Sprint PCS affiliate iPCS added more subscribers Q3 than last year, but higher churn led to reduced net adds, it said Friday. Churn rose to 2.8 percent, up 0.3 percentage points from last year, reducing net adds almost 40 percent to 10,100 from 16,800 in 2006. It ended the quarter with 622,000 total subscribers. Sprint has bought all of its old PCS affiliates except iPCS, most recently acquiring Northern PCS in August (CD Aug 3 p9). Eventually Sprint probably will buy iPCS, but is waiting to resolve litigation and arbitration proceedings against the affiliate, Jeffries analyst Jonathan Schildkraut said in an interview. Sprint could buy iPCS by year end if a resolution comes, he said. But the departure of Sprint CEO Gary Forsee and promotion of ex-Nextel official Paul Saleh to acting CEO may slow talks, he said. “It’s been my impression that Paul Saleh was the guy holding [a deal] up,” Schildkraut said. Nextel was a “blue-collar, fighting man’s” carrier, and Saleh was a “big part” of that “combative” culture, he said. Unless Saleh has mellowed, he probably won’t play “peace maker” in the Sprint-iPCS conflict, he said.
Adam Bender
Adam Bender, Senior Editor, is the state and local telecommunications reporter for Communications Daily, where he also has covered Congress and the Federal Communications Commission. He has won awards for his Warren Communications News reporting from the Society of Professional Journalists, Specialized Information Publishers Association and the Society for Advancing Business Editing and Writing. Bender studied print journalism at American University and is the author of dystopian science-fiction novels. You can follow Bender at WatchAdam.blog and @WatchAdam on Twitter.
Vonage users could be vulnerable to identity theft, eavesdropping and other malicious attacks, said security firm Sipera Systems. Attackers could steal a Vonage user’s identity and receive their calls, Sipera said Wednesday. To keep VoIP service uninterrupted, the phone adapter registers itself on the Vonage server every 20 seconds, it said. But the server challenges only the initial registration and it accepts subsequent messages without authentication, the company said. An attacker could replay a Vonage subscriber’s register message with a spoofed IP address and send it to the server, hijacking phone service, it said. Eavesdropping is possible, because Vonage doesn’t encrypt voice conversation packets sent over the VoIP network, Sipera said. Vonage users also may be open to spam and denial of service attacks, Sipera said. The Vonage-Motorola phone adapter doesn’t authenticate session initiation protocol (SIP) requests from the server used to ring the phone and start a conversation, it said. Since the phone adapter checks only that the IP address matches the Vonage server’s, an attacker could impersonate Vonage and directly call users, it said. Attackers also could exploit the vulnerability to flood users with SIP requests, preventing Vonage users from sending or getting calls, Sipera said. Sipera said it told Vonage about the problems more than a month ago, but got only an automated response. Sipera has an ulterior motive, a Vonage spokesman said. “Sipera appears to be in the business of providing a VoIP ’security solution’ and has previously attempted to sell their products to our company,” he said. “Vonage is not a customer of Sipera’s products.” Selling Sipera services isn’t the goal, a Sipera spokesman said. Sipera is “not that much different” from independent researchers Symantec and McAfee, and has worked with other businesses at no charge to help publish security patches, he said. Sipera is studying other VoIP providers and will publish notices “the next few months,” it said.
Analysts bombarded Broadcom officials with questions about spending in a third quarter conference call after the company said Q3 profits had sunk 75 percent from a year earlier. Net income plunged to $27.8 million after the chip maker spent $352.3 million on research and development, almost $80 million more than it did in 2006. But strong Bluetooth, wireless LAN and DTV businesses drove company revenue to $950 million, up 5.2 percent from last year, it said late Tuesday.
Claims that Verizon thwarts workers’ efforts to form a union “are without merit,” Verizon told us Tuesday. The nonprofit American Rights at Work sent a report to about 1,500 state and local elected officials Monday contending that Verizon management has “aggressively intimidated employees who support forming a union” and has closed facilities where workers have tried to do so. “We strongly disagree with this report,” the Bell said. Verizon said it has created jobs for thousands of unionized employees by investing billions in broadband fiber connections to homes and small businesses in 16 states. “We look forward to proving the underlying assertions false.”
Level 3 reduced expectations for 2007 and 2008 after struggling to integrate delivery processes among recent network acquisitions in the third quarter, it said Tuesday. The backhaul company saw high sales orders, but had operational problems moving efficiently along the provisioning process to the final installation, testing and activation, it said. Level 3 met Q3 predictions, but didn’t see the provisioning capacity increase it needed “to meet the revenue increases we had previously projected” for 2007 and 2008, said CEO James Crowe. Level 3’s problems are not caused by demand, pricing or marketing ability, he said. “The breadth of the [provisioning] problem was greater than we had earlier diagnosed.”
Merger synergies and strong wireless growth drove AT&T to another strong quarter, the company said Tuesday. It reported $30.1 billion revenue and $3.1 billion profit in the third quarter. AT&T Chief Financial Officer Rick Lindner avoided political and legal issues in a Tuesday conference call.
An AT&T lawsuit against Vonage may be more a strategic move to hurt the top independent VoIP carrier than a “me too” case following Verizon’s and Sprint’s legal success, observers said Monday. AT&T seeks damages, an injunction and attorney’s fees on allegations that Vonage infringed a VoIP patent, in a complaint filed last week in the U.S. District Court for Western Wisconsin. A litigation-weary Vonage wants to settle but should have the money to survive another defeat if that happens, an analyst said.
An exemption giving the FCC, not the Federal Trade Commission, jurisdiction over communications companies as common carriers no longer may make sense given telco deregulation and convergence of communications technologies, panelists said Wednesday at a Federal Communications Bar Association lunch. Recent FCC forbearance decisions and service bundling by telcos and cable companies can complicate assignment of jurisdiction, they said.
Apple iPhone headphone cables contain four dangerous paint chemicals banned by the EU from toys and other children’s goods, Greenpeace said in a report Monday. Europe classifies the two most abundant PVC phthalates found as “toxic to reproduction” due to their ability to “interfere with sexual development in mammals, especially in males,” Greenpeace said. The other two chemicals are similarly banned, but only in toys that children might put in their mouths. After the report’s release, the California Center for Environmental Health took legal action against Apple, claiming violation of a state law.
Level 3 bought BellSouth fiber that AT&T divested to meet a Justice Department merger condition, the backhaul provider said Tuesday. Level 3 gets rights to use dark fiber connections to 27 buildings and more than 450 metro fiber route miles in nine markets: Atlanta, Birmingham, Ala., Charlotte, N.C., Chattanooga, Knoxville and Nashville, Tenn., Orlando and Jacksonville, Fla., and South Florida. Under the deal, Level 3 may add new buildings to acquired assets. Level 3 didn’t disclose the financial terms. But a source close to the deal said the price was less than what Level 3 had paid in April for AT&T’s divested SBC assets. Level 3 picked up the assets to expand its metro market reach, said Raouf Abdel, the company’s Business Markets Group president. Adding the assets won’t be difficult, since the acquisition “does not require the type of integration associated with recent metro and backbone transactions,” Abdel said. The Level 3 announcement is “not huge,” nor is it “new news” except that it specifies acquired assets, said Jeffries analyst Jonathan Schildkraut. The deal makes sense for Level 3, which is positioning itself as the largest backbone provider in the U.S., said Stephan Beckert, a Telegeography analyst. Traffic growth is adding pressure to bulk up the access side of the backbone as opposed to the long-haul side, he said. The new assets also reduce Level 3 reliance on third party providers like AT&T, he said.