Dear Visitor,

Our system has found that you are using an ad-blocking browser add-on.

We just wanted to let you know that our site content is, of course, available to you absolutely free of charge.

Our ads are the only way we have to be able to bring you the latest high-quality content, which is written by professional journalists, with the help of editors, graphic designers, and our site production and I.T. staff, as well as many other talented people who work around the clock for this site.

So, we ask you to add this site to your Ad Blocker’s "white list" or to simply disable your Ad Blocker while visiting this site.

Continue on this site freely
You are here: Home / Mobile Tech / AT&T Feeling a Spectrum of Pressure
AT&T Growth Plans Pressured by Verizon Spectrum Deals
AT&T Growth Plans Pressured by Verizon Spectrum Deals
By Mark Long / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
With its bid for T-Mobile officially over, AT&T faces a spectrum crunch exacerbated by the slowness of regulators to approve its earlier spectrum deal with Qualcomm, even as the wireless carrier is forced to part with advanced wireless solutions spectrum.

AT&T's loss of AWS spectrum is a break-up provision in the merger contract it signed with T-Mobile's parent company, Deutsche Telekom, last March. T-Mobile's AWS spectrum windfall, courtesy of AT&T, will provide coverage in 128 U.S. cellular markets, including Los Angeles, Atlanta, Baltimore, Boston, Dallas, Denver, Houston, Phoenix, San Diego, San Francisco, and Seattle.

Rival Verizon Wireless has already made several moves to take advantage of AT&T's AWS spectrum loss. Cox Communications said last Friday that it has agreed to sell Verizon its 20 megahertz AWS spectrum licenses covering 28 million points of presence (PoP) in exchange for $315 million.

"These agreements provide Cox customers with key enablers to mobility, such as access to Verizon Wireless' 4G LTE network and iconic wireless devices," said Cox Communications President Pat Esser.

Though AT&T is facing a spectrum crunch, "it doesn't strike me that ATT will capitulate to Verizon Wireless," said Lisa Pierce, Gartner's managing vice president of unified communications and network services.

"The loss of T-Mobile will spur ATT's LTE-related capital expenditure spending -- to rapidly implement LTE, LTE-Advanced and VoLTE -- especially on the 700 megahertz band," Pierce said in an e-mail Thursday. "This likely shift is welcome news to ATT's key network suppliers."

A Full LTE Blitz

AT&T's cash reserves will take a hit when AT&T posts a pretax accounting charge of $4 billion at the end of the fourth quarter to reflect the T-Mobile deal's break-up considerations. Still, AT&T had over $10 billion cash on hand at the end of the third quarter of 2011.

"Our strong cash flow gives us the flexibility to invest in our business, to retire debt and to continue to return substantial value to shareholders," AT&T CEO Randall Stephenson told investors last October.

The spectrum assets and widespread existing infrastructure that AT&T sought to obtain through its failed T-Mobile deal are currently the carrier's two principal problems. AT&T's data congestion woes will potentially enable more spectrum-rich rivals such as Verizon to attract more AT&T smartphone defectors moving from AT&T to its network.

On Monday, Stephenson signaled his impatience about the length of time it was taking the Federal Communications Commission to review the deal for Qualcomm's unused spectrum. He urged U.S. policymakers to allow "the free markets to work so that additional spectrum is available to meet immediate needs," and also called on Congress to "enact legislation to meet our nation's longer-term spectrum needs."

Meanwhile, Stephenson reiterated, "to meet the needs of our customers, we will continue to invest."

Fly in the Ointment

Cox stressed Friday that its AWS spectrum sales agreement with Verizon does not include Cox's 700 MHz spectrum licenses, Cox Wireless customer accounts or any other assets. Under a separate agreement, however, the two companies will become agents to sell each other's products and services through their respective sales channels, Cox said.

Cox also expects to participate in the SpectrumCo joint venture previously forged by Bright House Networks, Comcast and Time Warner Cable, which would lead to the further integration of wire-line and wireless products and services. Verizon's $3.6 billion spectrum deal with SpectrumCo -- under which the carrier will acquire 122 AWS spectrum licenses covering 259 million PoP -- was announced earlier this month.

The only fly in the ointment is that Verizon's latest spectrum acquisition agreements will be subject to FCC approval as well as antitrust review. Therefore, Verizon will doubtlessly face the same intense level of regulatory scrutiny that scuttled AT&T's bid for T-Mobile.

Tell Us What You Think


Like Us on FacebookFollow Us on Twitter
© Copyright 2018 NewsFactor Network. All rights reserved. Member of Accuserve Ad Network.