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Feb 7, 2013

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Telecom

Smartcomm analyzes the FCC's release of whitepaper on spe...

The Wireless Telecommunications Bureau of the Federal Communications Commission published a White Paper on February 26, 2013 addressing the challenges facing the United States and many other countries as they try to keep up with mobile broadband demand. The paper primarily outlined the opportunities and challenges in freeing up both licensed and unlicensed spectrum for mobile broadband. Read entire blog: http://www.smartco mmllc.com/wireless -blog/2013/3/fcc-r eleases-white-pape r-on-mobile-broadb and-spectrum-chall enges.aspx  (Mar 6, 2013 | post #1)

Wireless

Smartcomm Sees an Active Secondary Market for Spectrum Li...

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.  (Feb 7, 2013 | post #1)