Verizon Lobbies Postponement of Next Year’s 600 MHz Wireless Spectrum Auction

by Istvan Fekete on February 18, 2015

Verizon has plenty of spectrum to power all its wireless services, having spent more than $10 billion on wireless spectrum licenses last month, the carrier’s communication chief technology officer, Tony Melone, said on Tuesday during the earnings call.

“With the addition of the licenses won at this auction we have spectrum holdings that allow us to cost effectively meet the anticipated growth needs of the business in the near term,” Melone told investors on the call.

Early next year, the government has plans to launch another spectrum auction. The above statement questions whether Verizon will participate in that auction. At first, it seems as though the statement sends the message that it won’t, but it is more likely a message to the government saying that it would be better to postpone the auction to a later date.

By doing so, Verizon could position itself for more favourable terms during the bidding process and wait for a better political climate, giving the company time to recuperate from the last spectrum auction and other significant spending.

However, a delay of the spectrum auction could be a blow to smaller carriers such as T-Mobile and Sprint, players who were counting on the next auction to bolster their wireless services.

“You can’t take AT&T and Verizon out of the auction,” said Armand Musey, a managing director at Goldin Associates. “They make up more than 70 percent of the market. And they have much deeper pockets than anyone else that would participate in this auction.”

The so-called incentive auction is scheduled for early 2016 and will concern unused or underused spectrum in the 600 MHz band. The value of this band is in its ability to propagate signals over long distances and penetrate through walls.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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