Verizon Wireless, AT&T See Good Short-Term Spectrum Capacity Outlook
Verizon Wireless has enough spectrum to meet its needs for four or five years, Verizon Chief Financial Officer Fran Shammo said Thursday at a Goldman Sachs investor conference. The carrier received FCC approval in late August for its purchase of 122 AWS licenses from SpectrumCo and an additional 30 from Cox Communications (CD Aug 24 p1). “This was an absolute strategic acquisition for us,” he said. Verizon Wireless expects to complete its deployment of LTE in its current 3G coverage footprint by the middle of next year via its 700 MHz spectrum. Once that happens, the carrier could start using its newly acquired AWS spectrum for LTE coverage, Shammo said.
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Verizon will be able to re-appropriate 2-2.5 GHz “slices” of its 3G spectrum over time for 4G LTE use, Shammo said, under the expectation that consumers will continue to use less of the 3G network as adoption of 4G LTE-capable devices continue to rise. “We think we have a pretty good path here, and I would say at least from where sit today, at least a four-to-five year path of where we have no urgency for spectrum,” he said.
The carrier will still continue to plan for future spectrum needs, Shammo said, including participating in the FCC’s upcoming incentive auction of broadcast spectrum. Verizon recently began the auction process to sell off its 700 MHz Lower A and B-block spectrum, but Shammo said it was too early to give details about the sale’s progress. “Right now, I think if we realize the value of that license that we think it is, I would say that’s probably a [Q3], [Q4] event for next year,” he said.
AT&T had a similar positive spectrum outlook. CEO Randall Stephenson said during a Goldman Sachs presentation Wednesday that the carrier is on track to receive FCC approval on its requested transfer of 51 Wireless Communications Service licenses from Comcast, Horizon Wi-Com and NextWave (CD Sept 20 p17). AT&T also plans to bid for Verizon Wireless’s 700 MHz B block spectrum. Between the two, AT&T could be in a good spectrum capacity position for between three and five years, Stephenson said. He praised the FCC for its plans to review rules governing the amount of spectrum a carrier can hold. “Right now there is zero clarity on what spectrum holdings are allowed,” he said.
As the FCC reviews those rules, it will have to deal with the issue of limited spectrum resources, Sprint Nextel CEO Dan Hesse said during a presentation Wednesday. “In that regard, they don’t want to be in a position where AT&T and Verizon can buy all the spectrum that becomes available in the market,” he said.
Shammo also updated investors on the progress of Verizon Wireless’s “Share Everything” shared data plans, which he said more customers are adopting than expected. Those customers are also adding more devices to the shared plans than expected, though Shammo declined to provide exact figures. Verizon Wireless began offering the “Share Everything” plans June 28. “The thing that really surprises us is a lot of people are coming off unlimited to go to [shared data],” he said. Those customers appear to be moving off the unlimited plans because they realize they are not using as much data as they thought, Shammo said. “Unlimited is just a word,” he said. “It doesn’t really mean anything.” AT&T began offering its own “Mobile Share” shared data plans Aug. 23 (CD Aug 23 p5). AT&T has noticed surprising numbers of customers on the plans have opted for the costliest data tiers, which can run up to $120 per month for 10 GB, Stephenson said Wednesday. Verizon Wireless and AT&T’s decision to move to shared data plans has helped Sprint Nextel differentiate itself through its marketing of its unlimited data plans, Hesse said Wednesday. “We believe that consumers want piece of mind and that insurance,” he said. “We provide that as part of unlimited.”