LTE to cover much of 700 MHz band, but deployments still on horizon: Qualcomm to use auction winnings for MediaFLO

The nation’s top two carriers plan to deploy Long Term Evolution network technology over their recent spectrum winnings. However, Verizon Wireless executives said an LTE rollout won’t happen until 2010 at the earliest, while those from AT&T Mobility pegged a rollout date as far back as 2013.
Nonetheless, the news sets the stage for 4G network interoperability between what are today the nation’s two largest carriers. Indeed, CDMA carrier Verizon Wireless and GSM operator AT&T Mobility – longtime rivals that currently operate different network technologies – may well sign LTE roaming agreements in the coming years.
Now, though, with the challenge laid, the race is on for the industry’s equipment suppliers to jump into the 700 MHz breech with their LTE kit.
Although no vendor currently offers LTE equipment for the 700 MHz band, “pretty much everyone will be ready” by the time rollouts begin, said Current Analysis analyst Peter Jarich.
Jarich said that, although the LTE standard is not quite finished, much of the work on the radio-access portion of the equation has been finished, which means that equipment suppliers can soon begin building the necessary LTE hardware. Jarich said the core network portion of the LTE standard is still being worked on, but that a portion of the standard relies more on software than hardware, which means suppliers will need less time to deliver it.
Verizon Wireless and AT&T Mobility announced their respective LTE plans just hours after the Federal Communications Commission’s anti-collusion gag rule lifted yesterday. Verizon Wireless was the biggest winner in the FCC’s 700 MHz spectrum auction, which ended last month, doling out around $9.4 billion for C-, B- and A-Block licenses. AT&T Mobility was the second-largest winner, scooping up B-Block licenses worth a total of $6.6 billion. Together, the carriers scored around $16 billion of the total $20 billion spent on 700 MHz licenses.
Verizon’s plans
Verizon Wireless, which announced last year it plans to break from the CDMA evolution path and embrace LTE as its 4G network standard, said this morning it will deploy LTE technology across its 700 MHz winnings. The carrier said that its new 700 MHz licenses increase its nationwide spectrum holdings from an average of 51 MHz to 82 MHz.
“We now have sufficient spectrum to continue growing our business and data revenues well into – and possibly through – the next decade, and this is the very best spectrum with excellent propagation and in-building characteristics,” said Lowell McAdam, Verizon Wireless’ president and CEO. “We also believe that the combination of the national, contiguous, same-frequency C-Block footprint and our transition to LTE will make Verizon the preferred partner for developers of a new wave of consumer electronics and applications using this next generation technology.”
Verizon Wireless executives said LTE technology will support the nation’s growing desire for high-speed data services, and predicted that data will account for as much as 50% of carriers’ revenues in the future. Executives said such growth will come from machine-to-machine communications, navigation systems and other advanced services.
AT&T’s plans
As for AT&T Mobility, the carrier said it will deploy LTE technology across its winnings from the recent 700 MHz auction, 2006’s advanced wireless services (AWS) auction, and the 700 MHz spectrum the carrier acquired last year from Aloha Partners.
“AT&T will use the 700 MHz spectrum, as well as the AWS spectrum we acquired in the 2006 auction, for our 4G, LTE transition,” said John Donovan, AT&T’s CTO. “AT&T has broad coverage in these spectrum bands across 95% of the population. We have a contiguous band of 20 megahertz of spectrum for 4G, LTE transition across 82% of the population in the top 100 markets.”
Open-access questions
Interestingly, AT&T Mobility sought to cast doubt on its rival’s spectrum strategy. Verizon Wireless’ LTE network will be deployed primarily in the carrier’s C-Block winnings, which carry the FCC’s open-access mandate. The mandate requires Verizon Wireless to open its network to all compatible applications and devices. The mandate dovetails with Verizon Wireless’ so-called Open Development Initiative, which the carrier unveiled late last year.
AT&T Mobility’s winnings from the recent 700 MHz spectrum auction are located solely in the B Block, which do not carry the open-access provisions.
“The results of the auction bidding demonstrate that the B Block was the most attractive the most valuable spectrum available, and it was the best investment for AT&T and its customers,” said Ralph de la Vega, president and CEO of AT&T’s wireless unit. “The lower 700 MHz spectrum that AT&T acquired from Aloha Partners is not subject to the same strict regulations imposed on the upper C-Block spectrum the FCC recently auctioned. With fewer costly and complex regulations we have the certainty and flexibility needed to move faster in rolling out new mobile technology and more customer choices in devices and applications.”
Verizon Wireless’ McAdam seemed to disagree, though, arguing that the C Block was less expensive and that the open-access provisions would spur innovations.
“We got very good economics on a per megahertz/pop basis,” said McAdam. “We felt that the nationwide C Band was a real significant acquisition for us because we think it will be the first place that developers will go on a going forward basis.”
Not surprisingly, Google Inc. sought to take credit for the open-access provision.
“As you probably know by now, Google didn’t pick up any spectrum licenses in the auction,” wrote Posted by Richard Whitt, Google’s Washington telecom and media counsel, and Joseph Faber, Google’s corporate counsel, wrote on the company’s Web site. “Nonetheless, partly as a result of our bidding, consumers soon should have new freedom to get the most out of their mobile phones and other wireless devices.”
The average price per megahertz/potential customer covered for the entire C Block was $0.76. The B Block’s average price per MHz/pop was $2.68, according to Optimal Markets Inc. According to Verizon Wireless, the carrier paid $1.03 per MHz/pop, compared with the auction average of $1.20.
And, despite de la Vega’s claims that AT&T Mobility will be able to “move faster” than its rivals, the carrier’s rollout date is fully three years behind that of Verizon Wireless’.
Sprint Nextel’s WiMAX
Interestingly, both Verizon Wireless and AT&T Mobility will lag behind Sprint Nextel Corp.’s WiMAX deployment, which the carrier is in the midst of. Sprint Nextel has said it will have a two-year jump on its competitors in 4G.
When questioned about Sprint Nextel’s WiMAX plans, AT&T Mobility executives said they were not concerned about the situation.
Qualcomm’s plans
Verizon Wireless and AT&T Mobility were the No. 1 and No. 2 winners, respectively, in the FCC’s 700 MHz auction. The auction’s No. 4 largest winner, Qualcomm, said it will deploy its MediaFLO mobile TV technology across its E-Block winnings. Qualcomm said its 700 MHz licenses, combined with its existing holdings, will cover more than 68 million people in 28 individual markets with MediaFLO.
As for Qualcomm’s B-Block licenses, which cover California-Imperial, New Jersey-Hunterdon and Yuba City, Calif., the company said it will use those holdings for research and development.
Qualcomm spent $558 million on a handful of E- and B-Block licenses.
The auction’s third-largest bidder, EchoStar Communications Inc., said it does not intend to discuss its 700 MHz plans.
In related auction news, Cyren Call Communications Corp. said it never demanded long-term payments as a condition for a winning bidder of the 700 MHz national commercial/public-safety license, breaking its silence in response to news reports and blog postings that strongly suggested it caused the demise of one-time D-Block aspirant Frontline Wireless L.L.C.