After spending $10.4 billion in the latest spectrum auction — a sum that was only good enough for third place — Verizon Wireless is cooling off on the idea that it needs to make monumental spectrum purchases to keep its cellular network humming along. "Entering the auction, there were no markets where we felt compelled to acquire spectrum," said Verizon's Tony Melone during a conference call with shareholders. AT&T, the second-largest US carrier behind Verizon, spent $18.2 billion in the AWS-3 auction.
Verizon didn't invest as heavily in the record-breaking auction, but Melone suggested the company is very pleased with its standing after picking up 181 new spectrum licenses, and now holds enough spectrum to comfortably "meet the anticipated growth needs of the business in the near term." If the spectrum crunch remains a concern (and all four major US carriers would likely tell you that it does), it doesn't seem to be a pressing one anymore — at least for Verizon. Your current provider will be able to endure another generation or two of new iPhones and Samsung Galaxy devices.
Verizon seems proud it didn't spend as much as AT&T
"We have significantly improved our AWS spectrum position, now having 40 megahertz or more in 92 of the top 100 markets," said Melone. Verizon focused its auction strategy on cities including Los Angeles, San Diego, Baltimore, and San Francisco. In doing so, the company chose to sit out bidding on licenses in markets where it already has a reputation for providing reliable service — namely New York City. Verizon isn't bowing out of future auctions; the carrier obviously plans to keep its options open. But it's patting itself on the back for showing discipline at auction, and pushing things like XLTE, small cell deployments and carrier aggregation — a benefit of LTE Advanced — as ways of adding capacity where needed. In other words, it's got a clear roadmap for carrying growth forward that won't require throwing billions at the FCC. A big part of that involves refarming Verizon's 3G CDMA network as customers stop relying on it and directing those resources towards LTE.
Melone and CFO Fran Shammo said the company will continue to look at second-hand spectrum purchases or leasing deals (possibly from Dish and / or Sprint) in the months ahead. But for right now, Verizon seems very confident about its position and using what it's already got. "Our future plans do not require us to acquire large blocks of spectrum in the near term," said Shammo.