Interference concerns surrounding lower 700 MHz spectrum licenses does not appear to be derailing U.S. Cellular, which according to a report picked up a handful of A-Block licenses from a fellow regional telecom operator.
According to a report released today by Wells Fargo Securities, U.S. Cellular picked up several A-Block licenses from CenturyLink, as noted in a Federal Communications Commission filing from June 22. Wells Fargo Securities noted the licenses cover Green Bay and La Crosse, Wisc.; Springfield and Columbia, Mo; Peoria, Ill.; Lincoln, Neb.; and Pendleton, Ore.
U.S. Cellular has already tapped into its A-Block spectrum holdings to support the initial rollout of LTE services across some of its markets. U.S. Cellular, through a partnership with King Street Wireless, picked up more than 150 licenses in the A- and B-Block during the FCC’s 700 MHz auction in 2008.
Those licenses include 12 megahertz of spectrum, though there has been concern that the A-Block licenses could have interference issues in some markets with adjacent television broadcasters.
“These complement [U.S. Cellular’s] current coverage footprint,” explained senior analyst Jennifer Fritzsche, in a research note. “While there is likely some channel 51 interference in some of these areas, we note that [U.S. Cellular] has successfully cleared some A-Block markets in the past.”
Verizon Wireless, which picked up 25 licenses in the A-Block during the auction, has said it would be willing to auction off its A- and B-Block spectrum holdings if government regulators approve its pending acquisition attempt of 1.7/2.1 GHz spectrum licenses from a handful of cable television operators and Leap Wireless. Verizon Wireless is currently relying on its C-Block, 700 MHz spectrum licenses to support its LTE network.
Analysts have noted that if Verizon Wireless garners approval for its 1.7/2.1 GHz license deals and does auction off its A- and B-Block holdings, U.S. Cellular could be a potential buyer of at least those licenses covering markets where it offers service.
CenturyLink, which has had an on-again, off-again relationship with wireless, has most recently been selling services as a mobile virtual network operator using Verizon Wireless’ network. The telecom operator, which previously operated under the CenturyTel brand, spent $149 million on 69 A- and B-Block licenses during the 700 MHz auction.
Wells Fargo Securities’ Fritzsche added that its possible CenturyLink could be looking to unload its remaining spectrum holdings.
“We do not believe the company sees a near term need to own a wireless asset,” Fritzsche wrote. “As a result, we would expect to see further news flow related to the monetization of its remaining spectrum assets.”
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