The spectrum war's winners and losers
As airwaves become scarce, the spectrum crunch is turning a field of "haves" and "have-nots" into a sharply divided set of winners and losers.
Those carriers with the biggest batches of high-quality spectrum have more bandwidth to satisfy customers' growing demands for mobile phone calls, texts and Internet usage. That means fewer dropped calls and faster download speeds. Those that don't? Picture a repeat of what happened to AT&T shortly after the iPhone 3G debuted. The data overload crippled the network, leading to spotty reception and slow speeds in some regions. "Wireless operators have to decide whether they spend money acquiring new spectrum or building tens of thousands of new cell sites all over the country," says Dan Hays, a partner at PricewaterhouseCoopers' consultancy. "That's the big dilemma." Both of those options cost billions. There's a third choice: consolidate. By merging, carriers can gain access to both spectrum and more cell sites. That can also cost billions, but it's a turn-key solution. The problem is that regulators hate it.
There are only two commercial holders left of big spectrum chunks: The Dish Network and LightSquared. But LightSquared’s spectrum is only licensed for satellite services, not the terrestrial transmissions needed to carry wireless phone signals. LightSquared is currently caught in -- and losing -- a high-stakes regulatory fight over the issue. That leaves Dish. The company has considered building its own wireless network, perhaps by snapping up Sprint or Clearwire, but the costs of doing that are scary. Some analysts think Dish will take the plunge, while others predict that it will go the safe route and sell off its holdings. Either way, it's got vultures circling.
The spectrum war's winners and losers