Verizon Communications said today that it will use the wireless spectrum it acquired in a government auction last month to bolster its wireless broadband services with the launch of a new service slated for 2010.
Verizon Wireless, which is jointly owned by Verizon and Vodafone, said that the spectrum it won in the Federal Communications Commission’s (FCC) 700 MHz auction was a critical piece of its overall broadband strategy.
Verizon said that the spectrum will help the company reach its goal of deploying Long-Term Evolution (LTE) network and Open Development Initiative and the resulting next wave of wireless innovation.
Verizon Wireless was the winning bidder for a nationwide spectrum footprint in the FCC’s C-Block group of licenses, as well as 102 licenses for individual markets around the country.
In all, the company will pay $9.36 billion for these licenses, which equates to $1.03 per MHz Pop, compared with the auction average of $1.20. Verizon paid $4.74 billion for the largest single C-Block portion of the spectrum.
The FCC announced auction results on March 20 (story here), but Verizon and other winners were limited on commenting until the Commission's anti-collusion quiet period rules ended late yesterday.
Verizon said the new spectrum, which will not be completely cleared for use until mid- February 2009, will increase the company's average spectrum depth per market to 82 MHz, from 52 MHz today.
"The spectrum we purchased in this auction, combined with our existing portfolio, provides new flexibility as we execute our high-growth business model," said Lowell McAdam, the company's president and CEO. "We now have sufficient spectrum to continue growing our business and data revenues well into – and possibly through – the next decade, and this is the very best spectrum with excellent propagation and in-building characteristics.”
Verizon released the information about its plans for the wireless spectrum this morning in a conference call, while AT&T announced its intentions for its recently acquired spectrum yesterday.
AT&T’s Ralph de la Vega, the president and CEO of AT&T’s wireless unit, said its acquisition of the wireless spectrum in the auction better suited the company’s needs because it was less-regulated than what Verizon purchased and complements AT&T’s existing wireless holdings.
AT&T won bids for the B-block spectrum in the FCC auction. Previously, AT&T had purchased Aloha Partners, which gives the company C-block spectrum without the open access requirements that FCC chairman Kevin Martin has been pushing for. AT&T spent $6.64 billion for its B-block licenses in the FCC’s 700 MHz auction and $2.5 billion for Aloha.
“Results of the auction bidding demonstrate the B-Block was the most-attractive, most-valuable spectrum available, and it was the best investment for AT&T and our customers," said de la Vega. "Our winning bids for B-Block spectrum, combined with the C-Block spectrum we acquired from Aloha Partners, significantly enhances AT&T's spectrum portfolio, which is already one of the broadest, highest quality and most efficient in the industry."
Upon final award of the auctioned B-Block spectrum, AT&T said its 700 MHz spectrum will cover 100 percent of the Top 200 markets and 87 percent of the U.S. population.
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