We so often hear about patent wars blazing between mobile device companies. We are witnesses to the advertising war between mobile service providers. All the while we cheer for our favorite “teams” and watch the wars like a sports event. Well there very well may be a new game to watch, not that this war has never been fought, rather hasn’t been seen for a while. According to the Wall Street Journal, T-Mobile and AT&T may begin a bidding war for Verizon’s 700MHz spectrum.
Surely you have seen the commercials provided to us by Verizon, where you see that they are not hurting in the service coverage department. Verizon recently showed us that they aren’t worried about other companies coming in on the 700MHz airwaves, when they sold what is being called “Block B” to AT&T back in September. That deal closed at $1.9 billion dollars, and gave AT&T licenses to the “Block B” 700MHz spectrum in over 15 states. Although, only in certain metro areas, more on that a little later. First lets discus T-Mobile.
T-Mobile, is in a more needy position than AT&T on this sell. Currently T-Mobile operates on 1900MHz spectrum as well as AWS, so getting a piece of the 700MHz licensing, would be a step up for them. This would bring them to a better position to compete with AT&T, and possibly Verizon, though not by much. Which brings us to why Verizon would want to sell off some of their spectrum licensing, and make money instead of service options.
The 700MHz spectrum licenses were acquired by Verizon back in 2008. The spectrums were auctioned off by the FCC. It was sold in three blocks, all of which Verizon picked up, “Block A”, “Block B”, and “Block C”. Now we already know that “Block B” was taken by AT&T, and now “Block B” is up for sale, but what about “Block C”?
Well there are some differences between all three blocks and the licenses that Verizon owns on them. All three blocks are a low 700MHz frequency, which means walls and distances are nothing to it. However, that’s where the blocks begin to separate from each other. The biggest issue for Verizon, is that “Block A” and “Block B” operate a bit differently than “Block C”. That would mean Verizon would have to make some adjustments to the chipset in order to get their devices to work across the board. Not to mention the licenses Verizon has for the “Block A” and “Block B” are smaller, and only compatible in metro areas of the states that they operate in. Which is just too picky to be worth it.
All these reasons could be why Verizon has no issue selling off their 700MHz spectrum licensing, well at least “Block B” and now “Block A”. Even though these didn’t seem worth it to Verizon to keep, it makes sense to sell them off and make a profit, as well as for a growing T-Mobile to snag them. Verizon will most likely hold onto “Block C”, since that’s where the have been building their LTE networks. So now we have the war between AT&T and T-Mobile.
T-Mobile has been growing a lot recently, and have stated in the recent past that they are looking to improve their spectrum. This would be a great step for them and so we expect them to not go down without a fight. AT&T on the other hand, doesn’t need the extra spectrum. They very well may only be in the running to keep it away from T-Mobile. Currently there is no telling exactly why AT&T would want the extra spectrum, but the mobile industry does seem to be a bit afraid of T-Mobile. What do you think, is AT&T just trying to make sure T-Mobile doesn’t get the spectrum from Verizon, or do they legitimately need it?