Qualcomm Facing $1B Potential Chinese Fine

Qualcomm Facing $1B Potential Chinese Fine

Posted by Sam Churchill on December 16th, 2014

Qualcomm could be hit with a fine as high as $1 billion, reports Fierce Wireless. The San Diego-based company could also be forced to make concessions that would negatively impact its licensing business. At least 30 foreign firms have come under the scrutiny of China’s 2008 anti-monopoly law, reports Reuters. Qualcomm is the only major ongoing antitrust case in China involving a U.S. company and royalty fees.
Qualcomm’s prospects have been hampered by the National Development and Reform Commission’s (NDRC) 13-month investigation into the firm. An imminent decision in the case could force the company to pay fines potentially exceeding $1 billion and require concessions that would hurt its highly profitable business of charging licensing fees on phone chipsets that use its patents.

Qualcomm derives most of its profit from licensing fees and most of its revenue from sales of chipsets and modems. Qualcomm reportedly earned about half of its global revenue of $26.5 billion in China for the fiscal year that ended Sept. 28. Some observers believe that Qualcomm controls some 21% of LTE royalties.
President Barack Obama, during his recent visit to China, pushed his Chinese counterpart, Xi Jinping, on the use of Chinese antitrust policy to limit royalty fees for foreign companies. The push by Obama could alter China’s calculus on the issue, but it could just as well backfire. reports Fierce Wireless. It underscores the importance Washington places on China’s investigation.
The former deputy head of NDRC, Liu Tienan, was sentenced to life in prison earlier this month after convicting him of taking bribes and abusing his power, reports the NY Times.
China Mobile recently said it had 50 million LTE subscribers, with plans to have 150 million customers on the network by the end of next year and 300 million customers by the end of 2016. Their LTE network runs across a total of 130 megahertz of spectrum in the 1880-1900 MHz, 2320-2370 MHz and 2575-2635 MHz bands. China Unicom, the country’s No. 2 wireless carrier, said its 3G and LTE network attracted 4.9 million customers during Q3, while China Telecom, the country’s third-largest mobile operator, had 1.33 million LTE customers.

The latest edition of Ericsson’s Mobility Report predicts that 90 percent of the world’s population over six years old will have a mobile phone by 2020, with smartphone subscriptions forecast to top 6.1 billion by then.

Sprint & T-Mobile Charged with “Cramming”

Sprint & T-Mobile Charged with “Cramming”

Posted by Sam Churchill on December 18th, 2014

Sprint is facing a lawsuit by the Consumer Financial Protection Bureau that alleges the carrier illegally billed wireless consumers for tens of millions of dollars in unauthorized third-party charges. The lawsuit contends that Sprint operated a billing system that allowed third parties to bill for unwanted services, a process known as “cramming.”
T-Mobile has agreed to pay the FTC and FCC $90 million to settle cramming charges, according to the FCC’s site. An FTC and FCC investigation found T-Mobile guilty of breaking the law by “engaging in an unjust and unreasonable practice of billing consumers for products or services they had not authorized; and failing to provide a brief, clear, non-misleading, plain language description of the third-party charges.”
“Today we are suing Sprint for allowing illegal charges to be crammed onto consumers’ wireless bills,” CFPB Director Richard Cordray said in a statement. “Consumers ended up paying tens of millions of dollars in unauthorized charges, even though many of them had no idea that third parties could even place charges on their bills. As the use of mobile payments grows, we will continue to hold wireless carriers accountable for illegal third-party billing.”
The CPFB contends Sprint outsourced payment processing for digital purchases such as apps, games, books, movies, and music to vendors called “billing aggregators” without properly monitoring them. The lack of oversight, the lawsuit alleges, gave aggregators “near unfettered access to consumers’ wireless accounts,” according to a CPFB statement.
“Sprint’s system attracted and enabled unscrupulous merchants who, in some cases, only needed consumers’ phone numbers to cram illegitimate charges onto wireless bills,” the CPFB said. “The charges ranged from one-time fees of about $0.99 to $4.99 to monthly subscriptions that cost about $9.99 a month. Sprint received a 30-40 percent cut of the gross revenue from these charges.”
“We strongly disagree with (the CFPB’s) characterization of our business practices,” Sprint spokeswoman Stephanie Vinge Walsh said in a statement.
“It appears the CFPB has decided to use this issue as the test case on whether it has legal authority to assert jurisdiction over wireless carriers,” she said in an email.
Prodded by state attorneys general, Verizon, AT&T, Sprint and T-Mobile last year agreed to stop billing customers for third-party services.
The F.C.C. is conducting a similar investigation, and people close to the investigation said the parties were close to completing a settlement under which Sprint would pay $105 million in refunds and restitution for the unauthorized transactions.

Year-end US Carrier Coverage Report

Year-end US Carrier Coverage Report

Posted by Sam Churchill on December 18th, 2014

Verizon Wireless and AT&T Mobility say their 3G/4G coverage in the United States is now pretty much universal with more than 300 million pops currently covered, mostly due to both carrier’s extensive 700 MHz LTE networks. Now it’s a matter of keeping up with capacity requirements.

Sprint says its LTE network now covers 260 million people, mostly through the use of 10 megahertz of spectrum in the 1.9 GHz band. Next year, Sprint’s Chief Network Officer John Saw said Sprint will continue to build out its LTE network with its 800 MHz buildout about halfway finished. “We expect to be substantially complete with our LTE 800 MHz build by the end of 2015 in markets where the spectrum is available,” according to Saw.

Sprint’s 2.5 GHz coverage is now available in 62 markets, utilizing the carrier’s Spark program, reports Saw, which combines 800Mhz, 1.9GHz and 2.5 GHz. Their 2.5 GHz network covers about 100 million people.

Meanwhile T-Mobile US CTO Neville Ray said the carrier’s LTE network coverage currently serves a similar 260 million pops, matching Sprint. Ray says T-Mobile is now on track to cover 280 million people with 4G LTE by mid-2015, and expects to hit the 300 million mark by the end of 2015.

T-Mobile has acquired more 700 MHz spectrum in the “A” block, reports FierceWireless, with the carrier making several deals for airwaves with small license holders in the last few months.