No. 2 U.S. mobile operator Verizon Wireless on Friday laid out its broadband plans in the wake of the $9.36 billion worth of spectrum licenses the company said it purchased in the recent 700 MHz auction.
The announcement came only hours after AT&T and Qualcomm, the other big spenders in the airwaves auction, revealed how much they had spent and the licenses they had acquired in the auction which ended on March 20.
On Thursday auction winners, who had laid out a whopping $19 billion, were finally allowed to disclose details of their spending as a Federal Communications Commission gag order designed to prevent collusion ended.
With this huge cache of valuable spectrum, the wireless industry now embarks on what Verizon CEO Ivan Seidenberg called a "transformative opportunity." But it could also create opportunities in unexpected areas.
AT&T acquired $6.64 billion worth of spectrum licenses in the auction, while Qualcomm purchased $558.1 million worth of spectrum in mostly urban centers.
Mobile chip maker Qualcomm said it will use its spectrum to enhance the coverage of MediaFLO, its mobile TV network.
Both AT&T and Verizon said they will use their spectrum to build networks based on Long Term Evolution (LTE), a high-speed broadband technology that could achieve wireless broadband speeds approaching 100 Mbps.
AT&T plans to roll out its LTE network starting in 2012, while Verizon plans to begin its rollout in 2010.
The time taken by both carriers to design, construct, and test these networks could create a much needed opportunity for WiMAX, an LTE rival technology championed by Sprint Nextel and Clearwire among others.
"AT&T's and Verizon's LTE timetables create at least a two-year window for WiMAX which Sprint can use to get back in the game," said Tim Farrar, president of Telecom Media and Finance Associates. "If Sprint and Clearwire don't get things going in the next couple of years, they are going to be swamped by LTE."
Sprint and Clearwire, the two largest WiMAX carriers in the U.S., are in the process of putting together a joint venture that will invest in a common nationwide WiMAX network used by both carriers.
And Verizon Wireless which acquired spectrum which according to FCC rules must be open to all comers said it will help the FCC flesh out its “open” rules.
“I did not appreciate all of the conditions the FCC placed on the C Block but now that we have had a chance to explain our position, I think the FCC's expectations will be more than met by the kinds of things we are doing,” Mr. Seidenberg said.