WiMax

Apologies in advance for my readers who aren't so tech-oriented - you may want to skip this one as it will mostly just be technobabble.

In my IT studies, I recently came across a term I was unfamiliar with - "WiMax." Basically described as Wi-Fi on steroids, WiMax is a comparable wireless communications technology with much greater range.

It seems that WiMax is presently being used as a fixed wireless access service (basically instead of running cables, you get signals like with Wi-Fi), although I can't find much information as to how widely deployed and available it is in the U.S. right now. WiMax suffers from interference and penetration issues due to where it's located on the spectrum band.

Sprint built out a WiMax network for its mobile service some years ago, but unfortunately the deployment dragged on for too long and competitors adopted LTE, which has now become the prevalent 4G technology. Sprint will shut down its WiMax operations this year, reportedly.

I was talking with one of my supervisors yesterday and he told me that KDDI in Japan is still building out and marketing WiMax. They may be the only carrier in the world to be doing so! I wonder if they're swimming upstream, though...

The Steady March of Japanese Telecos

A couple of interesting Japan-related telecom items:

A foothold in Mexico

Yesterday the WSJ reported that Softbank, one of Japan's major players in telecommunications, is looking at possibly entering the Mexican market.

You may remember that Softbank acquired Sprint last year to enter the U.S. market. Thus far it's faced high hurdles in trying to bring Sprint's mobile network up to snuff and stanch its hemorrhaging of subscribers. It next turned to T-Mobile, and was attempting a deal which would have combined the #3 and #4 U.S. mobile carriers in a bid to challenge Verizon and AT&T.

Source: ATD

Softbank's CEO, Masatoshi Son, promised to bring stiff competition to the U.S. that he said would result in lower prices and faster speeds for consumers. Unfortunately that deal never materialized as U.S. regulators signaled heavy resistance to the idea. Four, apparently, is the magic number of competitors for this administration, even if Sprint and T-Mobile combined still trail AT&T and Verizon individually in terms of size.

Son appears to be shifting his focus, if only for the moment, to another opportunity in Mexico. Dominant telecom America Movil announced that it is divesting parts of its network in order to avoid new regulations. The word is that Softbank is examining a bid for those assets.

Customer choice at home

In other news, Japan's Ministry of Internal Affairs and Communications (MIC) is imposing a new regulation on the nation's mobile carriers. Smartphones and tablets will now from next year have to be sold with unlocked SIM cards upon customer request at no additional charge, which would eliminate the traditional two-year contract that usually binds customers in Japan (and in the US, as well).

This move is anticipated to create more price competition among the big three carriers, pushing down prices. With unlocked SIM cards, consumers will be able to easily leave their current network and sign up with a competing carrier.

Although I'd love to see a similar move in the U.S., requiring unlocked SIM cards wouldn't be enough here. There are two major mobile technologies that carriers operate their networks on in the States - CDMA and GSM. In Japan, all (that I know of) the networks are run on CDMA technology.

In the U.S., Verizon and Sprint use CDMA, while AT&T and T-Mobile use GSM. This means that phones sold by any of those carriers is only equipped for one technology - either CDMA or GSM. Even with unlocked SIM cards, consumers with a Verizon phone would only be able to go over to Sprint's network or vice versa. Likewise AT&T and T-Mobile phones would be interchangeable with each other but not the CDMA networks.

So even if politicians in the U.S. had the guts and political capital to require SIM card unlocking (I wonder at the likelihood of this, considering a law legalizing SIM card unlocking was just recently passed), it would mean little unless all phones were also required to carry chips to support both CDMA and GSM technology.

At any rate, "woot" for Japan.

What to expect from Softbank

Last year Softbank, one of Japan's Big Three mobile carriers, acquired the US's Sprint Nextel. Since then, Softbank owner Masayoshi Son (the richest man in Japan) has been trying to shake things up. Those weird new Sprint commercials? Those are thanks to Softbank. Apparently Son got angry at Sprint's ineffective marketing agencies, "suggested" they be fired, and pushed for commercials imitating what has worked in Japan for Softbank. Unfortunately I'm not sure they're having much of a splash here; I think they may be a little too random and disjointed for Americans.

Most recently, Son has been in talks with both T-Mobile and the feds (both the FCC and the DoJ), trying to make a Sprint - T-Mobile deal happen. Consolidating the two would make them a match for Verizon and AT&T, the two behemoths of the US wireless market. Son has made the case that despite T-Mobile's relative success over the past couple of years, the market is effectively a duopoly right now, and the 3rd and 4th largest carriers are too comparatively small to effectively compete. Democratic officials in the government (especially FCC Chairman Tom Wheeler) have been signalling that they disagree, and that 4 is their preferred number of major competitors. Now, it seems, Sprint has lined up financing for the deal and is considering whether to move full speed ahead and damn the torpedos (!) or wait for more favorable circumstances, such as a new administration. While Republicans are generally more friendly to M&A, there's no guarantee that they will retake the White House in two years, and I'm not sure if Son will want to wait that long, potentially for little gain.

Meanwhile, it looks like Softbank has been making small moves to raise its own stock in the US, detatched from Sprint. For what purpose, I'm not sure. Lately I have seen these ads in the metro:

It looks like it's trying to make a pitch for itself and get its name out there, but..."Expect the unexpected," indeed. As someone who has lived in Japan, I am familiar with Softbank, but even I don't know what to expect from them here in the US. Though I must admit that I checked out the website and looked for a "careers" section. There was not one.

The Winds of Change

I mentioned in my New Years update that I had applied once again to JET for a CIR position. Well, I found out recently that I didn't move on in the process. Some information came to me from friends on the review staff that my application was disqualified for a very iffy, red-tapey reason that made those in charge feel bad. I won't go into detail; it's certainly disappointing, but that was just one possible avenue. We'll see what's to come!

Although I don't write much (or at all) about my work here, it's been an interesting past half-year in telecom. I suppose there's always something going on, but last summer heralded the acquisition of wireless carrier Sprint by Japanese mover and shaker Softbank. This was exciting on more than one level ("Yay M&A!" and "Yay J-company!").

First (I don't want to assume you're familiar with the US wireless scene), know that there are 4 major American carriers. Two Goliaths - AT&T and Verizon Wireless, and two Davids - T-Mobile and Sprint. AT&T tried to buy up T-Mobile in 2011, but US regulators nixed the deal over concerns that it was anti-competitive. Since then, T-Mobile has become a scrappy thorn in its rivals' sides, branding itself as "the Un-Carrier" and promoting unlimited data plans and unsubsidized phones - basically swimming against the current and actually making headway.

Sprint, on the other hand, has been kind of barely treading water. About a decade ago it merged with Nextel - a deal that is seen now as a waste of resources. Its network is lacking and under-built. What it has got going for it is a lot of good spectrum (airwaves that are used to build cellular networks). Enter Softbank.

Softbank is one of the Big 3 carriers in Japan (Softbank, NTT Docomo, and KDDI au), and right now is the most dynamic and exciting of the bunch. It was the first to bring the iPhone to Japan, and its daring leader is now trying to shake things up in the US with newly acquired Sprint. Whether or not he'll be able to do so remains to be seen.

The latest news is that Softbank-Sprint is exploring the possibility of gobbling up T-Mobile. I'm not sure how realistic this is. US regulators at both the Department of Justice (DoF) and the Federal Communications Commission (FCC) have indicated that they like the recent spurt of competition brought on by T-Mobile's feistiness and are happy with their decision to its 2011 merger with AT&T. In terms of major carriers, 4 could be the magic number.

It's a shame that there aren't many other telecom moguls out there as daring as Softbank's Masayoshi Son. With regulators leery of allowing further consolidation among the major carriers, there's a rare opportunity here for entry into the US market. But alas, German Deutsche Telekom is T-Mobile's majority shareholder, and they want out. NTT Docomo once tried to get into the US market and failed, but right now they're the slowest of the J carriers to change and I doubt they'd be interested in such an adventure. 

Will T-Mobile and Sprint continue to fight uphill as separate entities, then? Probably, I think. T-Mobile may be snapped up eventually by Dish or someone else. Sprint definitely has the means to make an impact on the market, but that will take a lot of creativity and capital investment. We'll see if Son is up to the task.