miércoles, 12 de noviembre de 2014

Five Ways U.S. Airwaves Auction May Change Mobile Service


Verizon Communications Inc. (VZ) and Dish

Network Corp. (DISH) are among 70 companies that can start bidding for

blocks of radio airwaves tomorrow in a U.S. auction designed to

help get data to your mobile phone faster.


Think of it as a chance for congested networks to add

capacity to keep videos from YouTube and Netflix Inc. streaming

smoothly to mobile phones and tablets.


The Federal Communications Commission's so-called Advanced

Wireless Services auction is billed as the biggest spectrum sale

in six years and may bring in $15 billion. We'll find out the

winners in a few weeks. Here's what you need to know:


CONSUMERS CAN GET BUFFER-FREE MOBILE VIDEO -- The auction

is one of several that the government has lined up to provide

more frequencies for use by phones, tablets and other mobile

devices. The extra airwaves will help wireless carriers fix

spotty coverage and add capacity where their networks are

overloaded. It will also help get information to your smartphone

more quickly and smoothly. Missing out on the auction could be a

setback for customer service.


VERIZON NEEDS SPECTRUM THE MOST -- Network congestion

caused Verizon's speed to fall behind AT&T Inc. (T) last year, and

the company then made sweeping upgrades to double the pace at

which it delivers videos and data. To maintain its reputation

for network quality, Verizon is going to need more AWS spectrum,

which is compatible with its current airwaves.


"This auction is incredibly important to Verizon," said

Jennifer Fritzsche, an analyst with Wells Fargo & Co. "They've

put a lot of money on AWS, which they've branded as XLTE to

consumers. They need more."


T-MOBILE HAS MOST TO GAIN -- As the smallest national

carrier, T-Mobile has played the underdog role fairly

effectively, particularly when it comes to competing on price.

T-Mobile's also been able to compete on service quality by

focusing on dense coverage in cities instead of blanketing the

whole country. T-Mobile and Verizon were top bidders in a

similar AWS auction in 2006.


SPRINT WILL SIT THIS ONE OUT -- Sprint is the only major

U.S. wireless carrier to not participate in this auction. The

company opted out in September, a month after a plan to merge

with T-Mobile fell apart and Marcelo Claure was hired as the new

chief executive officer to reverse years of customer losses.


For AT&T, these particular bands of radio waves aren't the

best fit. AT&T was one of the winners of the 2006 AWS auction.

Four years later, it was forced to give T-Mobile a large block

of that spectrum as part of a penalty when the 2010 merger

failed.


DISH'S CHARLIE ERGEN MAY DRIVE UP THE PRICE -- Dish Network

Corp.'s Chairman Charlie Ergen already has billions of dollars

of spectrum that he isn't using. The question is whether he'll

start his own wireless service, sell the holdings or lease the

airwaves to needy rivals.


One thing's for sure: This auction will set a new baseline

value for the spectrum he already owns. With so much on the

line, Dish may try to pad the price with a high bid. This could

backfire on Dish, the second-largest U.S. satellite TV operator

that has no wireless network.


"It wouldn't surprise me if his strategy is to get people

to recognize his spectrum's value," said Tim Farrar, founder of

research firm Telecom, Media and Finance Associates Inc.

"Depending on how aggressive he is, AT&T and Verizon could

leave him to spend billions on spectrum he wouldn't use."


To contact the reporters on this story:

Scott Moritz in New York at

smoritz6@bloomberg.net;

Todd Shields in Washington at

tshields3@bloomberg.net


To contact the editors responsible for this story:

Sarah Rabil at

srabil@bloomberg.net;

Jon Morgan at

jmorgan97@bloomberg.net

Elizabeth Wasserman




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