Verizon Wireless agreed to purchase wireless spectrum from SpectrumCo—a consortium of Comcast, Time Warner Cable and Bright House Networks—for $3.6 billion. If it meets regulatory approval, the purchase will allow Verizon to extend its wireless networks in the U.S., but it will also have several other ramifications to the mobile industry.
As part of the deal, the participating cable companies have the right to market Verizon Wireless’ service and Verizon has the right to market the cable providers’ services, potentially opening up a scenario where consumers would be able to purchase quad-play services consisting of cable, Internet, phone and wireless service all in the same bundle and on the same bill, the New York Times says. The deal also puts the squeeze on AT&T, whose merger with T-Mobile—prompted in part by AT&T’s need for more spectrum—looks increasingly unlikely. And it could adversely affect Clearwire, which finally made a deal with its majority owner Sprint last week. Verizon’s move means Clearwire will have trouble using the cable companies to diversify, ZDnet says.
"This is a real game-changer for both sides,” said Vince Vittore, principal analyst at Yankee Group and author of the new report “A Three-Step Strategy to Make MSOs Mobile.” “Cable operators have always been hesitant about getting into mobile services and with good reason. The real key to this deal is allowing the three large MSOs the ability to sell mobile broadband services without going through the capital-intensive network build-out."
Daily Insight | December 9, 2013
Daily Insight | December 4, 2013