We’ve all heard about the spectrum crunch and how carriers need more spectrum to keep their networks alive and performing well. Sprint has plenty of spectrum (in fact there’s a good chunk they aren’t using), some have said that Verizon needs more spectrum, but Verizon’s CFO Fran Shammo said today that they are not rapidly running out of spectrum. In fact, their LTE network is only using about 40% of their spectrum. Of course the other 60% is allocated to their 3G, Edge and Voice networks, which will change as those networks get shut down in the coming years. Shammo stated, “We are extremely efficient in the way we deploy spectrum. I still have 60 percent of [our] spectrum capacity sitting out there that I can move in time to create capacity within my network.”
Shammo also stated that the cheapest way to add capacity, used to be purchasing spectrum. Which Verizon did spend about $10.4 billion on spectrum licenses in the AWS-3 spectrum auction. Shammo said that now, it’s cheaper to improve their network by refarming their spectrum so that it is using LTE instead of old CDMA technology. Another way is to densify their network. Which the carrier is doing by building out small cells in parts of the US (particularly in busy areas). Shammo also noted that Verizon is seeing a 50-75% increase in data usage each year on their network. He also stated that they don’t see that number slowing down anytime soon.
Verizon will be continuing to deploy small cells, in-building wireless systems and diversified antenna systems, so they can meet the demand of their customers on their network. Shammo stated that you need to stay ahead of demand or else you’ll have a congested network. He stated examples of cities where the network can get congested easily “New York City, Chicago and LA.” All of which are usually first in getting new network technology, whether that be LTE, extended range LTE, small cells or something else.
In this speech at UBS, Fran Shammo also confirmed that Verizon will be taking part in the 600MHz incentive auction that is set for next year. The same auction in which Sprint has decided to sit out. Comcast hasn’t decided whether they are going to take part or not. And you can guarantee that T-Mobile will be there.