February 20, 2014 — In the wake of the AWS-3 spectrum, which drew a historic $44 billion in bids, panelists discussed when that spectrum will come into play at the opening session of the AGL Conference, Feb. 18, in Long Beach, California.
The session, “Spectrum, Technology and Tower Trends,” which was moderated by Kevin Brynestad, Alpina Capital, featured Brian Hyun, RBC Capital Markets; Mike Fitch, Keller & Heckman; and Michael Jones, Advanced RF Technologies.
At the conclusion of Auction 97, Verizon Wireless had an average of 40 megahertz AWS spectrum in 92 of top 100 markets. AT&T acquired licenses for a near nationwide contiguous 10×10 megahertz block of AWS-3 spectrum, allowing it to cover 96 percent of the U.S. population with contiguous AWS-3 spectrum.
The FCC requires the spectrum to be built out to 40 percent of the population served within six years and 75 percent within 12 years. The deployment cycle for spectrum varies from area to area and company to company, but carriers are likely to deploy it first in high-demand environments, according to Fitch.
“Realistically, you are looking at a couple of years before you get much traction for deployment of this spectrum considering there is a lot of infrastructure development in the pipeline that the carriers have planned and committed to,” he said. “The pressure point is that [the AWS-3] is enough spectrum that they will want to deploy it sooner rather than later, and it may disrupt or displace some other deployment in the pipeline.”
Deployment will become significant after three or four years and remain throughout the life of the spectrum licenses, he added.
While path for AT&T and Verizon Wireless is predictable, how DISH Network will use the spectrum that it won is a big question mark. As a satellite TV company, DISH is an outsider to the terrestrial wireless industry.
“What do they plan to do with all that spectrum and the other spectrum they already have? Are they going to get into the deployment business themselves? Are they going to partner with someone else? Are they are going to sell the spectrum?” Fitch said. “Trying to guess what Charlie Ergen is going to do next is a tough business. I am not sure Charlie knows what he is going to next.”
RBC Capital Markets has ruled out the possibility Ergen will build his own network or sell the spectrum, according to Hyun.
“Dish has four options: build out a network, sell the spectrum, buy T-Mobile or do network sharing with T-Mobile,” he said. “In an analyst call, Verizon said they would be open to leasing spectrum.”