Verizon’s New Spectrum Could Create Device Options for Other Carriers

Now that Verizon Wireless has been approved to purchase AWS spectrum from several of the nation’s largest cable companies, the company will need some new handsets. And that could create some opportunities for other carriers.

To date, Verizon has deployed LTE in Band 13 of the broader 700 MHz band – and the carrier essentially has Band 13 all to itself. As Verizon begins to roll out LTE in the AWS band, it will want devices that operate in both Band 13 and the AWS band so that customers can move seamlessly from one underlying network to another.

According to Iain Gillott, president of wireless research firm iGR Research, obtaining such a device should be a cinch for Verizon – not requiring much time or much money. Because Verizon is such a dominant force in the market, manufacturers typically are quite happy to build whatever the carrier wants, he said.

Another consideration is that “the bands are far enough apart not to interfere with each other and cause problems with the antenna,” Gillott said.

Francis Sideco, senior principal analyst for consumer communications for research firm IHS/iSuppli, had a bit different take. He thinks adding AWS to the spectrum bands that Verizon’s current LTE devices support will add about a dollar or two to the cost of each device, but he said Verizon may not pass the cost on to consumers.

“If they started today, they could get a product out in 12 to 24 months,” added Sideco. He noted, however, that the company may have begun discussions with device manufacturers in advance of gaining FCC approval for the AWS spectrum deal, in which case the lead time might be shorter.

One thing Gillott and Sideco agreed on, however, was that once manufacturers have created the device for Verizon, those manufacturers ares likely to make it available to other carriers. The question then is whether smaller operators could gain anything from such a device. Smaller operators have become increasingly concerned about the difficulties they are having in obtaining the latest model wireless devices at affordable prices. Could this help?

Gillott and Sideco agreed that Verizon’s entry into the AWS market could help create a wider device selection and better pricing for other operators with AWS spectrum. Gillott noted, for example, that currently the iPhone doesn’t support AWS bands. But Verizon undoubtedly will be pursuing such a device.

Gillott added, however, that the companies that have the most to gain are those with AWS spectrum who also used CDMA for their earlier generation networks because the handset will need to be able to fall back on those earlier networks where 4G is not available – and CDMA is the technology that Verizon used for its earlier generation networks.

Roaming issues
Potentially Verizon’s new devices also could also pave the way for companies with AWS spectrum to roam onto either one of Verizon’s LTE networks.

Traditionally Verizon has been one of the biggest opponents of data roaming requirements imposed by the FCC and has challenged those requirements in court. But one of the conditions of the FCC’s approval of Verizon’s AWS spectrum purchase was that the carrier would offer roaming agreements to other carriers for mobile data service on “any of its spectrum” in the areas where it is acquiring AWS-1 spectrum – and that requirement continues even in the event that “the current data roaming rule is not available to requesting providers.”

The way I’m reading that, an AWS carrier operating in an area where Verizon is acquiring spectrum could roam onto Verizon’s AWS or Band 13 network – providing of course, that the carrier offers devices that can operate in either band.

It also occurs to me that if Verizon is going to have to redesign its handsets to accommodate its new AWS networks, we could see smaller carriers step up their efforts to obtain a higher level of device interoperability. As Verizon makes plans for devices that operate in Band 13 and the AWS band, both Gillott and Sideco said it wouldn’t be difficult for the carrier to also add the ability to operate in the 700 MHz A and B-bands as well. Those are bands where many smaller carriers hold spectrum and where difficulties in obtaining current devices at competitive prices seem to be most acute.

Sideco doesn’t believe Verizon is likely to expand its device capability so broadly unless the company sees a “compelling business case.”

But here, too, Gillott had a bit different take.

“It would be very beneficial to AT&T or Verizon to do that willingly,” said Gillott with regard to adding A- and B-band capability. “The FCC would look at it very positively and that would help with future acquisitions and deals.”