Valuable block of spectrum could net Verizon a big profit on the sale

Verizon may be considering a sale of its 700MHz "A block" spectrum, and its no surprise that T-Mobile and AT&T are both in line to make a bid for it. Although Verizon continues to actively use the 700MHz spectrum, it has indicated previously that it would part with the valuable piece of airwaves for the right price, naturally. It purchased the rights to the A block for $2.4 billion, and has indicated that it won't part with it for less than $2.75 billion.

Reportedly both AT&T and T-Mobile are poised to bid for the spectrum. AT&T already holds the rights to adjacent 700MHz spectrum, and certainly has the cash to buy it if necessary. T-Mobile on the other hand operates its network primarily in the 1900MHz and AWS (1700/2100MHz) frequencies, and the 700MHz spectrum is undeniably more valuable than what they hold now.

AT&T isn't particularly hurting for spectrum nor has it actively indicated it needs any more. T-Mobile is a bit of a different situation. Through the sale of debt and issuance of more common stock, T-Mobile has built up about $4 billion in cash recently — specifically to pick up more spectrum. The goal of expanding its LTE network is clear, and T-Mobile seems poised to spend the cash to make it happen.

Spectrum this valuable rarely goes up for sale without at least a little competition, however, so we can expect to see a good amount of money change hands for the A block soon.

Source: WSJ

There are 53 comments

Channan says:

First of all, if Verizon knows they can't handle demand in certain markets, why are they selling valuable spectrum?

Second, I hope T-Mobile gets it. That's what they need to finally start building a decent network that can provide signal indoors.

Moo Cow says:

I agree Channan. If they were to sell the spectrum, what would they turn around and use the cash on? You wouldn't just sell something for the sake of having the money. There has to be a long-term plan here.

I can't help but feel like there's a key detain or two missing that would make this possible sale a lot more understandable.

tdizzel says:

I have trouble believing that any multi-billion dollar company has any kind of long term plans. And if by chance they did have long term plans, I'm sure hey would be more than willing to detail those plans to every tech site on the internet.

hoosiercub says:

"You wouldn't just sell something for the sake of having the money."

Unless you're Verizon..

dudeman456 says:

Verizon 700Mhz spectrum equipment appears to be causing issues in some markets with cable tv systems, particularly Time Warner.

I wonder if this has anything to do with it.

Johnny Z says:

F Time Warner and their rip off prices.

Posted via my Shnexus 5

jbizzlefosho says:

I believe this is the reason. 700Mhz A block is right next to the spectrum used by over the air TV I believe, the 600MHZ UHF spectrum. I've read that interference happens between these two. If you ask me, it looks like Verizon is trying to unload an overly priced, un-usable asset. I could be wrong.

Also, I thought they were selling the B block? That would be more reliable as it wouldn't be right next to the 600MHZ UHF spectrum.

jsheehan223 says:

They're raising as much money as possible so they can buy back Vodafone's stake in the company. $100+ billion is a lot of money the last time I checked.

pheatton says:

I was thinking the same thing...

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Ry says:

Preparing for the 600 MHz auction?

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pdubbs03 says:

I have heard that the FCC Chairman has pushed back the 600 MHz auction to 2015 meaning the soonest it could be deployed is 2016-2017. I presume they figure their AWS holdings can hold them over until new lower band spectrum is available. FierceWireless today said Verizon plans on rolling out ~50 cities with AWS overlays of 40MHz of AWS. I have seen screenshots of NYC where they have it and speeds were ~80Mbpsx20Mbps.

Sabban says:

I get better indoor reception/data connection at my work with tmobile than I did with vzw, one of the reasons I switched

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Cares says:

It could be simply to pay down their debt. They did have to finance their purchase of Vodafone.

Atmarix says:

100% agree with you
Tmo has Amazing signal, but when it comes to indoors signal... Fail

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Ry says:

I hope T-Mobile gets it.

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NoNexus says:

I agree.

Tmo has done a ton on getting subscribers and laying out their plans. Now it is time to build out a real network or you can kiss all of this year's gains goodbye

So where is the competition for the Note 3? Oh right there isn't any...

Tmobile definitely will get it.

Posted from my Galaxy Note 3 on Tmobile via Android Central App

sahib lopez says:

YEAHHHH I would be one happy sub if they win that :D

coolbreeze78 says:

Alright, let's end the madness. Google, buy T-Mobile, then buy this spectrum.

Then blow everyone's minds with a ridiculous plan. Hell, support it with ads and charge $39/month for no BS unlimited everything. Tethering is an extra $15 limited to 4 gigs/month. Also offer an Obi-like home wifi calling unit along with hangouts VOIP. Every Google Wireless subscriber number is a Google Voice number with blocking, etc (today's features plus many future enhancements).

Give Nexus Phone purchasers free two months and a 12 month commitment. Leverage Fiber wherever possible. Take over the world, wirelessly.

You will turn the decrepit wireless industry upside down.

(a man can continue to dream, right?)

NoNexus says:

As long as you know that is where it will always be.

So where is the competition for the Note 3? Oh right there isn't any...

sahib lopez says:

that just brought shivers down my spine just thinking that o.o

coolbreeze78 says:

In a good or bad way? Can't tell.

tdizzel says:

I really don't like any of those ideas, but its your dream so go ahead and keep on dreaming.

coolbreeze78 says:

No dreams, just internet discussion. I, for one, think the US wireless industry is archaic and in desperate need of change.

But hey, let's all be content and overpay for a phone. AT&T wants $30/month to grant me the privilege of sending/receiving unlimited texts.

No. Nope. Hell no. Not paying for "pay for use" so I disabled texting on my account. It's almost 2014.

Lots of things are seriously broken with the wireless industry. Too many to count.

Google may not be the answer, and I'm sure the "ad supported" speculative comment sent shivers, but whatever the case, we need something new.

And since my dreamy ideas are terrible, what are yours? Curious.

hoosiercub says:

I fail to understand you people..

Yes, the US Wireless industry is archaic and in desperate need of change, Yes lots of us overpay for services that we know can and should cost less.

Jumping aboard a shitty carrier with an awful network full of more holes than a sponge isn't the solution, no matter WHO owns them.

What needs to happen is more regulation, force prices down in that manner, they can still be competitive and not completely holding onto monopolies, but the fact is, there are things in place to keep certain carriers from having coverage in areas of the country where others are entirely predominant.

The imaginary world that Google Voice users live in is a funny one too, where they don't need a carrier, they can do anything as long as they have a data connection, which is a glorious mobile life I must admit, until you actually become mobile and no longer have a connection, then your phone becomes a sad paperweight no matter how amazing your SoC is and the 150B GeeBees of RAM in it.

We need to meet somewhere in the middle, a look at the UK and most of Europe's scheme for wireless is a good start. Immediately though, people jump to conclusion that, "Hey, they have a lot less land to cover!" That's a damn correct and astute observation, they do in fact have a lot less land to cover, and when you compare the amount of money spent on infrastructure, I'm sure we grossly outweigh them, grossly. I mean in this day and age, if you have T-Mobile coverage, shouldn't you be getting AT LEAST 3G? I mean millions of Americans have only EDGE coverage by Geek America's darling little pink network. AT&T has greatly improved in recent years, adding HSPA to many areas that suffered from the same fate as T-Mobile's network does now with EDGE. Sprint, well they're the village bicycle, anyone who wants an MVNO can get a slice of that pie.

Then a lot of people blame CDMA, as some sort of devil in a disguise. The simple fact of the matter is that, yes despite CDMA's technology being inherent to allowing a carrier ludicrous amounts of control over their network/customers and the devices they put on it, it is simply a better technology for the simple uses of a cellular phone. Coverage is easily and cheaply widespread, call quality is vastly greater, penetration *especially the frequency that Verizon uses for their CDMA based network* is much better than equivalent GSM technologies, and back when everyone just wanted to have a mobile phone, it was the obvious and right choice to make. That said it's still a rock solid backbone to rely on and I can't wait to see them start to make the transition to VoLTE and see how well things hold up when it occurs.

So you are 100% correct in saying that the US wireless market needs shaken up, things are overpriced and overburdened, but it's not at the hand of the lack of resources, just laziness. Today you pick good coverage with a high price, or bad coverage that is bargain friendly.

JR A says:

You lost me at "needs MORE regulation"...

A895 says:

I like this comment.

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Techngro says:

Not everyone has to make the choice between good coverage and decent price. I have T-Mobile in NYC, and I assure you, the coverage is just as good as any of the other carriers here. I also pay only $30 for 5GB of LTE.

Also, Google Voice doesn't do MMS yet. Yes I know they send it to your email, but it isn't real MMS.

Krouget says:

I'd agree, his claims are very much based on location and other factors. I live and travel up and down the Northeast US, and coverage has been good with T-Mobile. In a number of surprising cases, it was actually better and certainly less bogged than VZW (with two devices sitting side by side on each network).

Low cost met good coverage, which works fine for the 96.7% of my time that I spend in these areas/cities.

NoNexus says:

I have the same thing with Sprint, 50+ per month but unlimited.

That is why these "my carrier is better than your carrier" arguments are stupid. Tmo sucks here, but sprint is great. Sprint is bad in some places.

The only thing that rightfully can get picked apart is price and these stupid share everything plans. Coverage varies too much

Evil Hamster says:

While I agree with MOST of your post, you are wrong about one point-

"What needs to happen is more regulation" indicates to me you believe in the fallacy that regulation of any business is good for the consumer. The sole purpose of ALL government regulation is to protect corporate profits and ensure there is no real competition.

cvgjava says:

My view is that less regulation, not more, is needed.
The wireless industry's single largest marketing dilemma (note marketing) is the subsidized phone model. The average non AC forum reader likely believes an iPhone cost $200 and and HTC One cost $100 when they see the price posted in store or in a sales flyer from Best Buy etc. The sooner the industry can work to decouple the phone from the service the faster you will see downward pressure on plan pricing etc. See ATTs move to reduce monthly share plan access charge by $15 when off contract. This was driven in response to T-Mobile. I am sure VZW will respond in some manner as well. Not regulatory driven at all but by the actions of a market disruptor, T-Mobile. (BTW I have ATT and am tired of the price and was looking to change and now not so sure) The subsidized model was helpful when rolling out smartphones as consumer uptake on $500+ devises would have been low and slow. But the hardware is becoming inexpensive enough that the model needs to change and is.

I don't believe US wireless is archaic at all. US offers LTE in all markets with many being covered by multiple carriers. Not even close in Western Europe where most markets cant come anywhere near US speeds on data. They do tend to offer good in building coverage on legacy GSM networks but they had a 10 year head start. Asia does offer great wireless data speeds. Considering the physical size of the US I am impressed that we have the speed and coverage that we do.

Rates for data in Europe are lower, however, given the speed advantage and the larger areas in which we are able to use our phones I argue the value is much greater in the US.

I believe we should see pay per use data models vs by the GB pricing. I know this drives the bit torrent and video streamers mad but I don't want to subsidize that model. By all means let youtube or skype or pandora or whomever either charge users or subsidize the data for their app.

Its not an easy solution and there are a wide variety of opinions and ideas. Some regulation is good. Too much is likely to make it worse.

tdizzel says:

I agree that the wireless industry is broken in the US. In my opinion, its because carriers have cared more about profits than about customer satisfaction and have been steadily moving backwards in the customer service area(T-Mobile mostly excluded from that)
When I got my first smartphone in 2009 I thought the plan I was on was great. Unfortunately that plan is no longer available, but fortunately I'm grandfathered in. Verizon had plans where you could honestly, truly save a lot of money depending on your situation, not this "Join our shared plan. Its what you want and you'll save lots of money, wink-wink" crap. In my situation I share an account with others in my family and I pay $40 a month and I have unlimited data, unlimited text, and about 10 times as many minutes as needed. Those types of plans need to be brought back.
And why would only Nexus users get some free service? Why should I go backwards(again, my opinion) with my cell phone selection in order to get rewarded for the honor of paying Google to provide cell phone service?
Nothing terrible about your ideas, they just don't work for me. But if we all stop having ideas, the world will truly go backwards.

kentrol72 says:

I'm sorry, but if you believe that the problem is that carriers care more about profits than customers, your just not being realistic. A successful business is going to price their goods and services where they see fit to maintain what they have now, build for the future, and put top dollar in their pockets. Its not charity work.

If you cant afford the plans one carrier offers, just say that. Thats a truth that no one can dispute or ridicule you for especially in this day and age.

Sent from my SG Note 2

imcaius says:

Interesting idea. They could even have a limit, and offer unmetered Google Play All Access, which would get them more subscribers (Spotify customers would swap for the unmetered)

dudeman456 says:

Interesting idea, but illegal if I am not mistaken. A long time ago if you wanted to see a movie you would have to gone to a theater owned by the studio that made the movie. This changed in order to make things more fair.

Google makes a mobile operating system with a large user base, Google also makes phones (Motorola). Google treats Motorola as a separate company forvthiscreason.

hotelmrrsn says:

If you have to pay extra for tethering then the "no BS Unlimited everything" can't exist. No BS unlimited should include using said unlimited everything in any manner i chose, whether on my phone or on my computer/tablet tethered to my phone.

Evil Hamster says:

A 4G tethering limit? Why would people want to pay for that? I currently use ~500G a month tethering on Verizon..

NoNexus says:

not legally

coolbreeze78 says:

Because it's fair. If it was truly unlimited, everyone would cancel their home internet and torrent via their LTE phone connection all day long. This is unreasonable. 4 gigs is reasonable, IMO to protect the network quality. 4 is obviously just a random number, but it has to be something other than full tilt all you can eat for the reason I describe above.

shredde says:

I think that if they sell off some of their 700MHz, they will finally begin choking on their own greed. I don't see the move to VoLTE working, if it's in the 1700 and up MHz ranges. The lower the frequency the better its penetration into buildings, etc.
If their so greedy to convince themselves that we're not going to notice the difference in call quality (and ability to obtain/maintain 4G data), then they are being run by people who care only about the short-term return on investment of their $, and not at all about the long term health of the company.
My dream would be to have all our cell service down to 50MHz so cell phones would work near as reliably as land lines, with fewer towers. But that is truly a dream, as Verizon is planning on moving in the opposite direction here in order to boost their short term profits.

Belatukadro says:

You don't get to be a company the size of Verizon, and constantly growing, with poor foresight and management of resources.
Verizon uses their Block C 700MHz frequencies for their 4G LTE network. The AWS spectrum they acquired is to help shore-up saturated networks in a few large markets where things have slowed down since their original deployment.
They are looking ahead to two things. First, they are looking at the upcoming spectrum auctions in the 600 MHz bands, which is even more valuable than the 700 MHz Block A spectrum they currently hold. By selling off their unused spectrum, they gain cash reserves, and deplete the reserves of their prospective competitors. Second, they are also looking forward to shutting down their CDMA network, which is currently running on 800 MHz bands, which are likely going to be transitioned either to expand Verizon's LTE-A, or more likely, used to begin the rollout of their next-gen network since it won't be able to be freed up until the vast majority of their users have LTE-capable devices, which is still a few years down the road.
To imagine that they are simply selling spectrum with no eye to the future is disingenuous at best. They have proven to be quite shrewd in their investments and overall management, and rarely make a move that has hurt them in the long term.

As huge as Verizon is, buying back that stake in their company back from Vodafone was Expensive. It's no wonder they're trying to recoup some of that money back. None-the-less its Extremely nice to have seen T-Mobile for the first time a few weeks ago finally announce they plan to "Expand" coverage, something they've repeatedly said in the past they had no interest in doing. So this is a very new day for T-Mobile, I love what they've been doing and sincerely hope that they get this spectrum. Att has much less need for it.

cgardnervt says:

I don't care who gets it! As long as it's more competitive and it allows my cell service to go down in price...... Wishful thinking I know! I can dream can't I?! :-D

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Amir47 says:

So my question is. Are current tmo phones able to operate on that spectrum? T Mo is not quite as forthcoming about what bands are on their devices like AT&T

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Mobius360 says:

Doubtful. They don't have any of that spectrum so why would they spend the money adding it to their phones?

Think about Sprint for a second, only a few phones can use their spark network. My old GNex only had one else of Sprints LTE spectrums.

It would probably take time to deploy hardware for that spectrum for T-Mobile and while deployment is underway phones would be released that can take advantage of it.

Posted via G2+

wicketr says:

It's dependent on the phone and the chip. More often now the "nice" chips are pretty generic and will work on most networks.

You'd have to look up your phone. For instance, here's the HTC One and the bands that it supports (via gsmarena)

2G Network GSM 850 / 900 / 1800 / 1900
3G Network HSDPA 850 / 900 / 1900 / 2100
4G Network LTE 800 / 1800 / 2600
LTE 1800 / 2600
LTE 1900 - for Sprint
LTE 700 / 850 / 1700 / 1900 / 2100 - for AT&T
LTE 700 / 1700 / 2100 - for T-Mobile

Kegman says:

this isn't something that can be rolled out in a year right? We are talking at the very least, available by the time you get your next phone?

Not forthcoming? T-Mobile doesn't hide which bands phones on its network uses. It's not that fault if folks are too stupid to simply look at the bands on devices they buy. A little bit of research goes a long way, unfortunately most people are lazy and like to blame those who aren't at fault.

Verizon got this spectrum on the condition that they have an "open" network.

They hoped everyone would forget!

Now how is that nexus 7 activation going on verizon again? Oh crap verizon has their own 7" tablet, and they are still "testing" the nexus 7.

The only way for verizon to keep the closed network is to dump this spectrum.

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Kegman says:

now that makes a lot more sense

badkitties says:

Verizon should not accept any bid lower than $4.3 billion.

Yeah right...