Broadcom Pays $164 Million for Renesas 4G Wireless Chip Unit

Wireless chipmaker Broadcom said today that it will pay $164 million to buy the LTE wireless chip assets of Japan's Renesas Electronics.

Under terms of the deal, a team of chip designers based in Finland, the United Kingdom and India will become Broadcom employees, though the companies aren't yet saying how many people are involved. Bob Rango, Broadcom's executive VP and general manager of its mobile and wireless group, said the group of employees is largely composed of a batch of ex-Nokia chip designers who did some of the early work on setting 4G wireless standards. "This is a very experienced group of designers, many of whom were at the table when the 4G standards were set," he told me.

Broadcom had previously been seen as lagging rivals like Qualcomm in the development of chips for 4G phones.

Renesas had announced that it would stop developing its 4G wireless in June. Rango said the chips are already certified for use by several carriers, including AT&T in the U.S.; Vodafone, Orange and EE in the U.K.; and NTT DoCoMo in Japan.

Broadcom said the deal will cut into non-GAAP earnings to the tune of 12 cents a share when Broadcom reports its results of the quarter ending Dec. 31. It also expects the acquisition will cut into its fiscal 2014 earnings by 10 cents to 15 cents on a non-GAAP basis, but that it will be accretive to earnings starting with the 2015 fiscal year.

The company also boosted its outlook for the quarter ending Sept. 30, saying it now expects to report revenue in the range of $2.075 billion to $2.175 billion, and for gross margins to rise as much as 10 basis points.

Broadcom shares rose in premarket trading by more than one percent, to $25.51 per share.

Taking Aim at Cricket, T-Mobile Moves MetroPCS Into 15 New Markets

T-Mobile followed through Thursday on its promise to quickly expand its recently acquired MetroPCS brand into new cities.

The company announced a $40-per-month service and a pair of new devices that will come to 15 new markets as part of the MetroPCS expansion.

In the new cities, the MetroPCS brand will be used atop T-Mobile's network but set up its own stores, mostly through third-party exclusive dealerships.

MetroPCS will offer two new handsets in the new cities - the Nokia Lumia 521 Windows Phone and LG's Optimus F3 Android device. Customers will also have the option of choosing from six other models or bringing their own device.

The "$40, period" rate plan includes unlimited talk, text and data (including 500 megabytes of high-speed data), as well as taxes and fees for $40 per month.

"We're doubling the reach of MetroPCS in one fell swoop," T-Mobile chief marketing officer Mike Sievert said in a phone interview on Thursday. MetroPCS' current operation reaches about 100 million people. With the new cities, MetroPCS will be available to an additional 40 million people, with more markets planned for before the end of the year.

The move comes as T-Mobile rival AT&T is looking to acquire MetroPCS rival Leap Wireless, which sells under the Cricket brand. T-Mobile completed its MetroPCS purchase in May.

Cricket markets are a major focus of T-Mobile's expansion plans for MetroPCS, CEO John Legere said in an interview earlier this month.

"The vast majority of where we are headed are Leap markets," Sievert said. "AT&T is going after Leap, [but] it is going to take them months to get this done. Our view is, Leap customers deserve a better experience."

The new MetroPCS markets are:

Baltimore, Md.
Birmingham, Ala.
Cleveland and Akron, Ohio
Corpus Christi, Texas
Fresno, Calif.
Houston, Texas
Memphis, Tenn.
New Orleans, La.
Rio Grande Valley, Texas
San Antonio and Austin, Texas
San Diego, Calif.
Seattle and Tacoma, Wash.
Tallahassee, Fla.
Toledo and Sandusky, Ohio
Washington, D.C.

T-Mobile's Latest Promo Offers Entire Lineup of Phones for No Upfront Payment

T-Mobile is continuing to shake things up.

The No. 4 U.S. carrier on Friday announced a promotion that will offer its entire lineup of phones for no upfront payment. It isn't really dropping the price of phones, just spreading the entire cost of the phone over 24 months instead of using a mix of an initial down payment and monthly payments.

Still, the move shows the flexibility T-Mobile has since moving to a model in which it separates the cost of the phone from its monthly service.

"The number of reasons not to switch to T-Mobile this summer is ZERO," T-Mobile CEO John Legere said in a statement. "This is a fantastic offer and we're making it easier than ever for customers to get the latest amazing devices."

Under the new promotion, which starts on Saturday, customers can get a 16 gigabyte iPhone 5, for example, for no upfront fee and 24 monthly payments of $27 per month. The Samsung Galaxy S4, BlackBerry Q10 and HTC One are all $25 per month, while the entry-level Nokia Lumia 521 is just $5 per month.

The device fee is then added to T-Mobile's monthly service fees. Options range from a $50-per-month plan that includes unlimited talk, text and 500 megabytes of high-speed data to an option for $70 per month that includes unlimited high-speed data. Additional lines for family members cost $30 for the first extra line and $10 per additional line after that.

Though not cutting device prices, the move could nonetheless be attractive to those looking to get a new phone without a big initial cost.

Update: In a telephone interview, T-Mobile Chief Marketing Officer Mike Sievert said that the new option came in response to a move by AT&T to offer some devices for no money down.

"This is really about being fast and highly competitive," Sievert said. "We aren't going to cede one inch of the territory and of the momentum" it has gained from its "un-carrier" approach.

As part of its Next early-upgrade program, AT&T is offering a number of phones for no money down, with installment payments of $15 to $50 per month for 20 months. A Samsung Galaxy S4, for example, would cost $32 a month for 20 months under that program. (Customers would also pay AT&T's standard monthly rates in addition to the device financing payment.)

Sievert did not give an end date for T-Mobile's new offer, but said promotions such as these tend to run days or weeks, and not for months.

He also said this move was not the next step that Legere had hinted will come in the fall.

"Un-carrier 3.0 is still to come," Sievert said.

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