration is a $199 premium smartphone from Verizon Wireless or Sprint Nextel vs. a $199 1 Ghz smartphone from MetroPCS, will the decision be difficult for an individual user? Bottom line: The closer the “walk out costs” converge between postpaid and prepaid offerings, the higher the probability of success for the prepaid providers.”
I personally think Sprint has already prepared for this, as LightYear this month adds the Sprint fone lineup to the LightYear store! This will be a revolutionary step that will catapult our growth.
Jim ends his article by saying, “… until 2012, we have the year of Android. 2012 could be a “dual year” with both Apple products and LTE. That “two-fer” could spell the end of the post-paid market as we know it.”
Echoing my predictions beautifully …
JC
http://www.rcrwireless.com/article/20110510/REALITY_CHECK/110509929/-1/
Reality Check: Is 2011 the year of prepaid?
May 10 2011 – 6:00 am ET | Jim Patterson, founder and CEO, Mobile Symmetry | RCR Wireless News
ChannelPartnersOnline.com: T-Mobile USA Q1 2011 = 372,000 prepaid additions, 471,000 contract losses
Here’s the only quote you need from the article below:
“Although T-Mobile USA reported 372,000 prepaid additions, the company lost 471,000 customers on contract, triple the number in the period a year ago (118,000). T-Mobile has lost 789,000 customers on contract over the last two quarters.”
T-Mobile USA said, “The year-on-year increase in contract churn was driven by continued competitive pressures in the US wireless industry,” but I’m sorry, people are not fleeing contract because of “competitive pressures,” they’re fleeing to MUCH LOWER PRICED PREPAID PLANS! This is crystal-clear, but the Corp. guys won’t admit it. Because T-Mobile is being swallowed by AT&T, their numbers are worse than the other big boys, but the trend is still obvious. Red highlights and bolding are mine.
JC
http://www.channelpartnersonline.com/news/2011/05/t-mobile-usa-loses-nearly-100-000-subscribers.aspx
T-Mobile USA Loses Nearly 100,000 Subscribers
May 6, 2011
T-Mobile USA, the mobile operator that is planning to merge with AT&T, continues to struggle after losing nearly 100,000 subscribers in the first quarter.
T-Mobile USA lost 99,000 customers, more than triple the number of losses in the fourth quarter of 2010 (23,000).
But the company’s parent, Deutsche Telekom of Germany, vowed to continue fighting until AT&T acquires the fourth-largest U.S. mobile operator.
“Our deal with AT&T … will not change the focus of our US business,” said Rene Obermann, CEO of Deutsche Telekom. “Until the closing of the deal, T-Mobile will continue to challenge its competitors and compete aggressively in the US market.”
Bellevue, Wash.-based T-Mobile now serves 33.63 million customers, down from 33.71 million subscribers a year ago.
Although T-Mobile USA reported 372,000 prepaid additions, the company lost 471,000 customers on contract, triple the number in the period a year ago (118,000). T-Mobile has lost 789,000 customers on contract over the last two quarters.
Contract churn improved sequentially to 2.4 percent from 2.5 percent in the fourth quarter of 2010, but customer turnover was significantly higher than in the period a year ago (2.2 percent).
“The year-on-year increase in contract churn was driven by continued competitive pressures in the US wireless industry,” T-Mobile USA said.
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