NEW YORK-The credit quality of the seven large incumbent U.S. operators will only be moderately affected by the capital costs of commercializing third-generation technology, according to Moody’s Investors Service.
“We expect that in the U.S., 3G will largely be rolled out as an overlay on existing spectrum, involving only elective fill-in spectrum acquisition costs and modest capital expenditures,” said John Page, analyst with Moody’s and author of the report.
The report also states that the seven largest operators, which account for 90 percent of total wireless market revenues, will finance their 3G upgrades through internally generated cash flow and funding from their corporate parents.
In regard to the upcoming 700 MHz license auctions, Moody’s predicts most incumbent U.S. operators will participate, but sees little reason for them to bid too aggressively to satisfy their 3G plans since they already own extensive spectrum in the frequency bands slated for global 3G.
