AT&T CFO: Our 40 MHz of unused spectrum will ‘dramatically improve our capacity’

AT&T’s CFO said the carrier has a large chunk of unused spectrum that he said gives the carrier a “unique” position against its rivals. Specifically, AT&T’s John Stephens said the operator owns roughly 140 MHz of spectrum nationwide but is only using around 100 MHz of those holdings.

“There are a couple of things that are unique to us: One is our spectrum position. We have the largest – about 140 MHz, maybe more than that – of low- and medium-band spectrum, which gives us a unique advantage,” Stephens said this week at the Oppenheimer 9th Annual Technology, Internet & Communications Conference.

“If you look deeper into that spectrum, you realize there’s about 40 MHz of that spectrum – AWS-3 and WCS – that we have acquired over the last few years that is very lightly, if at all, used in our network. So all the traffic we’re carrying today is carried by the first 100 MHz,” he explained. “And then if you look at that 100 MHz, some of it’s dedicated to 2G, which will be able to be repurposed next year as we move off the 2G services. And a large part of it is dedicated to 3G, which over time will also be able to be upgraded to 4G LTE or 5G.”

Stephens said AT&T’s spectrum holdings will help the carrier meet users’ increasing data demands: “The data growth has been dramatic,” he said. “People are getting more functionality out of the phones.”

Added Stephens: “So what we have is we have a large block of spectrum that we’re ready to put into service over the next few years that will dramatically improve our capacity, because it will all be LTE, or at some 5G, which is much greater than the average capacity of our spectrum today.”

Interestingly, Stephens also said that building out new spectrum like WCS or AWS-3 is a less expensive way to increase network capacity than densifying a wireless network with additional macro sites and small cells. From a capacity position, he said, “we feel very comfortable.”

“So we have a spectrum plan for the next five years that’s very, very effective and efficient,” Stephen said. “And it gives us a unique advantage.”

Stephens’ comments on AT&T’s spectrum position are notable as Sprint, Verizon and T-Mobile each work to bulk up their own spectrum positions and build out their spectrum holdings. Sprint, for example, is working to build out a wireless network on its 2.5 GHz spectrum holdings, partially via small cells. Meanwhile, T-Mobile is working to broaden its coverage through LTE services running on newly acquired 700 MHz spectrum. And Verizon, for its part, is also working to densify its network with additional small cells and other techniques.

Importantly, AT&T and the rest of the nation’s top carriers – except for Sprint – are participating in the FCC’s ongoing incentive auction of TV broadcasters’ unwanted 600 MHz spectrum licenses. That auction, if it is successful, could provide bidders with significant additional spectrum holdings.

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