A beginner's guide to telecom jargon, part 3
This week, CNET tackles one of the hottest words in the industry, "spectrum," and explains the difference between selling a product and shipping one.
The mobile world moves at a breakneck pace, and it's difficult to keep up--even without the technical jargon most industry insiders throw around. And they do love to toss those terms about.
Last week, I dabbled in Wall Street-speak after AT&T and Verizon Communications reported their quarterly financial results. But today, I wanted to get back into some of the more technical (read: geekier) aspects of the industry.
So for some light reading, here are a few terms telecom experts throw around with the assumption that everyone understands them.
Spectrum: The term used to describe the radio airwaves that enable the wireless capabilities of cellular service. It's been the subject of a lot of attention in recent months. The wireless industry has long called for more access to government and commercial spectrum, but recently AT&T has used it as a primary lynchpin in its justification to acquire T-Mobile USA. AT&Tthat by combining its spectrum with T-Mobile's, it will be able to offer better service and reach more customers.
For such a simple term, spectrum is anything but. There is a wide variety of spectrum, with different radio waves running at different frequencies. In the U.S., the National Telecommunications and Information Administration decides what to do with the different types of spectrum, which includes selling them to individual companies.
It's often referred to "as the lifeblood of the industry," and is a finite resource. For a wireless carrier, if you don't have spectrum, you don't have anything.
With spectrum being such a hot commodity, the government gets dollar signs in its eyes with a potential sale. That's why spectrum has beenplan; regulators see the potential revenue reducing some of the nation's budget deficit.
In the past, a wide range of companies have been willing acquirers. One of the most recent major auctions saw AT&T and Verizon Wireless as big winners of licenses for spectrum that runs at a lower 700 megahertz, often referred to as "beachfront property" because its lower frequency helps it spread farther and better penetrate walls. That last auction generated $19.6 billion in revenue for the government.
So by that logic, the government can keep on selling spectrum licenses until the country gets back in the black, right? Wrong. Spectrum, unfortunately, is finite, and much of it is held by government agencies or the television broadcasters, who understandably have been unwilling to let go of such valuable assets.
On Thursday, the U.S. wireless carriers asked President Obama to CTIA says it hasn't gotten a response yet.held by the government for use by the industry. The
Multi-modal: Most recently, this word has referred to the types of new cellular base stations Sprint Nextel is putting in as part of its grand "Network Vision" plan. Simply put, it allows the base station to run on different modes, including a variety of spectrum frequencies and wireless technology.
In the "old days," a cellular tower would have a base station that looked like a large cabinet, all of it devoted to a single wireless technology and spectrum frequency. The modern whiz-bang cabinets, however, are much smaller and offer the ability to swap out "cards" that can connect to different technology.
This is important to Sprint's recent announcement that it will. All of it is enabled by Network Vision and multi-modal technology. Now only if off of its back...
iDEN: One technology that will not figure prominently in Sprint's big plans is iDEN, which stands for integrated digital enhanced network. It's the technology that powers the Nextel side of Sprint's wireless business, and is best known for its distinctive--if not incredibly annoying--chirp alerting a user of an incoming message.
The chirp signals an incoming message for an iDEN phone's unique walkie-talkie-like feature, much loved by construction workers and public safety officials. Other carriers have tried to emulate it, but with little success. Sprint is working on such a service on the traditional CDMA side, so Nextel customers have something familiar to jump to.
Impressively, iDEN is a 2G technology running in a 4G world. Even more amazing, there are still 5 million iDEN customers with Sprint, according to the company's.
That's why Sprint can't shut down the network right away, even though it would love to, since most of its customer defections come from Nextel. Sprint has set an expiration date, however, and it's sometime in 2013. Sprint's already bracing for the potential backlash from Nextel customers.
Sellthrough: Handset manufacturers love to brag about how many devices they've shipped. But there's a big difference between how many they've shipped, and how many have actually been bought by customers. For that, there's the sellthrough rate, something companies are a lot less eager to divulge.
Motorola Mobility yesterday said it shipped 11 million smartphones and 440,000 tablets in the . While the numbers looked OK, Chief Executive Sanjay Jha acknowledged it was still a mixed story and that sales to consumers didn't pick up until after a price drop. He said that the sellthrough rate was pretty good.
Motorola isn't the only company that relies on the number of devices shipped to prop up its perception. Research In Motion said in June that it shipped 500,000 PlayBooks, but have you seen one on the streets or in the office? Palm, before it was bought by Hewlett-Packard, also played the same game by boasting of a higher shipped-devices number, but at that point people figured out the sellthrough rate was pretty low.
The thing about shipping a high number of devices and suffering from a low sellthrough rate? The inventory builds up and it all comes crashing down. Just ask Palm.