Cingular To Sell Its Mobitex Unit

For those of you asking, “What is the Mobitex unit?”: it’s a low-speed packet-based data network which has been running for over 10 years – much longer than the current wireless data hype cycle. A Wide area network with a large footprint covering 93 percent of the U.S. business population in 492 MSAs and 130 airports, Mobitex powered a number of pioneering mobile data devices such as remote meters, telematics, the groundbreaking Palm VII, and 25% of all the existing RIM Blackberries in the world! However, the Ericsson-based technology that is behind the network is an evolutionary orphan, rapidly being outpaced by GPRS, EDGE and 3G technologies. It doesn’t make sense for Cingular to operate multiple wide-area data networks, so we’ve been expecting them to pull the plug on Mobitex and migrate users to GSM-based cellular data networks. It seems Cingular has thought better of migrating these customers, and instead has sold the Mobitex network to Cerberus Capital Management along with some other related assets. The money they earn from this sale will help them fund their 3G expansion, which is likely to be a priority after the AWE merger. Although Cingular is also selling numerous subscribers to Cerberus, it seems Cingular is retaining the ability to market an upsell to these customers when they’re ready to migrate up from Mobitex. For satisfied Mobitex users, this sounds like good news (assuming Cerberus keeps the lights on): they can keep on using their existing radios until their equipment life-cycle is over, and spend capital to migrate to other technology only then.

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