Verizon Communications (NYSE: VZ) plans to participate in next year's incentive auction of 600 MHz broadcast TV spectrum, but the company is more interested in acquiring higher-band spectrum for capacity, according to a senior Verizon executive.
Speaking during the company's third-quarter earnings conference call, Verizon CFO Fran Shammo noted that Verizon first deployed LTE using nationwide, contiguous 700 MHz spectrum. "That doesn't mean that we can't operate with 600," he said. "But 600 and 700 don't play well together. There's a lot of interference. So where we have 700 there would be a lot of work to deploy 600 MHz spectrum."
Shammo said there are areas where Verizon could use more lower-band spectrum, "but it's probably not the top priority. We like the higher band like AWS."
There has been speculation that Dish Network (NASDAQ: DISH) and Verizon could strike a deal for Verizon to get access to Dish's spectrum, most of which sits around the 2 GHz band. The companies would need to strike a deal soon ahead of the FCC imposing anti-collusion rules that prohibit discussions of spectrum agreements ahead of the incentive auction, or would otherwise need to wait until the latter part of 2016 to make a deal after that auction ends.
Referring to Dish Chairman and CEO Charlie Ergen, Shammo said that "we've said that all along that Charlie is sitting on very good spectrum. It's very good for capacity, which is why we spent $10.4 billion in the [AWS-3] auction." Shammo added that "higher frequency spectrum is capacity and that's really what we need at this point in time."
Verizon said the LTE network is now handling around 89 percent of its total wireless data traffic, an increase of about 75 percent in network data megabytes in the past year. Interestingly, Shammo added that it will probably be around the end of 2016 when Verizon launches an LTE-only phone without a CDMA chipset that relies on Voice over LTE only for voice service.
Shammo also touched on Verizon's Go90 over-the-top mobile video service, which launched at the beginning of October nationally to all wireless customers. "This really is just a totally different perspective than linear TV and content deals," he said. Shammo said Verizon has not really done any advertising or promotional activity for the service and is seeing solid traction with it, though he declined to reveal the number of active users.
Go90 is primarily aimed at millennials, and Shammo noted that it now has two exclusive shows: "Top Five Live," a 15-minute daily live variety show with celebrity and musical guests, and "Betch," a sketch comedy show. Shammo said Go90 will add 48 more exclusive content deals by the end of the year.
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