Perhaps the most unique way the FCC has unveiled to tell Americans of the DTV transition drew mixed reaction. The CEA, NAB and two members of an FCC advisory committee said the agency seems to be wisely spending the $20 million Congress gave it for DTV education by paying $350,000 to sponsor a NASCAR driver (CD Oct 17 p10). They also supported the commission’s deal with AARP to spend $1 million to run ads in four magazine editions. But a third member of the FCC Consumer Advisory Committee and two marketing professors were skeptical of the NASCAR deal, saying the race car will have little visibility with racegoers or those watching the three races on TV.
Nokia’s CEO reassured investors that the firm’s liquidity position remains strong, though its Q3 net income fell 30 percent from a year ago. Nokia can run “unencumbered” by the financial crisis, CEO Olli-Pekka Kallasvuo said Thursday on the company’s earnings conference call. Credit markets are “very tight,” but are “still open to Nokia,” he said. The company had about $9.7 billion in cash and other liquid assets on Sept. 30. Nokia’s conservative approach, its size and its capitalization make the company the “trading partner of choice in crisis,” Kallasvuo said. Hit by weaker cellphone demand in European markets, sales fell 5 percent from a year earlier. But the adjusted gross margin grew to 35.7 percent from 34.5 percent thanks to an agreement with Qualcomm and other licensees. Handset shipments hit 117.8 million in the quarter, up 5 percent from a year ago but down 3 percent from Q2. Nokia’s market share fell to 38 percent from 39 percent a year earlier. The company expects growth this quarter in mobile device sales and a slight gain in market share, Chief Financial Officer Rick Simonson said. It still expects the overall handset market to grow 10 percent in 2008. “We have our eyes wide open to what’s happening out there,” Kallasvuo said. “We are closely monitoring our markets, our customers and suppliers,” he said. Citi Investment Research called Nokia Q3 sales “light,” but said per-share earnings met Wall Street expectations. The company’s outlook is “mixed,” with no major market share gains expected, it said. Nokia had said it expected its mobile device market share in Q3 to be lower than in the previous quarter.
Video advertising-management provider BlackArrow got $20 million in its latest funding round. Its existing investors -- Cisco, Comcast Interactive Capital, Intel Capital, Mayfield Fund and Polaris Venture Partners -- participated in the round. The company now has raised a total of $38 million. BlackArrow lets content providers and distributors inject targeted ads into content for broadband, live streaming and video on demand, the company said.
Every state has some sort of broadband initiative, said a new report. States are stressing wider broadband availability and using broadband in education and health care, it said. The report, by the Alliance for Public Technology and Communications Workers of America, said only 38 percent of rural residents subscribe to broadband, compared to about 59 percent in urban and suburban areas. It said only 25 percent of those earning under $20,000 a year take broadband, compared with over 60 percent for those earning over $40,000. State broadband efforts include state commissions or authorities, public-private partnerships, direct funding programs, state-run open networks with the state as anchor tenant and tax policies that reward broadband investment, the report said. It said at least 30 states have programs aimed at expanding broadband to areas and populations lacking affordable access. The report said 27 state programs help schools, colleges and universities, public libraries and other educational resources. Telemedicine incentives exist in 25 states, said the report. Thirteen states have programs to use broadband to promote economic development, mainly in their rural areas, said the report. The report details each state initiative -- http://www.apt.org or http://www.speedmatters.org/statepolicy.
A steadily dwindling number of customers have received broadband service through the Agriculture Department’s Rural Utilities Service loan and grant programs over the past nine fiscal years, government data show. Loan and grant programs begun under the Clinton administration connected 315,000 customers in FY 2001, but that number is projected to drop to 23,000 in FY 2009, USDA annual reports show. Shifting terms for loan qualifications and complex application procedures drive many applicants away, according to Government Accountability Office and Congressional Research Service reports and interviews with those familiar with the process.
China Mobile reported a 51 percent rise in Q2 profit, compared with the year-ago quarter, due mainly to “strong economic growth, rising consumer purchasing power and the subscriber growth in rural areas,” the company said. It added 45.25 million subscribers during the quarter, for a total of 415 million. On a half-yearly basis, net profit rose 44.7 percent to $8 billion, while sales were up 17.9 percent to $28.7 billion. The company will “actively search for quality overseas telecom assets as investment opportunities,” CEO Jianzhou Wang said in a conference call. Pali Research said expects positive cash flow for the rest of the year, it said. China Mobile plans to expand commercial trials of its TD-SCDMA-based 3G service to 38 cities in mainland China by June 2009, said Wang. The company is in Phase 2 of its 3G deployment, he said. The carrier will start buying equipment for Phase 2 in October, he said. Yet the company remains cautious about its outlook because Beijing’s restructuring of China’s telecom sector has changed the competitive landscape, the company said. Goldman Sachs believes the market underestimates China Mobile’s “3G responsibility and potential asymmetrical regulation risks,” it said.
The FCC named the winning bidders in AWS Auction 78, which closed last week. The auction closed after six days and 38 rounds, bringing $21.3 million in net bids. The biggest, $5.8 million by Puerto Rico Telephone Co., is for a license serving Puerto Rico and the U.S. Virgin Islands. The most went to Los Gatos, Calif.--based Club 42 CM Limited Partnership made 13 provisionally winning bids worth more than $7 million for licenses across the U.S. The FCC auctioned 35 licenses first offered in 2006’s advanced wireless services auction and 20 broadband PCS licenses in the C, D, E and F blocks in full or partial basic trading area markets.
Virgin Mobile USA completed its acquisition of Helio, a joint venture between SK Telecom and EarthLink, it said. Helio shareholders have received limited partnership units and 13 million Virgin class A common shares valued at $38 million, Virgin said. SK Telecom and Virgin Group each will invest $25 million in preferred shares of the company. The transaction offers Virgin new data applications, entry into the postpaid market, 170,000 Helio customers, debt reduction and a new strategic shareholder, SK Telecom, Virgin said.
Texas no longer will be the only state without payphone service for prison inmates. The Board of Criminal Justice awarded an Embarq-Securus Technologies partnership a seven- year contract to provide prepaid and collect-call services to inmates in 106 Texas prisons. Embarq will provide phones and lines, while Securus provides the digital security technology. The contract could generate $86 million gross annually, about $600 million over the life of the agreement, state officials said.
Iridium Q2 revenue was up 22 percent to $81.7 million, compared to last year, it said in an earnings release. Iridium had more than 280,000 subscribers worldwide, up 38 percent over last year, it said. The Defense Department recently renewed an enhanced mobile satellite services contract with Iridium, the company said. The company posted significant Q2 increases Q2 over that period last year in voice and data usage revenue, Iridium said. Voice traffic in Asia was up 82 percent, in North America up 50 percent and in Europe up 45 percent, it said. Users operating in polar regions generate more than 20 percent of total annual commercial circuit-switched voice and data usage revenue, Iridium said. Iridium cited increased frequency of polar flights as airlines try to shorten routes as a factor in this pattern.