Verizon executives on Friday said that a valuable chunk of newly purchased analog TV spectrum is a "transformative opportunity" that will let the company offer vastly faster wireless broadband service within the next three years.
In a conference call with investors on Friday morning, Verizon Communications CEO Ivan Seidenberg and Verizon Wireless CEO Lowell McAdam opened up about their plans for 700Mhz spectrum obtained through a recently concluded Federal Communications Commission auction. Early word of the plans began trickling out Thursday night after a gag rule of sorts lifted.
"With the 700MHz C block, we're in a premier position to provide the fastest (network) and most complete footprint across the country," McAdam said.
In short, the company views the C block, a nationwide chunk of licenses subject to so-called "open access" rules, as a way to "supercharge" its strategy for rolling out a fourth-generation (4G) network using long-term evolution (LTE) technology. Verizon opted last November to go with that new wireless standard backed by GSM industry players, which will allow its customers to use the same mobile devices and applications globally.
The timeline for 4G roll-out at this point looks like this: Verizon Wireless has already begun LTE field trials and network testing with partners Vodafone and China Mobile this year and will work on finalizing standards. The company plans to select vendors, develop dual-mode devices, and begin network deployment in the second half of 2009, and to launch the network commercially in late 2010. National coverage is expected by 2011, a Verizon Wireless spokeswoman said after the call.
Acquisition of the nationwide C block and other 700Mhz spectrum licenses will also allow the company to fill in previously "thin spots" of coverage across the country, McAdam said. That's significant because doing so will provide the depth necessary to offer higher-bandwidth broadband services with download speeds as high as 75Mbps--a far cry from the 2-3Mbps maximum offered now--he added.
Verizon Wireless, along with AT&T, was one of the top spenders in the auction for airwaves that are capable of propagating longer distances and penetrating walls and other obstacles more easily. AT&T has also said it plans to use its network to deploy an LTE-based network.
In addition to the C block, Verizon snapped up licenses covering several key metropolitan areas, including Los Angeles, Chicago, Philadelphia, Washington D.C. and Baltimore, Miami, Atlanta, Dallas, and Houston.
All told, the company spent about $9.3 billion, which was "what it expected to spend" on the spectrum, McAdam said.
"Going forward, there is really no urgency for us to do any spectrum purchases," the Verizon Wireless chief said. "We see a great opportunity to meet customers' needs as they change."