US Cellular acquires smattering of 700MHz licences from CenturyLink; are further deals in the pipeline?

4 Jul 2012

According to RCR Wireless citing a report issued by Wells Fargo Securities, Chicago-based mobile operator US Cellular has acquired a number of ‘Lower A block’ 700MHz spectrum licences from Louisiana-based fixed line operator CenturyLink. On 22 June US Cellular acquired concessions in Green Bay and La Crosse (Wisconsin); Springfield and Columbia (Missouri); Peoria (Illinois); Lincoln (Nebraska); and Pendleton (Oregon). The purchases are being seen as further evidence that the cellco is seemingly unconcerned about the ongoing interference issues surrounding the lower 700MHz spectrum band.

As reported by TeleGeography’s CommsUpdate last month, US Cellular was one of a number of regional operators to call AT&T Mobility’s bluff, by claiming that studies have demonstrated that there are no interference issues between devices operating in the lower bands of the 700MHz spectrum or the TV broadcast channel 51 – both of which are close to the ‘Lower A block’. Mobile giant AT&T Inc had previously put in place its own distinct and separate ‘band class’ for Long Term Evolution (LTE) devices that would not interoperate with the services deployed by regional carriers in other parts of the 700MHz band; for its part AT&T acquired 227 B block licences in the Federal Communications Commission’s (FCC’s) 2008 spectrum auction, paying a total of USD6.6 billion.

Despite AT&T’s standpoint, US Cellular has already utilised its A block spectrum holdings to support the initial rollout of LTE services across selected markets; through a partnership with King Street Wireless, the cellco picked up more than 150 A and B block licences during the auction, which concluded in March 2008.

US Cellular’s chief competitor in securing A block licences during the auction was Verizon Wireless, which acquired 25 concessions covering primarily urban areas. However, Verizon remains keen to offload its A block (and B block) holdings as it seeks to acquire a significant quantity of nationwide AWS frequencies from SpectrumCo, a joint venture between cablecos Comcast Corporation, Time Warner Cable and Bright House Networks, alongside additional spectrum from Leap Wireless.

Indeed, US Cellular’s willingness to ‘go against the grain’ and utilise A block spectrum for its LTE deployments suggests that it could be a viable candidate to acquire Verizon’s available licences, at least in the markets where it currently has an operational footprint. Further, it remains possible that US Cellular could pursue further CenturyLink licences; in the FCC auction the latter spent USD149 million on a total of 69 A and B block concessions.