YOU ARE AT:CarriersVerizon Wireless, Leap push for spectrum swap

Verizon Wireless, Leap push for spectrum swap

Regional wireless operator Leap Wireless (LEAP) appears to be in the center of several possible spectrum transactions that could help reshape the wireless market.

According to a story from Fierce Wireless, Leap and Verizon Wireless filed an application with the Federal Communications Commission to swap spectrum assets. The deal would see Leap pick up a 700 MHz A-Block license covering the Chicago area in exchange for more than 36 1.7/2.1 GHz and 1.9 GHz spectrum licenses covering parts of 16 states. In total, Leap would be picking up a license covering 11 million potential customers, while Verizon Wireless will pick up licenses covering 18.7 million pops.

Looking to perhaps skirt the current spectrum issues haunting other carrier in front of the FCC, Verizon Wireless and Leap stated that this transaction would not impact current operations of either operator and would allow them to “better rationalize their spectrum holdings to their individual needs and those of their respective customers.” Leap noted that in one market it will transition services to spectrum it plans to retain.

Leap said it would use the 12 megahertz of lower-band 700 MHz spectrum, which is in a different band the upper-band 700 MHz spectrum Verizon Wireless is using for its current LTE network, to supplant the 10 megahertz of spectrum it already controls in that market in support of its LTE network plans. Leap noted earlier this year that Chicago was the only market in which it lacked sufficient spectrum depth in order to launch LTE services.

Leap has said it expects to roll out LTE services across two-thirds of its current footprint over the next three years at a cost of less than $10 per covered pop, or approximately $600 million, and expects to launch its first LTE trial market later this year.

Verizon Wireless said it plans to use the spectrum assets to bolster its mobile network, with the 1.9 GHz spectrum presumably to be used in the short-term to improve capacity and reach of its CDMA2000 1x EV-DO Revision A network, while the 1.7/2.1 GHz spectrum is expected to be used to add density to its LTE rollout. Verizon Wireless had originally picked up 25 A-Block licenses during the FCC’s 700 MHz auction in 2008 in addition to its nearly nationwide haul of C-Block licenses and 77 B-Block licenses. Verizon Wireless continues to hold a 12 megahertz B-Block license covering Chicago.

Verizon Wireless added in the FCC filing that the additional spectrum assets have become a necessity for the carrier to continue supporting increased customer demand for data services. The carrier cited different technologies that can be used as well, including cell splitting, but said that in the end more spectrum is what is needed to support services.

As for the spectrum it was giving up as part of the deal, Leap has said it would focus near-term efforts on boosting coverage in already launched markets as well as focus on its LTE deployment plans. By pawning off unneeded spectrum assets, Leap also gets out from under license build-out requirements that could see the FCC revoke licenses if they are not utilized within a specific time frame.

Leap is also reported to be in the middle of AT&T’s attempts to acquire T-Mobile USA, with published reports indicating the carrier was in talks with AT&T about possibly purchasing some of T-Mobile USA assets in order for the proposed acquisition to gain approval from government regulators. Those assets would presumably include T-Mobile USA’s 1.7/2.1 GHz spectrum holdings that currently support that carrier’s HSPA-based services, but could also get into its 1.9 GHz holdings that support its GSM-based service.

However, Leap’s focus on currently launched markets, as well as what some analysts have noted as insufficient capital, could make such an arrangement difficult. Leap rival MetroPCS has said it would be interested in picking up additional spectrum assets in order to expand capacity and coverage of its LTE service.

At the recent LTE North America event, Leap’s SVP of strategy, Bill Ingram, proffered that wireless operators outside of Verizon Wireless and AT&T Mobility should look into some sort of network sharing arrangement that would allow them to compete more effectively against their larger rivals.

Leap earlier this year also signed an LTE roaming agreement with LightSquared that it said would allow it to offer services outside of its own LTE markets. That deal is contingent on LightSquared gaining FCC approval to use its 1.6 GHz spectrum.

Bored? Why not follow me on Twitter?


Editorial Reports

White Papers


Featured Content