January 2015

Verizon is nearing "the end" of its fiber construction and is reducing wireline capital expenditures while spending more on wireless.

Although FiOS competes strongly against cable companies like Comcast, the expense of replacing old copper lines with fiber led Verizon to stop building in new regions and to complete wiring up the areas where it had already begun. Verizon even partnered with cable companies in 2012 to resell cable service in bundles with Verizon Wireless in areas where FiOS was never built. Verizon doesn't seem to want to maintain its copper telephone network either, with many customers and advocacy groups complaining that the company drags its feet in fixing problems in order to force users onto fiber or wireless.

New Street Research analysts wrote that AT&T will have $21.8 billion of liquidity and it will likely spend the "vast majority" of it on spectrum in the AWS-3 auction.

"We believe AT&T is raising capital to fund spectrum purchases; however, they will also need $15 billion to close the DirecTV transaction, which they expect to do in May," the analysts wrote. "We expect the company will need to come to the market again to raise funds for the DirecTV transaction." The New Street analysts had previously assumed AT&T and Verizon would spend around $15 billion to $20 billion each in the AWS-3 auction, in which 65 MHz is up for grabs, including 50 MHz of paired spectrum. They also thought T-Mobile would spend $2 billion to $3 billion and Dish Network would spend $2 billion to $6 billion. However, they noted that based on AT&T's capital raise, "it looks like AT&T may purchase $20-22 billion" whereas Verizon may purchase less spectrum.

The PuzzlePhone, developed by Finnish startup Circular Devices, is among a handful of bold concepts seeking to become a legitimate alternative to the wasteful cycle of cellphone upgrades.

Similar to Google’s widely-publicized Project Ara, the phone is designed to allow for certain parts to be interchangeable. For instance, fresh batteries can easily be swapped in and should the screen break, you can avoid costly repairs by simply buying a new one. But perhaps the biggest draw is that the phone, to some degree, would be future-proof. Since an injection of seed funding in September, the company has been busy assembling a prototype and hopes to release as commercial model by the end of 2015. No suggested retail price has been set, but Circular Devices co-founder Alejandro Santacreu says it wouldn’t be a stretch for the products to eventually reach a price point that’s competitive with other smartphones on the market, should the idea catch on. And even if the device retails for more out-of-pocket than a subsidized smartphone with comparable specs, users should expect to save money over the long term, he says.

AT&T CEO Randall Stephenson said the company has placed DirecTV's name under review. "We haven't decided yet how we are going to brand it," he said. "We're testing the DirecTV brand and the AT&T brand, so we're doing a lot of thinking." He was also flippant about the position the company will take on over the top video.

Stephenson said it was "inevitable" that the traditional "bundle" of cable television channels will crumble as more content travels "over the top" to customers via the Internet. He said he wanted AT&T to be part of that transition and was fully prepared for erosion of the DirecTV customer base over time. "We will go hard at 'over the top' and will invest in the tech platform and content," he said, adding that AT&T has weathered such transitions repeatedly during his time at the company. "We build this into our models. I've gone through these transitions more than I can count. They all look the same. The new stuff grows really fast, and margins get compressed. Once you have 30% penetration, you can get your cost structures in line and then ride the growth curve."