Mexican billionaire Carlos Slim is financing an Internet TV network that will include an interview show with former CNN television host Larry King, and could be running by October, reports Reuters. Slim’s America Movil, one of the world’s biggest telecommunications firms, will fund the venture. Financial details were not disclosed. América Móvil provides services to 246 million mobile subscribers in 18 countries.
Comcast faces little or no competition for its TV, broadband and phone services. According to the FCC, just 7 percent of U.S. households have a choice of cable providers. Broadband providers, via cable and DSL, are the gatekeepers for IPTV services. Phone and cable operators are duopoly franchises. They control broadband fees. It’s the FCC’s “unregulation” policy.
America Movil also owns Tracfone Wireless, the largest prepaid phone service in the United States. It now is eyeing Simple Mobile, a mobile virtual network operator (MVNO), reports Reuters. Simple Mobile is a T-Mobile MVNO reseller. It provide wireless voice, messaging and data services to more than 2.5 million subscribers the United States since they opened in November of 2009.
America Movil also wants to buy a stake in Dutch telecoms firm KPN, at a cost of around $3.5 billion. The price tag for Simple Mobile was in the region of $100 million and would not require America Movil to tap debt markets, says Reuters.
The move by Slim, the world’s richest man, will help his Tracfone business consolidate its presence in the United States. TracFone provides four brands of service: TracFone, NET10, Safelink Wireless, and Straight Talk. These brands differ by their prepaid minute rates and their underlying networks. They lease space on major cell phone network providers, including AT&T, Verizon and Sprint.
Slim’s main expertise is mobile and fixed-line phone networks, where he controls 70 percent and 80 percent, respectively, of Mexico’s markets and has a strong presence across Latin America.
If Slim wants to own his own spectrum, he should talk to Dish and Clearwire. But Dish doesn’t have any network infrastructure while Clearwire does. Unfortunately, the bandwidth requirements for wireless cable, even if you own 40 MHz of spectrum, is phenomenal. Could LTE-Advanced deliver 10-20 Mbps IPTV, cost/effectively?
Clearwire is dumping WiMAX for LTE-A, system-wide, beginning mid-2013. Their Time Division flavor of LTE-A, on the 2.6 GHz band, is expected to lower the cost of delivering bits, and enable voice over LTE. Clearwire’s 120 MHz of spectrum and compatibility with the Chinese and Indian TD-LTE standard, could deliver cord-cutters with fast, unlimited data and voice. Anywhere.
National sports networks like ESPN and regional sports channels account for about 50 percent of the cost of the average cable, satellite or telco TV bill. But the nearly zero infrastructure cost of “air” is hard to ignore.
Ericsson demonstrated evolved Broadcast over LTE at Mobile World Congress this January. eMBMS is a highly efficient means of broadcasting content to multiple users simultaneously, utilizing LTE networks. Sprint and Dish will soon have LTE-A and 160 MHz of spectrum between them. Clearwire (and Dish Networks) could lower the boom on duopoly providers. AT&T and Verizon don’t have the spectrum.
By 2014, U.S. spending on video advertising is expected to reach $5.5 billion. Total cable ad revenue was $30B in 2011, says NCTA. Slim wants a cut.
Apple, Google, Amazon, Microsoft and Slim Shady will buy spectrum. Crack a bottle.