Mobile Business Strategy Now Driven Significantly by Spectrum Issues

By Gary Kim October 05, 2012

Business strategies in the U.S. communications and entertainment have recently been shaped profoundly by spectrum issues.

Dish Network once hoped to turn Blockbuster and some new re-purposed satellite spectrum into a mobile video service. The plan, in April 2011, was to retain some of the Blockbuster retail locations to sell mobile devices supporting the new proposed service.

Those plans floundered when the Federal Communications Commission didn’t quickly approve a waiver allowing Dish to use its satellite spectrum for terrestrial data and voice transmission.

Image via Shutterstock

LightSquared has been unable to launch its proposed wholesale Long Term Evolution network, and might declare bankruptcy, because it has not been able to convince regulators of the merits of its plan to re-purpose satellite spectrum for use as an LTE network.

And though it is not the sole reason, desire to acquire spectrum assets is driving merger and acquisition efforts in the U.S. mobile business.

Even the fixed network business now is starting to be shaped by wireless access, as most fixed broadband connections now terminate using Wi-Fi, and support devices capable of using Wi-Fi networks. And the amount of such usage is important.

About 68 percent of consumer mobile phone use, for example, now occurs in the home, a study sponsored by AOL and BBDO has found. That, as much as anything, shows the growing importance of “untethered” access for mobile devices.

The study, conducted by research firm InsightsNow, shows that a focus on “mobile” devices actually requires understanding the role of untethered access, which in fact might already represent as much as half of all mobile operations on a smartphone.

“Me Time,” activities that involve “seeking relaxation and entertainment in order to indulge oneself or pass the time” accounted for about 46 percent of all smartphone app and website activities, averaging 864 minutes per month per user. About 70 percent of those activities are “lean-back” experiences.

The need for more spectrum is driving strategy elsewhere as well.

AT&T wanted to buy T-Mobile USA in large part for its spectrum assets. Sprint's board considered, then rejected, an early 2012 bid to buy MetroPCS.

T-Mobile USA now wants to buy MetroPCS in part for its spectrum assets.

Verizon has gotten approval to buy mobile frequencies from Comcast, Time Warner Cable, Cox Communications and Bright House Networks.

AT&T is waiting for clearance of its purchase of more spectrum from NextWave.

The FCC now is trying to entice U.S. broadcasters to part with abandoned TV broadcast spectrum so it can be auctioned off to support U.S. Long Term Evolution networks.

And a rollout of "white spaces" spectrum might start in 2013 as commercial radios become available as well.

Edited by Brooke Neuman

Contributing Editor

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