- MobileX CEO Peter Adderton wouldn’t comment on a report that his firm is in talks with billionaire Charlie Ergen about resuscitating Boost Mobile
- Adderton continues to advocate for more regulations governing MVNOs
- New Street analyst Blair Levin concluded that silence from the FCC on EchoStar likely indicates a considerable gap between the two sides
Mum’s the word on whether MVNO MobileX is in discussions with EchoStar about some kind of hook-up between the two.
MobileX CEO Peter Adderton, one of the founders of the original Boost Mobile in the U.S., declined to comment this week on a report that EchoStar Chairman Charlie Ergen might be angling to somehow combine his Boost Mobile business with MobileX. Such a tie-up could resuscitate Boost, which has been losing subscribers since it came under Ergen’s ownership five years ago.
A spokesperson at Boost Mobile’s parent company, Ergen’s EchoStar/Dish Network, didn’t respond to a request for comment.
Fierce caught up by phone with Adderton after this week’s All Wireless & Prepaid Expo in Las Vegas, where MobileX hosted a reception for dealers and announced an expansion of its independent retailer program. MobileX uses Verizon’s network to offer mobile phone services that are sold via dealers and other retailers nationwide.
While the report of a tie-up with Ergen’s firm was off limits, Adderton was willing to talk about his take on the broader goings-on in the wireless industry, particularly where it intersects with the MVNO world, one in which he’s very familiar. After Adderton successfully founded Boost and sold it to Nextel Communications in 2003, he started another MVNO, Amp’d Mobile. That one didn’t fare so well, filing for bankruptcy in 2007.
Now as head of MobileX, Adderton said he’s got no beef with FCC Chairman Brendan Carr’s push to get Ergen’s spectrum into the hands of carriers that can use it.
He’s not exactly a fan of the current version of Boost. “The only thing that Boost had going for it was its heritage,” he said. “It was a cool brand,” but “they took the very thing that had value and changed it. There’s nothing there” that will make Boost whole again on its current trajectory.
But he’s not buying the idea that cable company MVNOs, led by Comcast and Charter Communications, will ever take the place of a fourth facilities-based carrier the way the MVNO landscape currently exists. Carr has said that there’s “no magic number” for how many carriers the U.S. needs to remain competitive, suggesting cable MVNOs are providing enough competition in lieu of a No. 4.
“You can’t come out and say the MVNOs are the fourth network and use that as your reasoning for potentially killing off the fourth network and then have the carriers become the judge, the jury and the executioner when it comes to the wholesale deal,” Adderton told Fierce.
He pointed to T-Mobile’s wholesale deal with Comcast and Charter as evidence of who’s in control here. T-Mobile CEO Mike Sievert made it clear during his company’s Q2 earnings call that T-Mobile’s cable MVNO is a play for T-Mobile to attract customers in the small and medium-sized business (SMB) segment – not the consumer arena or the very large enterprise segment.
Likewise, Verizon apparently didn’t want to do a deal with the cable companies that would infringe on its lucrative direct-to-enterprise business. Verizon’s MVNO deals with Comcast and Charter are focused on consumers.
“It’s make-believe” to suggest that, as big as the cable guys are, an MVNO is somehow going to “stick it” to Verizon, T-Mobile and AT&T. “It’s ludicrous,” Adderton said.
To change that will require regulatory changes from federal agencies like the FCC, he said.
“Regulation needs to come for MVNOs,” he said. “The FCC should have to grant licenses to the people who want to be MVNOs. My attitude is it should be valued like spectrum. If you have a license to be an MVNO, that should have some value. To me, the landscape has to change.”
Meanwhile, it’s EchoStar vs. FCC
In a note for investors today, New Street Research analyst Blair Levin said the inactivity revolving around the FCC’s inquiries into EchoStar’s use of spectrum and 5G network buildout obligations could be a sign of several things.
It’s plausible that the FCC and EchoStar will agree to a compromise in which EchoStar sells some spectrum but keeps enough licenses to operate as a fourth facilities-based network.
However, “we think the discussions to date have involved EchoStar suggesting various spectrum sales and Carr saying the offers were not enough,” he said. The presumption here is that Carr wants Ergen to throw in the towel on wireless and sell his spectrum licenses to the Big 3 wireless operators.
It’s also possible the two sides are discussing other issues, such as how the AWS-3 reauction will be conducted and that the negotiations are continuing with neither side facing a specific near-term policy deadline.
But he also noted the dynamic that usually plays out in Washington, D.C., during the month of August – generally not a time when significant events happen in D.C.
“We expect activity to accelerate again after Labor Day,” he said. “Still, given the dynamics, the discussions may continue well into the fall with no clear resolution that investors can then evaluate.”
Fierce’s short take: Enjoy the rest of the summer. Fall will be here soon enough.