The open access restrictions mandated by the Federal Communications Commission on portions of the recently auctioned 700 MHz spectrum were among the main reasons AT&T chose not to bid for that spectrum but opted instead to pay more for that of the B-Block, which complements the slice they bought from Aloha Partners, according to AT&T Wireless President and CEO Ralph de la Vega.
Verizon Wireless paid $4.74 billion for a majority of the C block spectrum, while AT&T picked up 227 licenses in the B block of regional licenses. Verizon forked out $9.63 billion on spectrum licenses, and AT&T ponied up $6.64 billion. Some on Wall Street have criticized AT&T for paying too much for the Aloha Partners slice of the 700 MHz spectrum, but it seems like AT&T thinks paying a premium so it doesn’t have to share the network with others was worth it. “Our strategy was to acquire the spectrum that complemented our spectrum we acquired from Aloha,” de la Vega said on a conference all with reporters.
He pointed out that the company has enough wireless spectrum to cover 87 percent of the total U.S. population and 100 percent of the nation’s top 200 cities. Also during the call, AT&T officials said the 4G LTE wireless broadband networks based on the 700 MHz spectrum will roll out in 2012. De la Vega said the company has a road map to push the 3G speeds quite high — up to 14.4 megabits per second. (I am checking on this bit as my notes got a little smudged, the risk you run when writing with an old-fashioned ink pen.)
(I will update with details from interviews with AT&T executives.)
When I asked de la Vega whether AT&T would work with anyone outside of their traditional vendors, he said the company wants to explore all options and would be open to working with new suppliers, especially if they have interesting technologies and price points. In other words, don’t be surprised to see some Asian vendors bidding for the 700 MHz business.
15 comments so far
7:01 PM PT
Om,
The most intriguing part of the auction is the fact that Qualcomm won licenses. I believe Qualcomm is hedging its bets. If for some reason it is not able to get a royalty payment for its patent portfolio do not be surprised if Qualcomm becomes a operator
9:09 PM PT
Om,
For the sake of your ardent fan-following, can you write a CTIA 2008 summary? We are interested in your take on products, new deals, announcements, rumors, speeches, discussions and the fun.
Looking forward to your CTIA notes,
10:02 PM PT
@ Shane
Both me and Stacey are going to do a CTIA wrap up. Mine will be a slightly longer thought piece but stacey is going to do a reported wrap up. I am trying to get back to speed, but I haven’t hit the stride just yet. Hang in there for a few weeks to get me back to normal. or almost normal.
1:13 AM PT
The most intriguing part of the auction is the fact that Qualcomm won licenses. I believe Qualcomm is hedging its bets. If for some reason it is not able to get a royalty payment for its patent portfolio do not be surprised if Qualcomm becomes a operator.
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1:29 AM PT
Om,
You should not fuel the HSPA hype on theoretical speeds - ~14 mbs shared in a sector - that b/w will be shared.
Anyhow, I have used HSDPA for 18 months - I am generally pleased. Makes me wonder WhyMax?
3:37 AM PT
AT&T has taken a better decision and judgement for the benifit of their customers.
7:45 AM PT
ATT has got more up their sleeves than that! You don’t know the exec’s over there like I do, those guys are totally ruthless!
9:17 AM PT
[...] now, AT&T plans to deliver 3G services to 350 markets by the end of 2008. Om Malik has more on the AT&T angle. Verizon also talked up its broadband strategy and said the 700 Mhz auction win, which will cost the [...]
10:00 AM PT
To bad AT&T cant even get cellular coverage in a great deal of my state. This will work in 100 percent of cities, but I call bullshit on 87% of America covered. I am literally sitting here cracking up.
3:33 PM PT
[...] now, AT&T plans to deliver 3G services to 350 markets by the end of 2008. Om Malik has more on the AT&T angle. Verizon also talked up its broadband strategy and said the 700 Mhz auction win, which will cost the [...]
3:42 PM PT
I have to think that 87% of America is a lot of CRAP.. 1000% hogwash. ATT has Hi Speed 24 miles north of me… 45 miles East of me, and has promised for the past 7 years, (When we can afford to) they allow some less than Hi Speed, charge $49.95 a month for 128 to 256 kbps average.
and They can not afford…10 years ago they layed FIBER OPTIC across the street. The local telephone repair people, can verify the telephone system locally here is just over 30 yrs old (that suks also)… when it sprinkles (rain) over 20% of town looses telephone for 1 to 3 days.. depends on amount. ATT suks and they know it…
7:41 PM PT
Om, now that the participants can talk more openly, I think there was enough drama in the auction to warrant a movie like I wrote below
http://dealarchitect.typepad.com/deal_architect/2008/04/auction-73—th.html
10:31 PM PT
Additionally, as I posted on my blog at http://blog.compaholics.com/2008/04/04/verizon-to-rollout-4g-network-by-2010-maybe/ Verizon said that LTE/4G might rollout in 2010 along with AT&T in 2012.
4:33 AM PT
[...] Engadget has details for AT&T’s plans for the B Block and Aloha Spectrum that they recently purchased. It will be used for LTE 4G. Read about it here. Gigaom also wonders if the open access restriction might have undervalued the spectrum. [...]
10:52 PM PT
Do US 700 MHz Spectrum Auctions Tilt the Scale in Favor of LTE?
The results of the US spectrum auctions in the 700 Mhz band are out, as are the plans of some of the major players which have won the auctions.
Verizon and AT&T have been the largest two successful bidders. AT&T has already announced plans for using this spectrum for LTE. Verizon could also be looking at similar use. Echostar, the fourth largest bidder has also given signals that the spectrum may be used for Mobile TV extensions of the Dish Network.
Where does this leave WiMAX where the WiMAX forum had given signals to develop profiles in the 700 MHz band. In fact the WiMAX Congress Asia 2008 ( 9-10 April Singapore) is set to discuss the policies of 700 MHz use in its regulatory sessions.
It also raises questions on how the digital dividend will be treated in Europe and Asia? Will it also be used for LTE? Quite unlikely considering the state of broadcast networks and the need for future requirements. This leads to a risk that LTE technologies may also develop in incompatible bands globally. If AWS band used for mobile phone use is not enough, we have another case here.
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