Verizon is spending $1.9 billion to get its 5G network up to snuff. That’s according to a recent The Verge report stemming from a recent FCC spectrum auction. The carrier spent its money on 3.5 GHz band spectrum. That should help it to fill out its nationwide network, expected to land before 2020 ends.
Dish, which recently acquired a mass of spectrum and assets from Sprint as part of the T-Mobile merger, ranked second in the auction. But it didn’t spend half as much, at just $912 million. Hundreds of millions of dollars were also spent by Charter, Comcast, and Cox, with each looking to get in on the next-gen action.
Why is Verizon spending so much right now on 5G?
As noted above, it’s not unusual for Dish to be spending a lot on spectrum. The carrier, while still new, is well positioned to become the nation’s fourth-largest mobile provider. And it’s focus is primarily on next-generation networking. 5G offers big advantages over LTE in terms of bandwidth and latency, if not overall speed. Although that will eventually increase as well.
For the time being, nationwide 5G relies on spectrum similar to 4G. In many cases, utilizing the same hardware reworked to that purpose. And that’s the underlying reason for Verizon’s big spend here. Verizon has previously focused its 5G efforts on mmWave spectrum, spending its efforts on localized city build-outs.
That’s put it ahead on speed but well behind in terms of coverage. T-Mobile and AT&T, conversely, already have nationwide coverage but not the fastest speeds. Verizon is, in effect, playing catch-up with this purchase. The spectrum purchased at this FCC auction will act as a stop-gap for those shortcomings.
In the interim, Samsung is also reportedly working on 28GHz hardware for Verizon. The 28GHz small cells are something Verizon will utilize in its bid to beef up its network indoors, among other things, while the nationwide network is being built.
What about the other buyers here?
Speculatively, the other big buyers in this auction are likely looking to beef up their own offerings. Comcast and Charter, for instance, already offer carrier services. But they are MVNO’s for the most part, offering network coverage maintained and offered by competitors. Buying up spectrum will give the companies a much-needed boost when it comes to building out their own networks.