Verizon’s $3.6 Billion Spectrum Deal: Who Wins And Who Loses?

Add a comment December 3rd, 2011  

Verizon’s $3.6 Billion Spectrum Deal: Who Wins And Who Loses?, The crunch of everyone suddenly using their new smartphones is creating some strange bedfellows in the wireless industry.

Bright House Networks and other cable TV companies that normally compete with Verizon for customers are selling a wide swath of wireless spectrum to Verizon’s Wireless arm for a lump sum payment of $3.6 billion. Ultimately, the deal means Bright House could end up with a $189 million payout as well as a deal to market Verizon Wireless phones in Tampa Bay, company officials said.

The deal centers on the sale of wireless spectrum, the roadway cellular networks use to connect their antenna towers to individual customer phones for making calls and transferring data. A shortage of spectrum has two forces intersecting.

Cellular companies such as Verizon Wireless seek more wireless space to handle the millions of smartphone-buying customers, who gobble up data downloads checking Facebook pages, shopping online and uploading video clips.

And cable TV companies bought huge amounts of spectrum years ago to get in on that action. So far, however, Bright House has yet to start using that spectrum beyond initial tests. Now Bright House and other cable companies are turning the spectrum into cash.

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