The company will also be able to use the expertise in 3-G and data services that it has acquired in Europe in the U.S., she says. “As TMobile opens up and allows WiFi into the phones, it’s going to create customer expectations and perhaps force other carriers to compete in that space. The same thing with offering video services.”
Regional players increase competition and services
As a result of the auction, smaller carriers will now be able to fill gaps in many local service regions while providing more competition in metropolitan areas.
“The FCC sold a mixture of huge regional licenses and tiny metropolitan and rural service areas. By selling small service areas, it allowed the independent telephone companies and entrepreneurs to buy licenses in small rural areas that the big guys didn’t’ want. So I think you will see a significant increase in services in rural markets because of this auction,” says Charles Townsend, General Partner of Aloha Partners and President of Atlantic Wireless, which was one of the top ten buyers of spectrum in the AWS auction.
Four large regional carriers—NextWave, US Cellular, Leap and MetroPCS—used the AWS auction to expand their reach.
“MetroPCS came in fourth overall in terms of the amount of money it spent—$1.4 billion,” observes Amoroso. “They got spectrum, winning bids on 8 licenses that covered about 145 million people. This seems a lot more national for a regional player.”
Leap had two goals in the auction, says Tim Ostrowski, the company’s vice president, business development. “One was expanding into new clusters. We added a significant number of new markets in this auction. The other was to increase the amount of spectrum that we had in both our new and existing markets so that we had at least 20 MHz or more. That allows us to offer a full range of products to our customers, including both voice and data that is going to be so critical as we go forward in the marketplace.”
Leap offers fixed rate, unlimited (within a region) services to its customers. Many do not have landline phones and/or Internet access. “As we begin to offer low cost, unlimited data services to them, this is going to create their window to the world in terms of the information highway,” Ostrowski continues.
Cable plans still unclear
The third highest bidder in the AWS auction, with an investment of $2.4 billion for 137 licenses, was SpectrumCo. This bidding consortium included Comcast, Cox Communications, Time Warner, Sprint Nextel, and Bright House Networks.
