ABI: 700 MHz Spectrum Auction Could Transform U.S. Mobile Landscape

December 29, 2007 // Published as a news service by IHS

The auction will also be critical in the building of a national public safety communications network in the U.S.

"This auction means an opportunity for the licensing of another major national mobile operator, perhaps one from outside the traditional fold," said ABI Research senior analyst Nadine Manjaro.

Yahoo!, Apple and Google have all been mentioned as potential bidders, but it is Google that should be taken most seriously, analysts said. Google has already stated a willingness to invest $5 billion in the "C" block of spectrum, perhaps in partnership with a network operator, in order to facilitate a more competitive wireless market.

What are the implications for incumbents if a company such as Google enters this market? "If Google becomes an operator, it will intensify the incumbents' need to compete," said Manjaro.

"Google has content and money, and could do a lot with that spectrum. They'd be a strong force to be reckoned with in terms of taking subscribers from the incumbents, especially from a company such [as] Sprint, which is already facing challenges in this area."

Analysts said the 700 MHz band is a part of the ultra-high frequency (UHF) band (470-862 MHz) which is being opened in several regions across the globe, including Europe in 2010 and Korea in 2012, as television moves from analog to digital.

The British regulator, Office of Communications (Ofcom), also plans an auction for the UHF frequency, called the Digital Dividend. Regulators are leaning toward spectrum neutrality, which would let the market determine the ideal use of the spectrum, and are also looking to harmonize use of the spectrum.

This band is suitable for fourth generation (4G) technologies, such as worldwide interoperability for microwave access (WiMAX) and mobile broadcast TV using technologies such as digital video broadcast-handheld (DVB-H).

Source: ABI Research.