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Further Thoughts on Velocita

Posted on Sunday 18 December 2005

Carl wrote that my requiem for the US Mobitex network might be premature.

With usership [of the Mobitex network] way down from the peak, Sprint could reallocate 2/3s of the Mobitex sprectrum to iDen in metro areas without reducing the Mobitex coverage footprint. Maybe I’m being optimistic, but I don’t believe that Sprint will shut down Mobitex.

I fully expect more information about the deal to surface this week, given that the deal wasn’t made public until Friday.

In the meantime, Carl, I wish I shared your optimism. The press release could have easily been written to include an unconditional pledge to continue operating the network, but instead contained hedge heaped upon hedge:

“…will continue to honor existing Velocita customer contracts…will work with customers as appropriate to provide wireless network services that most closely meet their business needs…will enhance the iDEN network nationwide and will help ensure Velocita’s customers’ needs are fully met…”

That just doesn’t sound to me like they’re planning on operating a third network. (But it does sound like they aren’t planning on shutting down iDEN any time soon, doesn’t it?) And integration would cost them a bundle – more on the business side of the house than the network side.

I keep coming back to the basic question: spectrum aside, what does Mobitex offer that Sprint Nextel doesn’t already have? Other than reliability of delivery, the answer is nothing. For messaging services, SN can offer several flavors of BlackBerry. For notebook connectivity more than a few models of CDMA radiomodems are available. And there are plenty of OEM radios available for CDMA as well; our old pal Tom French sells a bunch of them.

We know that migrating from one data network to another is tricky, but it certainly can be done. We learned that when the CDPD networks finally went off line.

I think Sprint Nextel’s current plan is to operate the network only as long as they have to. Now, some of Velocita’s larger Mobitex customer certainly have significant clout and leverage with Sprint Nextel, and may be able to use that power to force SN to keep operating Mobitex, maybe even as a private network. And the press release certainly left SN some wiggle room. But I guess that SN probably has already assigned some pretty smart people to figure out how to offer comparable services to those large and powerful customers.

And there’s one other interesting little tidbit in all this: there have been rumors floating around for months that SN would sell the iDEN network to the Feds. Maybe what they’re doing is putting a nice little package deal together: iDEN plus Mobitex, all wrapped up with a pretty ribbon around it, and sold to the one customer who needs reliability above everything. Hmmmm.


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