Wireless

Phone giant AT&T sees big opportunity in building its own applications.

The phone company Wednesday announced it's buying privately held Plusmo for an undisclosed sum to help it build widgets and apps for mobile phones, PCs, and TV. Details of the transaction were not available.

Plusmo builds applications and widgets for mobile phones. But because it uses common Web development standards it should be easy for AT&T to use its technology to build applications across multiple operating systems. Once the acquisition is complete, Plusmo will become part of AT&T Interactive, AT&T said in its press release.

While most people don't think of AT&T as an application developer, the company has developed some of its own mobile apps. For example, it has developed several apps for the iPhone App Store, including a YellowPages app. It has also created applications for mobile phones other than the iPhone.

The acquisition of Plusmo should help AT&T develop new applications more quickly and more cheaply. It could also allow for over the air updates for mobile devices. But AT&T is also planning to use the technology to develop applications for its broadband customers and TV subscribers.

Plusmo says it offers a service that delivers more than 20,000 mobile widgets to consumers. It has also developed numerous sports-oriented applications offered on several platforms. The company has relationships with handset manufacturers, publishers, and carriers, according to AT&T.

Dopplr's CEO, Marko Ahtisaari

(Credit: Dopplr)

TechCrunch is reporting that Nokia has just acquired social travel start-up Dopplr. The rumored acquisition price is between 10 million and 15 million Euros, which is around $15 million to $22 million.

In an effort to stop the bleeding at the cell phone giant, Nokia has been acquiring a string of smaller companies. With intense competition from Apple's iPhone and RIM's Blackberry, Nokia has been struggling to keep pace in the mobile industry. Om Malik compares the acquisition spree at Nokia to what we have seen at Yahoo in the last few years.

It will be interesting to see how Dopplr as a service fits into Nokia's strategy. It's unclear at this point if it wants the business as it exists, its technology, or its talent. Dopplr has a fairly small, but hardcore user base and has intense competition from companies like TripIt, so it is a curious acquisition choice. If it keeps the service intact at all, look for Nokia to roll out a mobile version of Dopplr out as an exclusive app on their devices.

Deutsche Telekom could be weighing a multibillion dollar bid to buy Sprint Nextel within the next few weeks, said London's Daily Telegraph on Sunday. The German telecommunications giant has called on financial advisor Deutsche Bank to study a proposed deal.

As the parent of struggling T-Mobile, DT might see a takeover of Sprint as a way to revive its listless U.K. and U.S. operations. DT chief executive officer Rene Obermann has been unhappy with the performance of T-Mobile, blaming it for the parent's first-quarter loss of 1.1 billion euros ($1.46 billion) earlier this year.

Facing stiff competition for mobile customers, T-Mobile has struggled in the No. 4 spot behind Verizon Wireless, AT&T, and Sprint.

DT enjoyed a turnaround in the second quarter, taking in a profit of 521 million euros ($751 million). But T-Mobile's global operations have continued to drag, squeaking by through cost cuts rather than sales or customer gains.

Obermann's latest fix for the U.K. segment, announced last week, is a merger to join the British operations of T-Mobile UK and France Telecom's Orange. That marriage will create the U.K's biggest mobile provider.

Now T-Mobile U.S. may be next on the list. Complaining of structural problems with T-Mobile U.S., Obermann has sunk almost 1 billion each year to improve the U.S. network. But the investment has yet to pay off.

Reports of a possible DT takeover of Sprint first surfaced in May of 2008 but didn't go far at that time.

A deal that would merge T-Mobile U.S. and Sprint could create a mobile powerhouse. But analysts aren't sure Obermann can pull it off.

First, DT would need to figure out how to integrate three different types of wireless technologies, said Sanford Bernstein analyst Robin Bienenstock in a research report released Monday. After joining forces in 2005, Sprint and Nextel have faced headaches combining their two incompatible technologies. The situation could be worse for DT as it tries to assimilate T-Mobile's GSM, Sprint's CDMA, and Nextel's iDEN technologies.

Second, DT would need to cough up a lot of cash. To buy Sprint, which the Daily Telegraph said is valued at around $10.6 billion, DT would have to get a substantial injection of money from its shareholders, including the German government, which owns a 32 percent share of the company.

Despite the hurdles, the Sanford Bernstein report sees the deal as a positive, and not just for Deutsche Telekom. "For DT, an acquisition of Sprint may be the 'least bad' option," said the report. But "the U.S. wireless market is crying out for consolidation. In that context, the consolidation of a weak third and a nearly-as-weak fourth player in the market would be a welcome development...for everyone."

Sprint Nextel said Tuesday that it will buy Virgin Mobile USA for $5.50 per share in a stock deal valued at $483 million.

Sprint already owns 13.1 percent of the prepaid mobile operator. Virgin Mobile is a mobile virtual network operator, or MVNO, which means it uses another carrier's network to offer its service. The company uses Sprint's CDMA network.

The transaction, which is expected to be finalized in the fourth quarter of 2009 or in early 2010, represents a 31 percent premium over Virgin Mobile's Monday closing share price of $4.21.

Sprint also agreed to retire Virgin's outstanding debt when the deal closes. It doesn't expect Virgin Mobile USA's debt to be more than $205 million net of cash and cash equivalents by September 30.

The third largest nationwide wireless carrier in the U.S behind Verizon Wireless and AT&T, Sprint has struggled the past few years since its acquisition of Nextel. It has been plagued by a poor service reputation, and many customers have left the service. The company's new management team, headed by CEO Dan Hesse, has been trying to turn the company around and rebuild its public image. Earlier this summer, the company launched the highly anticipated Palm Pre smartphone on its network.

Sprint reports second-quarter earnings on Wednesday morning.

The acquisition of Virgin Mobile will help Sprint bulk up its prepaid business. Sprint already owns the nationwide prepaid brand Boost Mobile.

Boost Mobile made waves earlier this year when it introduced a $50 unlimited voice and data plan. Virgin Mobile, which is seen as one of Boost's main competitors in the prepaid market, soon followed suit with an unlimited offering of its own.

AT&T said it will pay $2.35 billion in cash to buy the bulk of the Alltel Wireless assets that Verizon Communications must divest as part of its acquisition of Alltel, the company announced Friday.

As part of the deal, AT&T will get wireless spectrum licenses, network assets, and 1.5 million subscribers in 79 service areas.

Verizon Wireless was required to sell assets in parts of 18 different states as a condition for getting regulatory approval to buy Alltel. The Verizon-Alltel deal, valued at $28.1 billion, was announced in June 2008, and closed in January this year. After the merger, Verizon Wireless became the largest U.S. wireless operator, surpassing AT&T in terms of subscribers.

So what does this mean for former Alltel wireless customers? Well, for customers in parts of Alabama, Arizona, California, Colorado, Iowa, Kansas, Michigan, Minnesota, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Tennessee, Utah, Virginia, and Wyoming, it means that they will become AT&T wireless customers.

The asset acquisition also included a few markets from Verizon Wireless and the former Rural Cellular, AT&T said in its statement. The old Rural Cellular, or Unicel as it was also called, had operations in parts of Maine, New Hampshire, Massachusetts, Alabama, Mississippi, Minnesota, North Dakota, South Dakota, Wisconsin, Idaho, Washington, and Oregon.

AT&T said in its statement that after the network and billing integration is complete, the new AT&T customers will have access to all the same phones and service plans available to all its AT&T customers, including free Wi-Fi for 3G LaptopConnect customers and qualified smartphone subscribers. And for interested rural wireless customers, it will be the first chance to get their hands on the popular iPhone, which is exclusively sold in the U.S. to operate on AT&T's network. These customers will also get access to other AT&T exclusive devices, such as the BlackBerry Bold.

AT&T's executives said that acquiring these assets helps fill a hole in its offering to rural subscribers.

"This transaction will complement our existing network coverage, particularly in rural areas," Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets, said in a statement. "The acquisition will add network assets, distribution channels and 850 MHz spectrum in a significant portion of the U.S., enabling even better coverage for AT&T's subscribers in those areas."

Also, as part of the deal, AT&T is selling Verizon its former Centennial Wireless properties. This deal, worth $240 million, includes licenses, network assets and nearly 120,000 current subscribers, in five service areas in Louisiana and Mississippi.

The deal is expected to close in the fourth quarter of 2009, contingent on regulatory approval, AT&T said.

Correction, January 21, 9:14 a.m. PDT: An earlier version of this story incorrectly described the scope of IBM's acquisition. IBM is acquiring only certain assets of Outblaze.

Computing giant IBM has announced its intention to acquire assets from a Chinese e-mail and messaging company.

Hong Kong-based firm Outblaze sells hosted multilingual e-mail and messaging services for other service providers, telecommunications companies, and corporations to operate under their own brands.

Outblaze intellectual assets, including code and staff, will become part of IBM Lotus' Bluehouse project, IBM's online-business and social-networking and collaboration service, IBM announced on Thursday. Bluehouse is currently in open beta testing.

"The acquisition of these Outblaze assets further demonstrates Lotus' commitment to delivering secure, scalable online solutions, and will help accelerate delivery of collaborative services, with little to no IT involvement," Bob Picciano, the general manager of IBM Lotus Software, said in a statement.

Security experts warned that companies considering moving to hosted e-mail services in developing countries should think about where their data will reside, and choose their provider carefully. While Hong Kong is a highly developed autonomous region of China, a report last week warned that emerging markets such as China are at greater risk of cybercrime, while the U.S. government warned in November that the Chinese government was using advanced cyberespionage techniques.

"With any hosted service, you have to do due diligence, look at the system and how it's being managed," said Andy Buss, a senior analyst at Canalys.

Buss recommended that businesses either use a trusted local company or one of the trusted larger providers, such as IBM, for hosted messaging services. The analyst added that as more workers start to rely on online tools, companies have to work out how to integrate tools and work flows.

Tom Espiner of ZDNet UK reported from London.

(Credit: Oz Communications)

Nokia is bulking up its communications platform with the acquisition of Oz Communications, a privately held Montreal-based company that offers mobile e-mail and instant messaging.

On Tuesday, Nokia said it would buy Oz for an undisclosed amount, bringing Oz into its services and software unit. The deal is expected to close in the fourth quarter.

Oz has been around for about five years. And the company, which has been working with Nokia since 2003, has raised more than $71 million. Its IM, e-mail, and social-networking technologies are used by several mobile operators, including Verizon Wireless, Sprint Nextel, T-Mobile USA, Alltel, and Rogers Wireless. With just 220 employees, Oz claims to have 5.5 million monthly paid users using its products.

The acquisition should fit nicely with other mobile social media and communication buys Nokia has made over the past couple of years, including those of Twango, Plazes, Enpocket, and Navteq.

With these acquisitions, Nokia has been amassing a portfolio that extends far beyond handsets. It is looking to extend its reach to services and applications, integrating devices with services and packing them with cool features such as navigation, mapping, and music. The idea is that the services will help differentiate the handsets from others on the market and also provide the company with additional revenue.

Nokia is still in the early days of executing on this strategy. It just officially launched its Ovi platform, which serves as a hub for many of its services. So it's difficult to say how successful it will be. The company leads the market, in terms of handset sales worldwide. But it's had a weak standing in the United States, where some of these more advanced services would likely play well.

Meanwhile, Nokia is facing competition from new entrants in the mobile market, such as Apple, with the iPhone, and Google, with the new Android operating system. These companies are also emphasizing services and applications as way to differentiate their products.

Apple launched the App Store earlier this year, when it released the new iPhone 3G. And the first Google Android phone will go on sale next month on T-Mobile USA's network. Like Apple's App store, Android also has a marketplace in which third-party developers can distribute applications for Android phones.

Brocade announced it plans to acquire Foundry Networks, in a deal valued at approximately $3 billion.

Under the agreement, Brocade will pay a combination of $18.50 of cash plus 0.0907 shares of Brocade common stock in exchange for each share of Foundry common stock, for a total value of $19.25 per share, the two companies said in a joint press release issued Monday.

Santa Clara, Calif.-based Foundry is a 12-year-old company that does enterprise and service provider switching and routing. Brocade's CEO praised it as "strong and well-respected" in their industry, during a conference call with investors and media Monday.

It appears that Brocade could be turning a page in a year that has thus far been a public relations nightmare for the company. In January, the company's former CEO was handed a long jail sentence for criminal misconduct. And last month the company found out it would be paying $160 million for Brocade Communications to settle a federal securities class action lawsuit tied to the company's stock option backdating practices.

On the conference call, CEO Mike Klayko said the two companies share a vision for the future of next-generation data centers and networks and that there are plenty of synergies between them that Brocade will take advantage of.

Brocade and Foundry's boards of directors have both approved the deal, but the acquisition is still pending the votes of Foundry's shareholders.

They expect the deal to be finalized in the fourth quarter of this year.