A Foolish Week of Telecom

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Nokia's (NYS: NOK) woes have dominated much of the telecom news for the last two weeks. Easter Sunday's launch of the Finnish company's top-of-the-line smartphone, the Lumia 900, on AT&T's (NYS: T) network did not draw as many customers as hoped for. Perhaps setting a launch date on a major religious holiday had something to do with that.

And then there was the 900's embarrassing software glitch followed by Nokia warning that the next week's earnings release would not be a pleasant one.

At least Nokia was right about its earnings. The company posted a loss of $1.2 billion on sales that were down 29% from the same period last year. That drop in sales was due to an underwhelming reception by customers for the Microsoft Windows-Phone-running Lumia phones, and by Nokia's failure to defend its lower-end feature-phone markets from some stiff Asian competition.


To add insult to penury, Nokia also got, as Light Reading's Michelle Donegan put it, some Moody's blues this week as Moody's Investors Service lowered the phone maker's credit rating to just above junk status.

Help wanted: a third mobile ecosystem
The telecoms are looking for one more mobile operating system that can compete with Apple's (NAS: AAPL) iOS and Google's Android. The cost of subsidizing the priciest of smartphones -- especially the iPhone -- for buyers of long-term mobile contracts keeps shaving the carriers' profit margins thinner and thinner.

That could be why Verizon, once unenthusiastic about the future of Microsoft's Windows Phone OS, has changed its tune. Verizon CFO Fran Shammo gave Nokia and Microsoft a thumbs-up on the company's earnings conference call this week:

"I do think though it is important that there is a third ecosystem that's brought into the mix here and we are fully supportive of that with Microsoft. As we said that we created the Android platform from beginning and it is an incredible platform today that we helped to create, and we're looking to do the same thing with the third ecosystem."

Or how about a fourth?
Mozilla, whose Firefox web browser helped knock Microsoft Explorer down a couple of notches, is planning to release its own mobile operating system. With the unwieldy name of "Boot to Gecko", or B2G, it will be first carried by Telefonica's (NYS: TEF) Vivo in Brazil. This news was reported by Ztop, a Brazilian tech blog.

Handsets running B2G will be available in late 2012, according to Ztop, but as yet there is no information about which company will produce those handsets. B2G is open source and is based on HTML 5, the latest web standard.

Spectrum for sale?
There is spectrum, and there is spectrum, and all wireless carriers want more of it. Verizon owns some spectrum in the 700 MHz range, and though it would probably rather keep that, in order to get regulatory approval for its purchase of the more desirable Advanced Wireless Spectrum from several cable companies, Verizon will have to sell off some of the former.

So the carrier plans to auction off its 700 MHz A and B Block spectrum. The most likely purchasing candidates, according to CreditSuisse analyst Jonathan Chaplin, are AT&T, MetroPCS, Leap Wireless, and T-Mobile.

LightSquared's not done yet
It's not yet time to stick a fork in the yet-to-be-successful LTE network operator. This star-crossed venture, which planned to use spectrum that had previously been delegated to communications satellites as cellphone frequencies, failed to get FCC approval and became (essentially) a failed proposition.

However, though not exactly rising from its ashes, the company did get a reprieve from one of its partners. By paying Inmarsat the $56.25 million LightSquared owed it in the first phase of a cooperation pact, Inmarsat agreed to suspend the next phase of LightSquared's cooperation agreement until March 31, 2014, giving the company another chance at seeking FCC approval.

What are we, chopped liver?
Apple finally released its new iPad in Korea this week. But there was a certain ambivalence in its reception there. Resentment was mixed with excitement among the people lining up to buy the iPads. Why, some wondered, was Korea in the second group of countries to introduce the tablet?

That group included Brunei, Croatia, Cyprus, Guatemala, Malaysia, Panama, Uruguay, and Venezuela. The first group included the U.S., Australia, Canada, France, Hong Kong, Japan, Singapore, and the U.K.

"Yes, I have looked forward to having the new iPad," said one person in Seoul. "But I am offended that Korea was included in the second group."

Will the real T-Mobile please stand up?
So a perky model in a magenta dress doesn't make you want to switch wireless carriers? How about a perky model in black and magenta leathers racing through a city nightscape astride a motorcycle?

The T-Mobile marketing department is hoping the latter scenario will do the trick. The company is trying to toughen up its brand image with its "No More Mr. Nice Girl" advertising campaign. I hope she doesn't do any texting while boulevard racing. That would send the wrong message.

And finally...
In the putting-the-cart-before-the-horse department, Sprint Nextel (NYS: S) has said it will launch its first LTE-capable smartphone on April 22. Unfortunately, other than some experimental markets in small towns like Kanakee, Illinois, Sprint does not yet have an LTE network.

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At the time this article was published Fool contributor Dan Radovsky owns shares of AT&T and Nokia. The Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Nokia, Moody's, and Apple, as well as creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.
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