We know that LTE and 4G are going to power the next phase of the mobile revolution. LTE can hit near wired network download speeds and with the newest and most popular smartphones all LTE capable, carriers want to meet our need for speed with the spectrum to cover it. AT&T might be great at selling iPhones, but being awesome at LTE isn’t their strong suit, however a nearly $2B spectrum purchase from Verizon might help fix that.
Today AT&T announced that it will buy $1.9 billion worth of LTE spectrum covering 18 U.S. states from Verizon. Why is Verizon selling valuable spectrum? They are trying to finalize a deal that with cable companies that would let them expand, but not need more spectrum (and Verizon would then sell off more spectrum to competitors). From the Bloomberg article:
Verizon is selling airwaves to its biggest competitor after forging a separate spectrum deal with cable companies. Verizon won regulatory approval last year for a $3.6 billion acquisition of unused airwaves from Comcast Corp., Time Warner Cable Inc. and other cable providers.
Verizon said last April that it would sell other spectrum if regulators allowed the company to complete the cable deal. Advocacy groups such as Public Knowledge and Free Press had opposed the cable transaction, saying it wouldn’t promote competition in the telecommunications industry.
While this is a boon for AT&T to get more LTE spectrum (which it needs for LTE expansion) and nearly $2B must be nice for Verizon, it looks like Verizon is really playing a chess game to expand its own network through other means.