AT&T ’s proposed acquisition of T - Mobile USA was driven in large part by the quest for radio spectrum , a commodity that rarely crosses the minds of mobile consumers but play a bragging role in carriers ’ decision - making .
Spectrum is the lifeblood of wireless networks , because the wider a band of frequence a net can use , the more pep pill and capacitance it can deliver to users . That makes it a highly sought - after imagination . The penury for spectrum hasfueled battles among TV broadcasters and mobile operators . It has also contributed to many of the big mergers in the peregrine line of work , including the complex relationship between Sprint Nextel and WiMax operator Clearwire , which form a newfangled caller so they could pool spectrum in the same striation .
In the case of AT&T and T - Mobile , both carrier say they face impending spectrum exhaustion without some new arrangement . That risk is actual , especially for T - Mobile , and for AT&T in areas such as California , according to analyst Phil Marshall of Tolaga Research . pool its spectrum with T - Mobile ’s could aid AT&T lick the data crunch that has led to complaints about iPhone performance in some cities , and give T - Mobile a path to LTE , Marshall said .
But more than that , the big pool of spectrum could give the incorporate carrier an advantage against rivals such as Verizon Wireless in introducing loyal services , he enounce .
Consumers might not see the full benefits of AT&T ’s expanded spectrum for two age or more , but buy T - Mobile was the degraded way to get hold of the extra resources , according to John Stankey , president and CEO of AT&T Business Solutions .
“ It lets us get more ghostly capacity in the food market sooner than any other industry choice , ” Stankey aver .
Both AT&T and T - Mobile have accumulated frequencies over the years from various auctions of regional spectrum licence . Their spectrum holdings motley from city to city , but Marshall estimates that AT&T has between 85MHz and 90MHz of total spectrum , on middling , across the country . T - Mobile has between 50MHz and 55MHz , he say . So , assuming it is n’t forced to disinvest some licenses , the combined company would have between 135MHz and 145MHz in an mediocre city .
That would put the new carrier far ahead of both Verizon ( with 85 - 90MHz ) and Sprint ( with 50 - 55MHz ) in an mediocre market , according to Marshall ’s estimate . Only Clearwire , with 120 - 150MHz , might rival the combined company in some areas . And Clearwire lacks the capital to take advantage of that spectrum .
If the acquisition is approved and AT&T take control of T - Mobile , it plans to consolidate the 3 GiB dealings of both carrier into a frequency ring around 1900MHz . This will liberate up their AWS ( Advanced Wireless Services ) oftenness for LTE , Stankey say . fuse the AWS spectrum with some of T - Mobile ’s absolute frequency will create a band 20MHz all-encompassing that can be used to bring LTE to many rural and suburban areas , he said .
Meanwhile , AT&T ’s spectrum in the 700MHz reach , which is prized for long reach and good in - building insight , exists primarily in cities and will be used for LTE there , the company say . AT&T also continues to pursue an attainment of a band in the 700MHz compass that Qualcomm has used for its FLO TV service .
The scarceness of spectrum is in some ways a question of timing , according to Stankey and others in the industry . Though carriers may have enough spectrum to progress out their networks over the next few years , there is a need for pressing action to make more frequencies available because it can take 10 years or more to translate spectrum into service , said Charla Rath , vice prexy of insurance policy growth at Verizon Wireless , who speak on a jury before the CTIA trade show on Monday .
For spectrum - full-bodied Clearwire , the T - Mobile - AT&T lot is bad word in the short term because it momentarily satisfies the demand for spectrum at two carriers who were in need of it , Marshall said . But the market for spectrum in the average and long term is still strong , he said .
AT&T see a indigence for more frequencies in the future to conform to explosive ontogeny in requirement for nomadic information over the descend years . The carrier ’s mobile data point volume has get 8,000 percent in the retiring four years , and the 2010 requirement is expected to grow by eight to 10 times by 2015 , according to AT&T Chairman and CEO Randall Stephenson .
“ There ’s just going to be a constant need for additional spectrum , ” Stephenson say .
