The rumor that keeps on giving. Yet again the street is hearing whispers of a Google phone. Last time this was bantered about was 1Q of this year. Hearing this again has got to be part of a strategy Google has lined up.Funny thing. I am almost getting the feeling that maybe Google won’t bid on the 700mhz band.
You of course know that when gold is found in the hills somewhere there is more ways to get gold than necessarily digging it out of the ground. Could it be that Google has already aligned itself with a transport partner while it manages the layer 4-20 stuff I keep harping about? More at the link.
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Contemporaries over at Public Knowledge have an interesting editorial and observations on open bandwidth, like as free or near free as in beer.
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As a follow up to your cohost’s posting on the 28th, here is a Wired article on the exit of Don Berryman from his position at the firm.
My partner’s post on XOHM triggered my mind to a press release issued by Sprint some time back:
“Sprint Nextel also announced updated financial targets for its WiMAX business, reflecting final execution of the agreement with Clearwire:
- The company expects to generate between $2B and $2.5B in revenues for the fiscal year 2010 with more than 80% generated from new lines of business.
- The company expects that the WiMAX initiative will be positive for Operating Income Before Depreciation and Amortization (OIBDA) in 2010.
- Sprint Nextel expects to invest approximately $2.5 billion in capital for WiMAX through year-end 2008. Beyond 2008, network build is expected to be increasingly success-based. The company currently expects that extending its coverage to approximately 125 million people by year-end 2010 would require an additional capital expenditure of approximately $2.5 billion.
- The WiMAX initiative is expected to generate positive Free Cash Flow beginning in 2011 as the annual OIBDA contribution is expected to exceed capital expenditures, working capital and other cash requirements.”
Now lets see. Sprint will spend $2.5B to reach the first 100m subscribers and another $2.5B to reach the next increment of 25m subscribers. Nor do they expect to see a profit till 2011. By the look of those numbers its an urban build out in wave 1 and a suburban build out in wave 2. The wave 2 having a lower density user population. Otherwise the incremental marginal cost between the two steps makes no sense. A really aggressive accountant might recommend that once the first build out is done, quit. It will cost Sprint/XOHM 4x as much to get that next incremental customer as it did the first.
This in a nutshell is the same scenario that bidders will face in the 700mhz auction. The FCC has two mandates A) 40% penetration in 4 years, B) 75% penetration in 7 years. The (A) portion will be the lesser challenge. Its that (B) requirement that will give some bidders pause.
As my partner is want to say — that’s when you bring in the lawyers. Sigh…
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