Smartcomm Sees an Active Secondary Ma...

Smartcomm Sees an Active Secondary Market for Spectrum Licenses

Posted in the Wireless Forum

Since: Feb 13

Phoenix, AZ

#1 Feb 7, 2013
The once looming spectrum crisis has now arrived. With data traffic reportedly doubling on an annual basis, the demand for spectrum is expected to exceed supply in some U.S. markets starting this year. The spectrum crisis is hitting Verizon and AT&T the hardest; the two companies collectively service about 200 million of the nation's 321 million wireless subscribers (63%). But, they also have the most money and therefore the ability to buy their way out of the problem given a friendly regulatory environment. So it's no surprise that with plenty of cash in hand, AT&T and Verizon have been on a spectrum shopping spree as of late, making huge purchases in the secondary market.

Let's start with AT&T. Regulatory approval of AT&T's bid to merge with T-Mobile in 2011 would have been a $39 billion, long-term solution to the company's spectrum capacity problems. But when the bid was rejected, the company had to revert to acquiring lesser amounts of spectrum in the secondary market from smaller players. And so, AT&T amassed at least $2.6 billion in spectrum deals in 2012. The most publicized transaction being its purchase of Nextwave wireless, a major holder of 2.3 GHz WCS spectrum, for $600 million. But AT&T also quietly acquired numerous licenses (mostly 700 MHz) held by small carriers and individual licensees such as Cavalier Wireless, David L. Miller, Comsouth Cellular, Ponderosa Telephone Co., Farmers Telephone Co., McBride Spectrum Partners and CenturyTel Broadband Wireless. AT&T's CEO, Randall Stephenson, recently confirmed that the company signed over 50 spectrum deals in 2012 and intends to do more in 2013.

He wasn't kidding. On January 22, AT&T announced it will purchase what is left of Alltel for $780 million. Then, on January 25, AT&T agreed to purchase 700 MHz B Block licenses from Verizon Wireless covering 42 million people in 18 states. Upon FCC and DOJ approval, AT&T will surrender five AWS licenses to Verizon in addition to a payment of $1.9 billion in cash ($3.77/ MHz Pop).

Verizon has a very clever spectrum acquisitions team. While AT&T was distracted by its attempt to acquire T-Mobile in 2011, Verizon swooped in and sealed the deal of the year. In August of 2012, the FCC's Commissioners unanimously approved Verizon's purchase of 20 MHz of nationwide AWS spectrum licenses from Comcast and three other cable companies - Spectrum Co.- for $3.9 billion. These licenses were originally purchased by multiple cable companies at FCC Auction in 2006 for $2.4 billion and should secure Verizon's position as industry leader for another year at least.

For Smartcomm, the high level of activity in the secondary market is extremely positive. High prices are being paid for quality licenses and we don't expect this trend to slow anytime soon. Stay tuned, 2013 should be an exciting year.

Tell me when this thread is updated:

Subscribe Now Add to my Tracker

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

Wireless Discussions

Title Updated Last By Comments
News Framingham Schools Has A Plan To Give Wi-Fi Acc... Jan 23 morris 1
News Wi-Power high-speed Internet, Digital phone ser... (Jun '10) Jan 19 cdg 61
News P.E.I. school Wi-Fi on schedule, says province Jan 15 marko 3
News Hundreds oppose planned cell tower (Jul '12) Dec '15 traffic lite 10 s... 4
News Muslim Detained on a Flight: I'm Your Biggest Ally Dec '15 Ritual Habitual 1
News Deming Truck Terminal re-opened (Jun '10) Nov '15 Shaminder singh 28
News Google honours Hedy Lamarr, inventor of technol... Nov '15 Linda 1
More from around the web