Now that the FCC (News - Alert) has concluded its Advanced Wireless Services (AWS) spectrum auction (see www.tmcnet.com/371.1), what will those new license holders do with those invaluable frequencies? In the short-term, analysts believe not much. . . but in the long-term, the auction may lead to some pretty strange bedfellows.
While the top winner T-Mobile (News - Alert) bid
nearly twice as much as its closest competitors,
it did garner the critical mass
necessary to ensure the successful rollout
of its future network roadmap. To
that end, T-Mobile will likely roll out
Next-Generation Network (NGN) services
that enable customers to operate in
dual-mode, seamlessly handing over signals
between cellular and fixed networks
such as WiFi (News - Alert). The division of
Deutsche Telekom won over 30 MHz
in the New York metropolitan region
and 20 MHz in California — two markets
that were critical to clearing up its
spectrum bottleneck.
“They have no 3G network. It’s been
a big disadvantage for T-Mobile because
they haven’t been able to offer businesses
3G data services apart from WiFi,”
explained Phil Solis, senior analyst, ABI
Research.
T-Mobile was one of the first operators
to harness the power of WiFi.
Since the service launch in 2002, TMobile
HotSpot has become a crucial
part of the company’s wireless broadband
strategy. But the spotty nature of
WiFi service as well as intense competition
from the likes of Wayport and
AT&T has lessened its impact. At the
same time, competing mobile operators
have been deploying advanced cellular
technologies like EV-DO and
HSDPA — a move that T-Mobile was
reluctant to make without the adequate
spectrum space to ensure
smooth service.
“They will almost certainly use this
for HSDPA,” Solis told TMCnet.
Enabling the dual-mode handover is
technology developed by Kineto
Wireless known as Unlicensed Mobile
Access (UMA), which is now an accepted
part of the 3GPP’s industry standards.
Along with T-Mobile, UMA will
also serve as the basis for new service
offerings from Orange, Telecom Italia (News - Alert)
and, most recently, TeliaSonera of
Norway (see www.tmcnet.com/372.1),
according to Steve Shaw, Kineto’s marketing
director.
However, it remains unclear if TMobile’s
deployment plans will be solely
based on dual-mode handsets or if they
also call for the use of a new technology
known as Femtocells. For example,
ip.access of the U.K. has demonstrated
that operators don’t need dual-mode
handsets and instead can rely on
Femtocell-enabled residential access
points (APs) to enable fixed/mobile
convergence. Femtocell technology,
much like its larger micro- and pico-cell
sister technologies, enables more comprehensive
coverage at the far edge of
the network.
ip.access, which recently partnered
with picoChip (see www.tmcnet.com/373.1), has an OEM relationship with
Siemens (News - Alert) and customer relationships
with several carriers including T-Mobile,
according to Rupert Baines, PicoChip
spokesman. While the APs are more
expensive than Wi-Fi APs, they are still
cheaper than the new UMA-enabled
handsets.
“They are the market leader for GSM
small cells deploying in high volume for
T-Mobile,” Baines told Internet
Telephony magazine.
According to ABI Research (News - Alert), shipments
of dual-mode wireless handsets
will exceed 300 million worldwide by
2011. Principal analyst Stuart Carlaw
believes 102 million Femtocell-enabled
units will be deployed into networks by
that time.
Conversely, the next two highest bidders
are expected to simply sit tight on
their newly acquired spectrum. Verizon (News - Alert)
Wireless probably bid on spectrum that
was only of key strategic value, paying
the second-highest dollar amount for
only 13 licenses. And Comcast (News - Alert), Time
Warner Cable, Cox Communications,
and Bright House Networks — collectively
operating as SpectrumCo LLC
— also won a considerable amount of
spectrum (137 licenses), but analysts
believe the cable multi-system operators
(MSOs) can piggyback on their
wireless partner Sprint (News - Alert) Nextel for some
time to come.
“Based on our conversation with
wireless executives, we do not believe
that the new spectrum owned by the
cable consortium will be built out any
time soon,” wrote Doug Mitchelson,
an analyst at Deutsche Bank.
Last November, the MSOs already
partnered with Sprint (see www.tmcnet.com/374.1), which is also a minor
shareholder in the SpectrumCo consortium.
In addition, Sprint is the
only U.S. carrier so far to announce
its 4G wireless broadband strategy
(see www.tmcnet.com/375.1), choosing
to deploy WiMAX in its 2.5 GHz
spectrum back in August. That makes
it logical for the cable consortium to
embrace WiMAX and create a seamless
roaming partner. But that would also
require some lobbying to get equipment
vendors on board to create an
ecosystem to support them.
“It’s possible they would roll out
WiMAX on that. Most of the chipsets
that are out right now don’t support
those frequencies but they could,”
Solis said.
The AWS spectrum is located in the
1710-1755 MHz and 2110-2155 MHz
bands.
“The cable sector has given themselves
breathing room by pursuing a
joint venture with Sprint to offer wireless
service,” Mitchelson said.
The DB analyst believes the muchpublicized
joint venture gives the cable
operators: 1) a reasonable wireless service
offering; 2) the ability to gain experience
marketing and servicing a quadruple-
play of services for customers (voice,
data, TV and wireless); and 3) the ability
to test and launch cross-product services,
allowing the technology learning
curve to begin.
But ABI’s Solis said it is too early to
write off the direct broadcast satellite
(DBS) providers. DirecTV (News - Alert) and
EchoStar Communications — operating
collectively as Wireless DBS — initially
went into the auction with high hopes,
but subsequently withdrew bids once
prices skyrocketed. At a recent
investors’ conference, DirecTV CFO
Mike Palkovic said the FCC auction
had played out much to the way management
had anticipated. They went
into it looking for an opportunity, but
weren’t surprised by the outcome.
Palkovic said the company remains
bullish on the wireless broadband
market, but declined to offer any
details on a broadband plan.
Solis believes that opens the door for
DBS companies to partner up with
Clearwire, which will operate the nation’s
second-largest WiMAX network after
Sprint (see www.tmcnet.com/376.1)
thanks largely to Intel (News - Alert)’s backing.
“I think the way they are going to
play out is the DBS guys are going to
be more closely aligned with
Clearwire,” he said.
As of press time, company officials
from all the respective auction bidders
declined to comment for this story, citing
the ongoing FCC-mandated quiet
period. Winning bidders had until
October 4, to come up with their down
payments. Final payments were due
October 19. IT
Robert Liu is Executive Editor at TMCnet.
Previously, he was Executive Editor at
Jupitermedia and has also written for CNN,
A&E, Dow Jones and Bloomberg. For more
articles, please visit Robert Liu’s columnist
page at http://www.tmcnet.com/tmcnet/columnists/.
If you are interested in purchasing reprints of this article (in either print or PDF format), please visit Reprint Management Services online at www.reprintbuyer.com or contact a representative via e-mail at [email protected] or by phone at 800-290-5460.
|