Sprint sells 900 MHz spectrum to firm led by Nextel co-founders

Pacific DataVision, led by former Nextel Communications co-founders Morgan O'Brien and Brian McAuley, acquired all of Sprint's (NYSE: S) 900 MHz licenses, giving it some 6 MHz of bandwidth nationwide for use in a push-to-talk radio network. The mobile workforce communications provider is also seeking FCC permission to launch a wireless broadband offering using its newly acquired spectrum.

McAuley serves as Pacific DataVision's chairman, while O'Brien is the vice chairman and is in charge of the company's spectrum strategies. Pacific DataVision intends to use an unspecified Motorola Solutions' digital radio technology, though not iDEN as Nextel used, for its PTT network, which should launch in initial markets before the second quarter of 2015. The carrier does not plan to connect to the public switched telephone network (PSTN), sticking instead to a two-way radio offering.

However, Pacific DataVision's plans extend beyond mere two-way radio. O'Brien and others have worked up the draft of a petition asking the FCC for permission to use the 3+3 MHz block of 900 MHz spectrum for wireless broadband services.

"We acquired from Sprint the top 20-25 markets, 60 percent of all the 900 MHz spectrum," O'Brien told MissionCritical Communications. "It's fairly easy to conceptualize that 60 percent of spectrum becomes broadband, and the rest can stay narrowband. That's the proposal, and we've been spending the last couple of months working with industry on something to file."

Though Pacific DataVision will initially target small- to medium-size businesses with its PTT service, it will look to serve critical infrastructure companies in the future with broadband capabilities such as high-speed data and video. "We are thinking more of mission-critical companies in the second phase when we start to look at the spectrum we bought and move that to broadband," O'Brien told MissionCritical Communications.

That could put Pacific DataVision in competition against the government's First Responder Network Authority (FirstNet), which is charged with building an LTE-based nationwide public-safety broadband network in the 700 MHz band. States will have to decide whether to opt in and pay to access the FirstNet network or opt out and either build their own public-safety LTE network by using FirstNet's 700 MHz, Band 14 spectrum and linking to the FirstNet core or simply go without a dedicated public-safety broadband network at 700 MHz.

FirstNet has also toyed with the idea of opening access to its 700 MHz network to other critical infrastructure entities, such as utilities. Those could be the type of mission-critical companies that Pacific DataVision hopes to target with its envisioned broadband service.

Pacific DataVision has not officially selected a broadband technology to use if the FCC allows the company to deploy broadband at 900 MHz, O'Brien told IWCE's Urgent Communications. However, LTE appears a likely bet, given that O'Brien has advocated for the use of LTE over private radio spectrum.

Sprint paid $35 billion for Nextel in 2005 and subsequently acquired Velocita Wireless and its 900 MHz spectrum to enhance the Nextel-branded iDEN network. On June 30, Sprint shuttered the Nextel iDEN network, but it is using the 800 MHz spectrum it acquired from Nextel to roll out LTE.  

Pacific DataVision recently raised more than $218 million in equity funding in a private placement with institutional investors. FBR Capital Markets was the sole initial purchaser and placement agent.

Though the value of the spectrum transaction with Sprint was not disclosed, Pacific DataVision said that as part of the deal, Sprint received $10 million of the spectrum purchase price in the form of Pacific DataVision common stock at the same price per share paid by the institutional investors. In addition, Motorola Solutions agreed to lease a portion of the spectrum from a Pacific DataVision subsidiary.

Back in 2009, Sprint (then Sprint Nextel) launched NextMail Locator, a service that added GPS coordinates, physical street address and an interactive map to NextMail voice messages, which could be sent to any email address. That service was powered by Pacific DataVision.

For more:
- see this Pacific DataVision release
- see this Kansas City Business Journal article
- see this MissionCritical Communications article
- see this IWCE's Urgent Communications article

Related articles:
FirstNet RFI, public notice lay groundwork for network procurement
SouthernLinc: We're committed to iDEN network through 2020
OMA sets its sights on public-safety specs
Sprint loses 2M subs and $1.6B in Nextel shutdown, plans nationwide 2.5 GHz LTE network

Article corrected Sept. 18, 2014, to reflect the fact that Sprint is using 800 MHz spectrum it acquired from Nextel to roll out LTE.

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