While 2011 is known for the failure of the AT&T/T-Mobile merger, 2012 most likely will be remembered as the year that the major carriers found other ways to gain control of more spectrum and announced billions in LTE build out plans. In addition to the Sprint/Clearwire deal and the FCC AWS-4 spectrum ruling reported in this issue, the year was rife both industry acquisition activity and government action bringing more wireless spectrum into play.
In October, the FCC cleared the way for a nationwide AT&T LTE network in the 2.3 GHz Wireless Communications Services band by approving a joint proposal between AT&T and Sirius XM Radio, which allows AT&T to deploy LTE with certain restrictions to protect the Satellite Digital Audio Radio Service.
In September, Bloomberg News said AT&T had engaged in a “spectrum spree cobbling together 24 deals worth $2.6 billion” over the previous four months. As AT&T announced its $8 billion rollout, known as Project Velocity IP, it said the $8 billion rollout was made through spectrum it has acquired through more than 40 deals in the last year, much of it in the Wireless Communications Service. Between its current holdings and transactions pending regulatory approval, AT&T expects to have about 118 megahertz of spectrum nationwide.
Not to say that Verizon Wireless was on the sidelines of the “great spectrum grab of 2012.” In August, it closed on the purchase of a number of AWS-1 and Personal Communications Services licenses from Leap Wireless for $188 million and the sale of one 12 megahertz Lower 700 MHz A Block license in Chicago to Leap for $204 million.
Late in 2011, Verizon Wireless entered into a $3.6 billion agreement with Comcast, Time Warner Cable and Bright House Networks for Advanced Wireless Service (AWS-1). The spectrum agreement, which included a marketing arrangement for Verizon to sell cable products and the cable companies bundle Verizon wireless products, set off antitrust alarms across Washington and led to even more spectrum deals to appease regulators.
To address FCC and congressional concerns regarding the purchase of the cable companies’ spectrum, Verizon Wireless offloaded a number of AWS-1 licenses to T-Mobile, which included, interesting enough, several licenses that it would only have if the cable spectrum deal with through. In other words, Verizon Wireless sold spectrum it did not yet have, in order to be allowed to buy it. That type of wheeling and dealing was par for the course in the last year as the FCC opened spectrum highways for broadband build out, while attempting to protect the competitive environment.
In the last year, Deutsche Telecom went from backpedaling from the U.S. market to announcing $10.6 billion in CAPEX in T-Mobile USA during the next three years, thanks to the infusion of spectrum of MetroPCS. T-Mobile’s LTE rollout to 200 million pops at the end of 2013 depends on AWS spectrum in the major metro areas that it will get through its merger with MetroPCS, which led to a two-by-10 MHz LTE position in nearly 90 percent of the top 25 service areas in 2013 and the a two-by-20 MHz position in 2014 and 2015.