A Foolish Week of Telecom
Here's something to shake up the Clearwire (NAS: CLWR) crowd. On Friday afternoon, The Wall Street Journal reported that Clearwire is thinking about missing the $237 million interest payment that's due Dec. 1.
This is quite a dilemma for the company. As of the end of September, it had almost $700 million in cash and short-term investments, but it will need all the liquidity it can get to survive through the next year. Making that payment will give it that much less cash to operate on.
But if Clearwire does miss that payment, there are concerns that it might end up in bankruptcy court. Obviously, that'll put it behind the 8-ball in terms of raising the cash it needs, not only to survive but also to upgrade its network to LTE as well as maintain its current WiMAX 4G network.
Huawei and ZTE under scrutiny
Just before Congress left town for the weekend, the House Permanent Select Committee on Intelligence released a statement saying it will initiate an investigation into the activities of Chinese telecom-hardware suppliers Huawei and ZTE.
Those companies have been trying to get into the U.S. networking infrastructure market for years, only to be repeatedly denied on the grounds that they would be threats to national security.
Both companies and the Chinese government have denied any involvement in actions that would warrant such a response.
Good news for Android
Smartphones powered by Google's Android mobile operating system have achieved a 32% share of the global smartphone market. MarketResearch.com reported that in 2011, worldwide shipments of Android phones increased 280% this year. Android market share in 2010 was only 13%.
Bad news for Android
Careful -- your Android phone is prone to viruses. According to Juniper Networks, the number of new viruses designed to attack Android-powered devices has grown by 472% since July. This malware takes two basic forms: spyware to steal personal information, and software that sends out expensive text messages for which the phones owners are billed.
Why so many viruses? Juniper says it's due to all the unchecked third-party applications that are available for Android phones.
Sprint Nextel (NYS: S) , the David of major U.S. telecoms, keeps swinging away at its Goliath rivals AT&T (NYS: T) and Verizon. This week's attack had Sprint releasing new wireless broadband plans that offer more for less than those of the big boys. More data for less money, that is.
These plans came after Sprint decided to drop its unlimited 4G plan from its partner Clearwire's WiMAX network. That unlimited access was one of the Sprint's few selling points it held over AT&T and Verizon. It had to come up with some other edge, even if not quite as radical.
Speaking of LTE ...
AT&T announced at the beginning of the week that it will fire up its 4G LTE network in six new markets starting tomorrow. That will bring AT&T's total LTE market count up to 16. It will, however, have a lot of work to do to catch up to Verizon. That carrier now has 178 markets under its LTE net.
Breaking into the wireless business
Regional wireline carrier Frontier Communications (NYS: FTR) has crossed the line, so to speak, and will start providing mobile broadband services. AT&T will provide the smartphones and the wireless coverage. The deal is for three years and will be tested in only a part of Frontier's domain before being rolled out to its full 27-state area. Verizon already does something like this with CenturyLink (NAS: CTL) .
A carrier for Nokia Windows Phones
Encouraging news for Nokia (NYS: NOK) : It's working out an agreement with AT&T for the carrier to offer Nokia's newest smartphones, the ones powered by Microsoft's Windows Phone operating system. Nokia sorely needs to catch a break, as its Symbian OS-powered smartphones can't hold onto market share. It will be great for Nokia if it can get some of its new phones into the U.S. market for the shopping season, but nothing has been firmed up yet.
To sue or not to sue
What would be a week in telecom without some of that "he said, she said" between Samsung and Apple (NAS: AAPL) ? But there's been a detente of sorts between the two constant litigants. Samsung had threatened to have Apple's newest iPhone, the 4S, banned from sale in South Korea. It backed down, however, after the phone's successful launch there.
But the squabbling isn't over. Samsung said it will continue to battle Apple in courts around the world. The conflict is, of course, about patents.
What's next? The Kim Jong-il special edition iPhone?
This just in: Mobile-phone use in North Korea has jumped 169% this year over last. I didn't even know North Koreans were allowed to own cell phones. Wireless service for those phones is provided by an Egyptian company, Orascom Telecom, which says it now has more than 800,000 subscribers. The network coverage can reach 94% of the country's 24 million people.
And that was our Foolish Week of Telecom. Please help yourselves to any or all of these companies by placing them in My Watchlist, a free Foolish service:
- Add AT&T to My Watchlist.
- Add Sprint Nextel to My Watchlist.
- Add Nokia to My Watchlist.
- Add Frontier Communications to My Watchlist.
- Add CenturyLink to My Watchlist.
- Add Clearwire to My Watchlist.
- Add Apple to My Watchlist.
At the time this article was published Fool contributorDan Radovskyowns shares of Frontier Communications and AT&T. The Motley Fool owns shares of Apple and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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