Verizon "Very Confident" in Spectrum Position

Most informed observers outside of Verizon believe it will have to boost its spectrum assets. But Verizon continues to insist it is “very confident” with its present and potential spectrum assets, according to Matt Ellis, Verizon CFO. “We have significant opportunities to continue to grow within the spectrum holdings that we currently have; we’re refarming spectrum as we've talked about for a while; we still have the AWS-3 spectrum; and then unlicensed,” said Ellis.

It is not an unrealistic position. Even if, historically, gaining new spectrum has been the main way mobile operators have added new capacity, using smaller cells is the other typical way additional gains have been achieved. With the fiber deep architectures Verizon is pioneering in Boston, it is creating the backhaul infrastructure to do just that: add small cells to reuse existing capacity.

So, in terms of the physical options, Verizon does not absolutely need more spectrum to add more capacity. On the other hand, there is no advantage to Verizon to claim otherwise, even if it believes it might, or will, add more spectrum in the future.

Verizon maintains bargaining advantage over potential sellers if it continues to insist it does not need to buy additional spectrum assets from would-be sellers, especially to support 4G operations.

Keep in mind that the usable capacity the smaller providers (T-Mobile US and Sprint) can wring out of any amount of raw spectrum is greater than can be deployed (all other things being equal) by AT&T and Verizon, which have many more customers to support.

source: Allnet Insights
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