Ramping Up Smartphones Means More need for Cell Frequency Spectrum
Jan 1, 2012
There could be a small hitch in the projection that lots more frequencies are needed for cell phones.
Take the WiFi frequencies, for example. Everyone on my street has WiFi and the frequencies are
getting reused because the signal strength is low and each router only covers a small area.
I also have a femtotower that uses Verizon frequencies because my Hawthorn Woods home doesn't
get the Verizon tower signal very well. I have been asking for years why my cell phone cannot use my
WiFi instead of the cell tower. T-Mobile has offered WiFi as a backup to the cell tower and the
salesman bragged to me that he could use his T-Mobile phone in his basement where the T-Mobile
signal didn't reach with sufficient strength to be used. I asked him about cost and he told me that they
still charged me minutes of usage even though the signal was actually being carried by my internet
provider and not T-Mobile.
LEAP owns Cricket and they have not been doing well. John G. tried a Cricket phone and gave up on
trying to get it to work.
I am going to be shorting a number of cell phone companies because of the impending move to WiFi
phones. As I have mentioned many times before, it makes no sense for me to tolerate the poor
reception and missed calls that I suffered with Sprint and now with Verizon. If I am sitting in a WiFi
hotspot, why do I have my phone not answer a call but take a message instead? It is because Verizon
won't use the WiFi capabilities of the cellphone like T-Mobile does. The problem with T-Mobile, of
course, is that although they use the WiFi capabilities, they still charge me minutes for its use even
though the conversation is going over Comcast internet. The same is true of my Verizon Femto-tower.
Verizon not only charges me for the minutes going over Comcast, but if someone across the street
makes a Verizon call, should it be going through my femto-tower and over my WiFi?
So, I have installed a MagicJack unit. It is still not working properly, but when it does, it means that I can
use it instead of running up "minutes" on my cell phone.
Why have a MagicJack plugged into a laptop which links to my internet provider using WiFi? Why not cut
out the MagicJack and simply go from a cell phone directly to my WiFi?
Microsoft has seen this opportunity and paid $8.5 Billion for Skype. Skype is both audio and video and
can be used from a cell phone via WiFi to make a call. Using Skype, you will have Microsoft billing you
instead of your cell phone company. Will Skype stop the direct use of WiFi for next to no cost? I doubt it.
How can this house of cards remain standing? Only if all of the cell companies band together and refuse
to allow any phone that uses their towers to also use WiFi for free phone calls.
I have signed up for being a beta tester for a system which will be using WiFi in the manner that I have
been advocating.
Meanwhile I will be thinking of ways to make money off of this new trend. A trend likely to mean that T, Vz
and S stock prices will be going down.
57% of AT&T business comes from land lines and cell phones. What will happen to this stock when
investors realize that they are going to lose the low end of the business? Centenial offers cell plans for
$10 per month but that is subsidized by the federal government.
Start by checking out the AT&T Call and Put options. Try the JAN 2014 options table for starters. Notice
that the stock is selling at $30.24 as of Friday's close. Why are the vast majority of the PUTs
outstanding emphasizing the $25 strike rather than the more normal $30 which is closer to today's
price? Why are the $30 strike PUTs selling for much more than the $30 CALs? Is it that someone who is
willing to use leverage is very sure that the stock is likely to go down?
How can this house of cards remain standing? Only if all of the cell companies band together and refuse
to allow any phone that uses their towers to also use WiFi for free phone calls.
Finally someone is taking up the idea of having a WiFi phone at an inexpensive price. For $19 per
month, you get a WiFi cellphone where the use of cell towers is only a backup to WiFi use.
If you think of it, it is illegal to use a cell phone in your car while you are driving. You rarely need to
use your phone while walking. WiFi is probably available in your home and at work where you use
your phone a lot. If you are at Starbucks, McDonalds or Burger King, WiFi is free as it at more and
more places like the Mall or the Airport.
In this day of rapidly changing technology such ideas will be moving quickly. The first beta testing
for this system started November 8, 2011. They will be shipping product before the middle of 2012.
I am continuing to advise people to stay away from all cell phone companies including companies
like LEAP because their value is about to stop their rapid rise.
I would also avoid buying AAPL because a very significant portion of their business is their cell
phones which are marketed at premium prices to cell companies. They only get the premium prices
by going through cell companies willing to pay Apple's high prices (rumored at $650 per phone)
because of their popularity. Republic Wireless will be offering WiFi phones with Sprint backup for
only $200 cash plus $19 per month. Whereas this won't sap away Apple's high-end business, it is
likely to do the following:
= Reduce the demand on the Sprint cell towers.
= Reduce the advantage that Verizon has because their frequencies can penetrate brick walls better
than Sprint's higher frequencies can. Since walls are a problem mostly in buildings where WiFi is
likely to be avilable (at work and in home basements), the big advantage of Verizon's 700 Mhz
frequency band (lower than Sprint) is about to be significantly diminished.
= As Republic Wireless continues to implement my previously described technology, AT&T and Verizon
will have no choice but to compete with similar technology.
In a few months, the stock market will wake up to the potential impact of this technology and your
Yahoo Finance and SeekingAlpha will announce that you should be shorting Vz, T, S and perhaps
even AAPL. MSFT's investment of billions in Skype may look like less of a deal.
Watch out for disruptive technologies like this big move to WiFi for cell phones.
donbot
Next
Jan 1, 2012
There could be a small hitch in the projection that lots more frequencies are needed for cell phones.
Take the WiFi frequencies, for example. Everyone on my street has WiFi and the frequencies are
getting reused because the signal strength is low and each router only covers a small area.
I also have a femtotower that uses Verizon frequencies because my Hawthorn Woods home doesn't
get the Verizon tower signal very well. I have been asking for years why my cell phone cannot use my
WiFi instead of the cell tower. T-Mobile has offered WiFi as a backup to the cell tower and the
salesman bragged to me that he could use his T-Mobile phone in his basement where the T-Mobile
signal didn't reach with sufficient strength to be used. I asked him about cost and he told me that they
still charged me minutes of usage even though the signal was actually being carried by my internet
provider and not T-Mobile.
LEAP owns Cricket and they have not been doing well. John G. tried a Cricket phone and gave up on
trying to get it to work.
I am going to be shorting a number of cell phone companies because of the impending move to WiFi
phones. As I have mentioned many times before, it makes no sense for me to tolerate the poor
reception and missed calls that I suffered with Sprint and now with Verizon. If I am sitting in a WiFi
hotspot, why do I have my phone not answer a call but take a message instead? It is because Verizon
won't use the WiFi capabilities of the cellphone like T-Mobile does. The problem with T-Mobile, of
course, is that although they use the WiFi capabilities, they still charge me minutes for its use even
though the conversation is going over Comcast internet. The same is true of my Verizon Femto-tower.
Verizon not only charges me for the minutes going over Comcast, but if someone across the street
makes a Verizon call, should it be going through my femto-tower and over my WiFi?
So, I have installed a MagicJack unit. It is still not working properly, but when it does, it means that I can
use it instead of running up "minutes" on my cell phone.
Why have a MagicJack plugged into a laptop which links to my internet provider using WiFi? Why not cut
out the MagicJack and simply go from a cell phone directly to my WiFi?
Microsoft has seen this opportunity and paid $8.5 Billion for Skype. Skype is both audio and video and
can be used from a cell phone via WiFi to make a call. Using Skype, you will have Microsoft billing you
instead of your cell phone company. Will Skype stop the direct use of WiFi for next to no cost? I doubt it.
How can this house of cards remain standing? Only if all of the cell companies band together and refuse
to allow any phone that uses their towers to also use WiFi for free phone calls.
I have signed up for being a beta tester for a system which will be using WiFi in the manner that I have
been advocating.
Meanwhile I will be thinking of ways to make money off of this new trend. A trend likely to mean that T, Vz
and S stock prices will be going down.
57% of AT&T business comes from land lines and cell phones. What will happen to this stock when
investors realize that they are going to lose the low end of the business? Centenial offers cell plans for
$10 per month but that is subsidized by the federal government.
Start by checking out the AT&T Call and Put options. Try the JAN 2014 options table for starters. Notice
that the stock is selling at $30.24 as of Friday's close. Why are the vast majority of the PUTs
outstanding emphasizing the $25 strike rather than the more normal $30 which is closer to today's
price? Why are the $30 strike PUTs selling for much more than the $30 CALs? Is it that someone who is
willing to use leverage is very sure that the stock is likely to go down?
How can this house of cards remain standing? Only if all of the cell companies band together and refuse
to allow any phone that uses their towers to also use WiFi for free phone calls.
Finally someone is taking up the idea of having a WiFi phone at an inexpensive price. For $19 per
month, you get a WiFi cellphone where the use of cell towers is only a backup to WiFi use.
If you think of it, it is illegal to use a cell phone in your car while you are driving. You rarely need to
use your phone while walking. WiFi is probably available in your home and at work where you use
your phone a lot. If you are at Starbucks, McDonalds or Burger King, WiFi is free as it at more and
more places like the Mall or the Airport.
In this day of rapidly changing technology such ideas will be moving quickly. The first beta testing
for this system started November 8, 2011. They will be shipping product before the middle of 2012.
I am continuing to advise people to stay away from all cell phone companies including companies
like LEAP because their value is about to stop their rapid rise.
I would also avoid buying AAPL because a very significant portion of their business is their cell
phones which are marketed at premium prices to cell companies. They only get the premium prices
by going through cell companies willing to pay Apple's high prices (rumored at $650 per phone)
because of their popularity. Republic Wireless will be offering WiFi phones with Sprint backup for
only $200 cash plus $19 per month. Whereas this won't sap away Apple's high-end business, it is
likely to do the following:
= Reduce the demand on the Sprint cell towers.
= Reduce the advantage that Verizon has because their frequencies can penetrate brick walls better
than Sprint's higher frequencies can. Since walls are a problem mostly in buildings where WiFi is
likely to be avilable (at work and in home basements), the big advantage of Verizon's 700 Mhz
frequency band (lower than Sprint) is about to be significantly diminished.
= As Republic Wireless continues to implement my previously described technology, AT&T and Verizon
will have no choice but to compete with similar technology.
In a few months, the stock market will wake up to the potential impact of this technology and your
Yahoo Finance and SeekingAlpha will announce that you should be shorting Vz, T, S and perhaps
even AAPL. MSFT's investment of billions in Skype may look like less of a deal.
Watch out for disruptive technologies like this big move to WiFi for cell phones.
donbot
Next
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