Friday, March 30, 2012

Local public telecom companies

As part of a conference on UC spinoffs, I presented a paper on the growth of the industry and its tie to UCSD. As part of that, I updated my January 2008 data on the small number of public companies in San Diego's telecom industry

Market Cap†
Change in 50 months
QualcommQCOM $114,900m
Leap WirelessLEAP
Maxwell TechnologiesMXWL
Novatel WirelessNVTL
Dot Hill SystemsHILL
† Market cap at 4pm EST Friday, according to

I knew that selling Qualcomm had been financially a bad decision. I had not realized that ViaSat and Entropic had done so well. In particular, Entropic has done tremendously well after a precarious start since its IPO. Meanwhile, Leap’s stock has fallen even more than Metro PCS since it rejected its repeated acquisition offers.

As an aside, Qualcomm has the 7th highest market cap on the NASDAQ: after Apple, Microsoft, Google, Oracle, Vodafone and Intel, but ahead of Cisco, Amazon, Amgen, eBay and Starbucks. There are only about 14 or 15 stocks on the NYSE with higher market cap (including IBM, AT&T, Coke and several banks and oil companies).

Wednesday, March 14, 2012

Cricket leaps into 4G strategy

Cricket has finally announced its 4G strategy: it’s going to license capacity from Clearwire, which has been providing WiMax to Sprint but (as long predicted) is shifting over to the industry-standard LTE next year.

More precisely, Clearwire is switching to the Chinese variant of LTE called TD-LTE — which presumably makes it easier to get more cheap phones from Huawei and ZTE. However, given Qualcomm’s support for TD-LTE, the cellphones may also be available from more familiar (i.e. Korean) smartphone brands. (VentureBeat sees this as another nail in the LightSquared coffin.)

San Diego-based Leap Wireless (dba Cricket) has lagged its longtime rival and erstwhile suitor Metro PCS on picking a 4G strategy. Given its size and scale — or lack thereof — licensing network access is probably the only way to get nationwide coverage.

The five year agreement to buy Clearwire capacity would seem to reduce some of the possible synergies between Cricket and Metro PCS, thus possibly discouraging another acquisition attempt during the life of the agreement. Perhaps that’s why the stock was down 3.8% on a day when the market was flat.