AT&T to use Lower 700 MHz D and E Block spectrum for LTE Broadcast

AT&T (NYSE:T) plans to use the 700 MHz Lower D and E Block licenses it acquired in 2011 from Qualcomm (NASDAQ:QCOM) for an LTE Broadcast service, according to AT&T CEO Randall Stephenson.

Stephenson disclosed the plans during an appearance at the Goldman Sachs Communacopia Conference. AT&T acquired the unpaired licenses for $1.93 billion in December 2011 from Qualcomm, which had used the frequencies for its now-defunct MediaFLO mobile TV service. AT&T previously said it intended to use the spectrum to provide a supplemental downlink using LTE Advanced carrier aggregation in conjunction with its other AWS, PCS and cellular licenses. That still seems like part of the plan, as Stephenson said AT&T will look to pair the former Qualcomm spectrum with other spectrum bands.

Stephenson said AT&T's focus is now almost "all about architecting networks to deliver video" and that will be where AT&T will spend the most capital over the next three years. He said AT&T is developing a "broadcast capability" to remove video traffic from its wide-area wireless networks.

Stephenson noted that of the former Qualcomm spectrum, AT&T now controls around 12 MHz on both coasts and 6 MHz across a broad swathe of the rest of the country, which he said would be ideal airwaves for an LTE Broadcast solution. "It seems to be a very elegant solution," he said.

LTE Broadcast uses evolved Multimedia Broadcast Multicast Service (eMBMS). Essentially, LTE Broadcast allows the same content to be sent to a large number of subscribers at the same time, resulting in a more efficient use of network resources than each user requesting the same content and then having the content unicast to each user.

Stephenson did not say exactly when AT&T would deploy LTE Broadcast. "You'll see it mature in scale within the three-year time horizon," he said. AT&T claimed in an FCC filing in June that it cannot deploy LTE over its 700 MHz Lower D and E Block spectrum until mid-to-late 2014 because the necessary interoperability test cases for LTE Advanced carrier aggregation are still in development within 3GPP.

Verizon Wireless (NYSE:VZ) expects to first deploy LTE Broadcast early next year and use the Super Bowl as a test case for the technology. "2014 is a definite" for the launch of LTE Broadcast service, Rich DeSantis, executive director of advanced solutions for Verizon Wireless, told FierceBroadbandWireless in March.

Stephenson also touched on a number of other topics during his conference appearance. He reconfirmed what AT&T disclosed late Friday, that it is "exploring opportunities to monetize some or all of its remaining wireless tower assets." Stephenson said there are around 10,000 non-strategic towers AT&T is looking to sell. He said AT&T will explore, "can you sell them in a way that preserves your ability to access them if you need new capacity?"

Stephenson also said AT&T will use Leap Wireless (NASDAQ:LEAP) to aggressively go after the "price-sensitive" part of the market, where it is currently feeling pressure. AT&T hopes to close its $1.2 billion acquisition of Leap early next year and Stephenson said that the company will take the Cricket brand nationwide. "You should assume that we will be very aggressive at that end of the market using that brand," said, competing not only on coverage but on price. His comments are notable in light of the fact that AT&T's new prepaid brand, Aio wireless, also has ambitions to be a major nationwide prepaid brand on the same level as T-Mobile US' (NYSE:TMUS) MetroPCS brand.

AT&T said late Friday it expects third-quarter smartphone upgrades to be higher year-over-year, and similar to the 6.8 million it had in the second quarter, and expects to grow its smartphone base by more than 1 million in the quarter. AT&T also said it expects lower year-over-year smartphone upgrades in the fourth quarter, however, given the higher upgrade expectations for the third quarter and its new 24-month upgrade policy.

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