Wireless Carriers Spend Big to Grab Remaining Spectrum

by Matt Klassen on December 1, 2014

It is officially called the “Auction 97 in the Advanced Wireless Services (AWS-3),” what may be one of the last major spectrum auctions of the foreseeable future, and it has wireless providers working hard to ‘future proof’ their networks, shelling out billions as each compete to secure the resources necessary to meet today’s mobile demands, as well as establish a framework for the next generation of wireless network technology.

Early reports indicate that bidding in the Federal Communications Commission’s latest spectrum auction is skyrocketing, raising over $36 billion as of the middle of last week as 70 qualified bidders are seeking to purchase 1,614 available licenses in the 1695-1710 Mhz, 1755-1780 Mhz and 2155-2180 MHz bands.

As I’ve written before, spectrum is a strange and wonderous thing, one of the most necessary, finite, and thus valuable resources of the technology age; the powerful radio waves that create the pathways are our wireless data flow seamlessly across. The need for more spectrum is exacerbated by the fact that the current data demands once again are already stressing the available network technology, meaning carriers want to secure as much spectrum as possible, not only as they look towards the future, but as they look for a way to improve their networks for today.

It really comes as no surprise to hear that Verizon, AT&T, and T-Mobile are among the top players bidding for these most recent spectrum licenses. All these companies are looking to boost their spectrum holdings, attempting to stockpile this most finite of wireless resources in an attempt to increase their 4G network capacity, and, as some suggest, pave the way for the impending upgrade to next generation 5G technology.

Carriers are seeking to stockpile spectrum because “they’re looking to future-proof themselves,” Ronald Gruia, director of emerging telecoms at Frost & Sullivan, told the E-Commerce Times. “Spectrum is a valuable commodity, especially when you can combine it with more advanced techniques and, down the road, 5G.”

However, there are some who see this latest spectrum auction as nothing more than a way for carriers to improve their current services, suggesting that companies are really not looking that far ahead yet, and that the available spectrum is needed for today, not tomorrow.

“It offers more capacity for existing services but certainly doesn’t unlock particularly new business cases or innovative services,” said Phil Kendall, executive director of wireless operator strategies at Strategy Analytics “This is more about capacity to support medium-term data demands rather than allowing the carriers to do things they don’t already do.”

Aside from the auction itself, the presence of one particular bidder, Dish Network, is raising some eyebrows, as some see this as a precursor to Dish’s desire to acquire T-Mobile, having both secure spectrum independently before merging their forces in the aftermath.

There’s no question that spectrum is essential to delivering a high performance wireless network and carriers are willing to spend billions to secure as much of the finite resource as possible, hording and stockpiling both to improve network performance today, and perhaps establish a foundation for the networks of tomorrow.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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