Initially, the parallels between the fiber buildout around the turn of the twenty first century and the satellite industry today are compelling. In the late 1990s, the telecom industry increasingly poured billions of dollars into fiber. As these investments peaked, new technologies emerged to increase fiber optic capacity, including wavelength division multiplexing. This resulted in…
Satellite distributors (including resellers/systems integrators) have long been considered the black sheep of the satellite industry. Low margins, slow growth, low barriers to entry and dependence on large FSS operators have all kept returns down. But this may be changing. High throughput satellites (HTS) are poised to increase satellite capacity roughly 250-500% over the next several…
Intelsat S.A (I), is trading at 3.9x earnings, and is about to launch it next generation high throughput EPIC satellites which will dramatically increase capacity. It now trades at all time lows, down over 60% from its 2013 IPO. At first glance, Intelsat might seem like a buying opportunity. But greater downside, potentially even restructuring,…
While an industry White Paper on spectrum demand is being offered to support the accuracy of FCC’s spectrum demand projections used in its National Broadband Plan, the data actually shows just the opposite.[i] It is difficult to ascertain the exact numbers in the graphs in the paper. However, comparing the actual numbers in the FCC projections…
The CTIA recently released its annual wireless survey including 2014 results. This year’s survey is full of data suggesting a rapid maturation of the US wireless industry. Seven key data points: Annual Data growth slowed to 26%, growing from 3.23 trillion MB in 2013 to 4.06 trillion MB in 2014. This is the slowest data…
While there has been extensive discussion about the AWS-3 auctions, there has been less discussion about the long-term industry impacts of the auctions: 1) Upcoming 600 MHz Auction Prices – Higher transaction prices from the AWS-3 auction could imply higher prices for the 600 MHz auction. However: With the telecom industry spending ~$45B on the…
Aalok Mehta (PhD candidate at USC ) and I just finished a draft of a paper we are scheduled to present at the Telecom Policy Research Conference (TPRC) next month. The paper, “Overestimating Wireless Demand: Policy and Investment Implications of Upward Bias in Mobile Data Forecasts,” is about forecast error in demand estimates for spectrum.…
AT&T ‘s proposed $48 billion acquisition of DIRECTV is based on two simple business facts – 1) AT&T has broadband but needs a stronger video product to compete with cable; and 2) DIRERCTV needs a voice and broadband product to compete with cable. By combining services the can save money on customer service, back office…
There’s a legitimate question as to whether the wireless industry has enough money to pay historical prices for spectrum the FCC intends to auction over the next 18 months. The FCC intends to auction approximately 150 MHz of spectrum between the AWS-3 and the Broadcast Incentive auction (assuming 65 MHz at AWS-3 and 85 MHz…
It’s no secret that Sprint (S) and T-Mobile (TMUS) have been exploring a potential merger and that there are significant concerns over whether such a merger would be approved. Sprint and T-Mobile argue that the US wireless market is a near-duopoly dominated by ATT (T) and Verizon (VZ) with a combined market share of approximately…