What is Spectrum Why is It a Big Deal for Cell Phone Companies?

Spectrum Best Opportunities for Wireless Companies

The most recent government action regarding radio airwaves would be affecting the prospect of the wireless industry and services. We need to be aware on the updates. Recently was the start of the Federal Communication Commissions’ Incentive Auction that had taken valuable spectrum away from TV broadcasters to sell it to companies who would offer wireless service.

This specific band of spectrum is said to be priced extremely and industry insiders have named it `beachfront property’, since it tends to operate at lower frequency. This means that it has the potential of running across greater distances going through walls for greater coverage. This is the reason why this auction needs the attention of the viewer. It represents one of the best opportunities for wireless companies in getting more spectrums which is how things get conveyed to the phone from videos to work emails.

 Moreover it could also remodel the wireless industry, providing smaller carriers with an opportunity of offering the similar, robust nationwide coverage which Verizon Wireless and AT&T tend to provide. Overall, they seem to control over 70% of the wireless market of US. Further than the two big, T-Mobile, satellite TV provider Dish Network and cable giant Comcast are other large players who intend joining in the auction.

Spectrum – Range of Radio Frequencies

Spectrum is said to be the range of radio frequencies which are utilised in transmitting sound, data as well as video to TVs or smartphones. These are the airwaves which had ignited Beatlemania in December 1963 when radio stations had started playing `I Want to Hold your Hand’.

Presently it tends to deliver `Games of Thrones’ to your phone through the HBO Co app. Extra spectrum would mean quicker and more-reliable wireless service. Spectrum is said to be a restricted resource which is controlled for the greater part by the US government. Companies could have it if they are inclined in participating in auctions, acquire a company with spectrum holding or purchase licenses from one another in a secondary market.

To manage the ever-increasing volume of data traffic that is created over phones, tablets, cars together with the other gadget as well as machines, additional spectrum is essential. The 600 MHz band, the spectrum which has taken hold in the auction, has traditionally been utilised in transmitting TV signals and is probably the last time the government would be capable of auctioning off such spectrum.

Lack Significant Volume of Low-Bank Spectrum

Low-band spectrum tends to function consistently indoor and over great distances and could be helpful to carriers in keeping up with the increasing demands for coverage on the part of the customer.

The two big winners in the last auction of low-band spectrum in 2008- AT&T and Verizon have erected the foundation of their 4G LTE networks on low-band 700 MHz spectrum which was another sliver of spectrum that had once been utilised in broadcasting TV. The third largest wireless provider of the nation, T-Mobile has been making attempts in assembling an identical set as assets for its own network though for the most part, T-Mobile is said to lack significant volume of low-band spectrum.

Incentive Auction is actually two auctions in one and there is a reverse auction which would permit TV broadcaster in selling their airwaves back to the government. A forward auction would be following in the next few months by which the government would be selling these same airwaves to wireless companies. Broadcasters would be getting a cut of the proceeds in exchange for giving up their spectrum.

Largest & Complex Auction

This auction is said to be the largest and the most complex auction ever run by the FCC. Dish Network, the Satellite TV provider is anticipated to bid in the modern FCC spectrum auction though it is not certain if the company would be as aggressive as it had been in the AWS-3 auction, last year when it had paid $10 billion.

Estimates had recommended that the auction could generate around $60 billion though several in the industry were of the opinion that the price is not accurate considering the constrained budgets of the carriers. Eight years back, the 700MHz had raised $19.6 billion and last year AWS-3 auction had collected in a record setting of $45 billion. AT&T, Verizon and T-Mobile would probably purchase the bulk of available spectrum in this auction since the FCC is aware how critical low-bank spectrum is in forming a company which could oppose AT&T and Verizon.

 The agency has fixed out a sliver particularly for smaller players such as T-Mobile together with some rural operators in bidding on without facing the deep pockets of AT&T together with Verizon. Dish is said to be another wild card in this auction that had been steadily progressing up a conflict chest of spectrum. It is not certain what Dish intends to do with the spectrum which is own already and the licenses it would probably pick in this auction.

T-Mobile Tougher Substitute to AT&T

There is a possibility that the company would be looking for a partner or would be developing a fixed wireless service which would serve as a substitute broadband connection to DSL or cable. Comcast also tends to bid in the auction as long as a competitor in the auction to T-Mobile for spectrum reserve for smaller operators. The provider has developed an extensive wireless network utilising Wi-Fi technology and would ultimately partner along with a cellular operator in building a network to rival with traditional wireless carrier.

 Comcast has given no indication on how it intends to utilise the spectrum. It could utilise the licenses in building its own network though there is a possibility that Comcast would be using the licenses as a bargaining chip while dealing with traditional carriers. Particularly absent from the auction is Sprint, the fourth ranked carrier. Based on how the auction tends to turn out, T-Mobile would probably end as a big winner.

That means that for the average consumer, T-Mobile can be a tougher substitute to AT&T and Verizon. Usually, T-Mobile tends to have frail signals beyond major cities though the spectrum from this auction would be helpful in covering additionalregions of US particularly those in the suburbs as well as rural regions.