Verizon today spoke for the first time publicly about its plans for the 700Mhz spectrum, since the FCC auction ended on March 18. The FCC announced the end of the auction on March 20, but the company was prevented from commenting until the Commission’s anti-collusion quiet period rules ended yesterday.
In a conference call early this morning, Verizon Communications and Verizon Wireless executives told investors and analysts that the $9.36 billion worth of new spectrum it purchased was a “once-in-a-lifetime, transformative opportunity” for the company.
Verizon plans to leverage the spectrum it gained in the auction as part of its overall broadband strategy to take advantage of what it sees as significant growth opportunities in mobile data services.
“Broadband is a cornerstone of Verizon’s strategy overall,” said Verizon Wireless CEO, Lowell McAdam. “The industry isn’t just about people any more; it’s about a broad array of connections—digital media players, gaming consoles, appliances, energy management, fleet tracking, goods tracking. The constraint that we’ve had of thinking about our industry around just population really needs to be modified and we need to start thinking about connection. If you think of landlines as connecting places, obviously there are millions of places that can be connected. In the mobile environment, that shifts to counting people. But now, we are moving into connecting anything and everything together.”
Verizon Wireless was the winning bidder for a nationwide spectrum footprint (excluding Alaska) in the FCC-termed C-Block group of licenses, plus 102 licenses for individual markets around the country. The new spectrum, which will not be completely cleared for use until early next year, will increase the company’s average spectrum depth per market from 52 MHz to 82 MHz.
Executives also emphasized the importance of the acquisition to the company’s Long Term Evolution (LTE) network and its Open Development Initiative, first announced last fall.
“As broadband capability has increased on the wireless networks, we have seen all of the applications and all of the innovation that have before been confined to the network wanting to move to the mobile space. There is a tidal wave of innovation that is waiting to come over to the mobile platforms. We have restricted that because there was only so much that we could take in and process through our traditional channels. We took a lesson from Verizon here. It has open networks. We said we can do the same thing within wireless,” McAdam said.
Verizon Wireless plans to launch its LTE network in the 700 MHz spectrum as quickly as possible.
“We’ll be finalizing standards and beginning field trials in 2008,” said McAdam. “In 2009, we’ll be selecting vendors and doing advanced device trials. In 2010, we’ll launch the network commercially and have a rapid acceleration of the footprint to get to full deployment. We feel it’s important to move aggressively. LTE means tremendous scale opportunities.”
Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group.
Naomi Graychase is Managing Editor at Wi-FiPlanet.com