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AT&T: Buying Up About $2 Billion Worth of Airspace

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macrumors Penryn
Original poster
Jul 11, 2003
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AT&T will pay Qualcomm $1.93 billion for a swath of spectrum licenses, as AT&T looks to bolster its fourth-generation service while Qualcomm plans to shut down its FLO TV service. Dow Jones reports:

The wireless chip manufacturer in October announced a device-sales suspension for its mobile broadcast video service, taking the first steps toward scuttling its entire project and freeing up some valuable wireless spectrum for sale. At the time, Qualcomm said customers would continue to receive programming into the spring.

It disclosed Monday that FLO TV will be shut down in March. Qualcomm had already disclosed restructuring charges of up to an estimated $175 million related to the October announcement, and the figure is expected to grow.

AT&T is buying spectrum licenses in the lower 700MHz frequency band. It plans to deploy the spectrum as part of longer-term plans for its fourth-generation network, once “compatible handsets and network equipment are developed.” The companies expect the sale to close in the second half of 2011.

The analysts seem to like the look of the deal. UBS’ Maynard Um writes that the deal could mean good things for Qualcomm investors looking forward to dividend boosts and buybacks:

We also view the sale as a positive as presumably the $1.925 [billion] sale price will increase QCOM’s domestic cash balance & should help support a dividend increase which we expect in fiscal 2Q11 (March ‘11 qtr), as well as share repurchases.

As far as AT&T is concerned, Cowen & Co. analyst Colby Synesael sees purchase of spectrum, which is essentially licenses to use a portion of the airwaves in a particular region, as a postive. We can’t help but wonder whether the deal will mean anything positive for iPhone users in markets such as San Francisco and New York who have been less than thrilled with AT&T service. Synesael writes:

The 12 MHz spectrum is in five of the top 15 U.S. metropolitan areas including New York and San Francisco where AT&T has had coverage issues in the past.
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They're behind the 8ball because all the other carriers are rolling out 4G, and from what the press release implies, AT&T needed this for their own 4G. In other words they don't even have the airspace to create 4G, so they're still year(s) off from having 4G.
 
maflynn said:
They're behind the 8ball because all the other carriers are rolling out 4G, and from what the press release implies, AT&T needed this for their own 4G. In other words they don't even have the airspace to create 4G, so they're still year(s) off from having 4G.
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Dr. Cox's "wrong! Wrong! Wrong!" speech is so appropiate for you right now. This purchase only adds to what AT&T acquired in the early 700Mhz Auction.
 
maflynn said:
They're behind the 8ball because all the other carriers are rolling out 4G, and from what the press release implies, AT&T needed this for their own 4G. In other words they don't even have the airspace to create 4G, so they're still year(s) off from having 4G.
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According to Wikipedia there are many different frequency ranges supported by LTE, so I'd imagine that even with no 700 MHz AT&T would still be able to roll out LTE by acquiring the rights to another frequency. Of course, this is moot since AT&T does indeed have 700 :)
 
It would seem that folks at cnet think the same thing.

That AT&T bought the bandwidth to roll out their 4G network. Again, it seems the purchase is needed for the 4G network and that they're behind the curve by just securing some bandwidth for rolling out 4G when T-Mobile, Sprint, VZW has already begun rolling out 4G devices.

Now perhaps they did purchase some bandwidth previously for this purpose, I do not know, but one thing is clear they dropped a boat of $$ to get this for 4G.

Either way AT&T needs to move fast or they'll be left in the dust.
 
When the 700 MHz auction was finished, Verizon had the coveted C block with total nationwide high-bandwidth coverage.

ATT won only some scattershot populated sections of the country, with only half the bandwidth. (See medium blue areas below.) That's why they wanted to buy more.
 

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kdarling said:
When the 700 MHz auction was finished, Verizon had the coveted C block with total nationwide high-bandwidth coverage.

ATT won only some scattershot populated sections of the country, with only half the bandwidth. (See medium blue areas below.) That's why they wanted to buy more.
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I hardly call what AT&T won (blue sections) scattershot.... I see more blue than red in there....
 
jav6454 said:
I hardly call what AT&T won (blue sections) scattershot.... I see more blue than red in there....
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That map is only of the B block winners. The colors such as red are for small carriers such as US Cellular.

As I said, Verizon won the C block that's nationwide. As in all the pink area below. Compare that to the ATT sections in blue above.
 

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kdarling said:
That map is only of the B block winners. The colors such as red are for small carriers such as US Cellular.

As I said, Verizon won the C block that's nationwide. As in all the pink area below. Compare that to the ATT sections in blue above.
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I recall a Gizmodo article that said AT&T focused on the Block A licenses. They even expeculated at the time that A block (12MHz of it) was going to be used in a national Wi-Fi network of some sort. Of course it may end up as pre-4G networking.
 
see to me that mess just is going to cause the same reason why the US 3G is such a mess in frequency. Verizon owns the GSM standard one which is why AT&T and T-Mobile use odd balls compared to the rest of the world. It looks like it will be repeated for 4G.....

It would be nice to say here is what the standard fequancy will be for cell phones everyone uses it.
 
Rodimus Prime said:
It would be nice to say here is what the standard fequancy will be for cell phones everyone uses it.
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Except the gov't made a boat of money auctioning off the spectrum and let the highest bidder dictate the frequencies, i.e., VZW winning the lion share
 
maflynn said:
Except the gov't made a boat of money auctioning off the spectrum and let the highest bidder dictate the frequencies, i.e., VZW winning the lion share
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while true does not change the fact that for cell phones put the US complete screwed up again just like it is for 3G using none standard feq
 
Rodimus Prime said:
while true does not change the fact that for cell phones put the US complete screwed up again just like it is for 3G using none standard feq
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No argument there, but this isn't the first time the almighty dollar was placed ahead of doing things the right way.
 
maflynn said:
No argument there, but this isn't the first time the almighty dollar was placed ahead of doing things the right way.
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My guess is if they did not do the bidding VWS ATT and others would of screamed as well since they could not lock out competitors from getting in on the action.

It is just another reason why the US tends to lag behind getting phones because everything is non standard. Only thing that really is standard from the GSM side is Edge.

T-Mobile gets screwed the most.
 
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