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LA, Houston Hot in Auction 58

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Replying to:  Verizon And Cigular Sleeping? by Zaniphan   Jan 27, 2005, 4:23 PM

Re: Verizon And Cigular Sleeping?

by Rich Brome (Moderator)    Jan 27, 2005, 6:29 PM

Don't confuse coverage with spectrum. Yes, you need spectrum to provide coverage, but you also need towers, which is whole different issue. And if a company doesn't have enough spectrum in a given area, that's a capacity issue, not coverage.

Anyway, thanks to their acquisition of AT&T Wireless, Cingular has a glut of spectrum in most areas. There are a few areas where they could use more, and where those line up with the areas being auctioned, Cingular is bidding. But buying more spectrum in areas where there already have a lot would be a waste of money.

Plus, Cingular has so much in some areas that the government simply won't let them have any more. Cingular was required by the FCC to sell off excess spectrum in some areas when they merged with AT&T Wireless.

As for Verizon, they've already spent billions in recent years acquiring spectrum (by itself or by buying companies) in the areas where they most needed it. There are only a handful of areas left where Verizon still has a serious need for more. And where those areas match up with what's being auctioned, Verizon is certainly going for it.

Then there's the issue of who needs it more... There are a lot of places where Verizon could use more spectrum, but the need isn't dire. But T-Mobile needs more spectrum desparately. They can't launch 3G without it. So it stands to reason that they're willing to pay more.

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