Sprint Corp. Chief Financial Officer Tarek Robbiati thinks U.S. mobile data prices have room to fall further.
As LightSquared emerges from bankruptcy, and looks for ways to deploy another national 4G network, and as Dish Network continues to look for ways to deploy its mobile spectrum as well, it is hard to argue with the sentiment.
Noting that U.S. average revenues per user are “very, very high,” Robbiti argued there is room for mobile data prices to fall further. “There is headroom," Robbiati said.
In a perhaps worrying statement, Robbiati noted that "in Hong Kong you can get very, very decent 4G data packages on 4G networks for less than $5, which is extraordinary. "This is real priced-based competition, we haven't felt it here yet," he said.
Even ignoring intensification of the U.S. mobile marketing wars being waged by T-Mobile US and Sprint, the potential of one or two new facilities-based networks coming online, in some form, does raise the issue of additional supply, which should lead to demand impacts as well.
Much will depend on the specific business models. Dish spectrum might somehow wind up as "wholesale capacity" available to all, or might be acquired by an existing firm. LightSquared, in principle, might also become a wholesale network, usable by all mobile suppliers, rather than a retail competitor.
Still, it is hard to see any scenario where adding additional capacity, retail or wholesale, does not lead to more retail pricing pressure. In the former case, suppliers will be tempted to offer more for less. In the latter case, new competitors would be enabled.
Lower prices should not come as a surprise, since prices have been falling for a decade.
Lower prices should not come as a surprise, since prices have been falling for a decade.
LIghtSquared has received U.S. Federal Communications Commission approval to transfer spectrum licenses to a new entity, allowing the company to plan for emergence from Chapter 11 bankruptcy.
Under new leadership, including Ivan Seidenberg, the incoming company’s new chairman of the board, the new LightSquared will be able to resume its efforts to build a national Long Term Evolution (LTE ) fourth generation network using former satellite spectrum in the “L band.”
LightSquared ran into a regulatory buzz saw when GPS interests complained about interference with GPS devices in neighboring frequencies. LightSquared has a license in the 1525 MHz to 1559 MHz band, while GPS devices operate in the 1559 MHz to 1591 MHz region.
LightSquared will have up to 40 megahertz of spectrum to support its national network.
The company originally filed for bankruptcy protection in May 2012. GPS users complained that the network would interfere with equipment that requires precise location data.
Ironically, some might note that GPS interference with LightSquared was demonstrably greater than LightSquared interference in the GPS bands.
In principle, Lightsquared and GPS will now have to reach a deal that would satisfy both while leaving consumers much better off.
source: Statista
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