AT&T Wireless purchases Leap Wireless (Cricket Wireless)

[ericdabbs]

Yeah I know ATT nor any carrier would make any concessions unless forced by the FCC.  I just hope the FCC puts required divestitures on the PCS spectrum.  I am sure the main reason for the Leap purchase for ATT is that they covet the AWS spectrum so they can combine their AWS holdings to deploy LTE on it.  The PCS spectrum is just the cherry on top.

[hxnk134]

Yeah I know ATT nor any carrier would make any concessions unless forced by the FCC. I just hope the FCC puts required divestitures on the PCS spectrum. I am sure the main reason for the Leap purchase for ATT is that they covet the AWS spectrum so they can combine their AWS holdings to deploy LTE on it. The PCS spectrum is just the cherry on top.

They are planning on using PCS for LTE also and iphone 5, for example, already supports Band 2 (PCS). I think the AWS gained will, as AJ said, give them scale in terms of equipment purchases, but PCS is not any less valuable for LTE than AWS long term. Short-term, AWS is more valuable because it's not being used for HSPA.

[ericdabbs]

They are planning on using PCS for LTE also and iphone 5, for example, already supports Band 2 (PCS). I think the AWS gained will, as AJ said, give them scale in terms of equipment purchases, but PCS is not any less valuable for LTE than AWS long term. Short-term, AWS is more valuable because it's not being used for HSPA.

 

I understand that PCS spectrum is still valuable spectrum and will eventually be converted to LTE.  I am just saying if divestitures were required on either PCS or AWS on this deal, I am sure ATT would choose PCS over AWS since they have a decent amount of PCS spectrum holdings already and ATT needs to deploy their AWS spectrum soon.

[MacinJosh]

Is this what you are seeking?

 

 

Leap PCS does little for AT&T outside of the Pacific Northwest -- Seattle and Portland, which were Cingular sore spots prior to the AT&TWS merger nine years ago.

 

AJ

 

Looks like at&t will have to divest some of that PCS Spectrum they would acquire from this deal.

[MacPCS]

In my opinion, the FCC should require divestiture so that:

• They should not have more than 30Mhz of AWS in any one market upon completion of the merger.
• Their combined PCS + AWS in any market should not exceed 60Mhz upon completion of the merger.

And finally my blanket rule for all mergers involving ATT and VZW: Require them to divest any Cell 850 spectrum so they own no more than half the Cell 850 spectrum in a given market. They can do this through spectrum swaps or sales if they'd like. It's just stupid to have ATT or VZW owning both the A and B sides of the spectrum in a given market (or even all of one side and part of another).

That's a little unreasonable.

[iansltx]

I decided to do an analysis of a market near and dear to me: San Antonio.

 

Currently...

 

• AT&T has both Cellular licenses, 5x5 of PCS, and what looks to be no AWS; I'm guessing the duplicate 1735-1740 license goes to T-Mobile in this case. Plus 12x12+6 of 700. So, discounting unpaired 700, 84MHz of spectrum they can use right now.
• Verizon has 15x15 of contiguous PCS, plus its usual 700MHz license, plus 10x10 of SpectrumCo AWS.
• Sprint has 15x15 of contiguous PCS, though this PCS isn't contiguous with the G block. They also have BRS/EBS, but I don't feel like doing those calcs.
• T-Mobile has 10x10 + 5x5 of PCS, with no hope of getting that contiguous through reasonable spectrum swaps. They also have 10x10 + 10x10 of AWS.
• CricKet has 10x10 of PCS (5x5 ex-Pocket Communications, who itself bought it from AT&T Wireless...I mentioned on StopTheCap that this was a divestiture requirement of AT&T + Cingular but it might have just been AT&TWS selling spectrum to keep afloat back when you didn't need tons of spectrum to be viable), plus 5x5 of AWS. I don't think they actually deployed 5x5 LTE on that spectrum...and I'm not sure how to use my Optimus Regard to check...but overall not a bad position.
• Aloha, a spectrum speculator of some sort, has 10x10 of AWS below Verizon's block.

 

So, if AT&T is unscathed by divestiture requirements in San Antonio, they'll end up with 10x10 + 5x5 of PCS and 5x5 of AWS.

 

A spectrum swap apiece in PCS and AWS would give AT&T 15x15 contiguous in PCS while boosting T-Mobile to 20x20 contiguous in AWS, without any other contiguity changes. On the PCS side, T-Mobile would swap its 1895-1900 uplink PCS disaggregation for AT&T's 1885-1890 block, re-aggregating the 1895-1910 block. On the AWS side, AT&T's new 1740-1745 block would get swapped for T-Mobile's 1730-1735 one.

 

Since AT&T owns so much CLR spectrum in San Antonio, they could then choose to run all non-LTE operations in CLR without any fear of capacity issues (since they're pretty much doing that right now), and hit a 15x15 FD-LTE channel in PCS (which devices like the iPhone support). And they'd still have AWS to add a little bit of capacity for devices with AT&T's initial 4 + 17 LTE band support.

 

And of course that would mean that T-Mobile could continue to run DC-HSPA+ in PCS, and eventually hit 20x20 FD-LTE in San Antonio, with a smooth transition from 10x10 to 15x15 to 20x20 as their subscriber base gets phones that support LTE in AWS and/or HSPA+ in PCS. And in the mean while, GSM will sit on TMo's lonesome 5x5 PCS block for as long as it needs to.

 

As a side note, I expect Verizon to buy up Aloha's AWS license to San Antonio within a year or two, allowing them to run 20x20 FD-LTE in town potentially before T-Mobile does, and almost certainly before AT&T hits 15x15 in PCS. But not before Sprint launches TD-LTE in BRS/EBS, considering that carrier's market share in SA, how far NV has come there, and how much the area is blanketed by Clear WiMAX.

[iansltx]

That's a little unreasonable.

 

I agree. Though more than 50 MHz of AWS or 50-60 MHz of PCS should probably be divested.

[MacPCS]

I agree. Though more than 50 MHz of AWS or 50-60 MHz of PCS should probably be divested.

this sounds a little more fair.

 

You can't be too heavy handed about mandating divestures if you're the FCC. Particularly when you auction off more and more spectrum every few years. It would make sense to set the threshold fairly high at like you said, 50 or 60 MHz and then maybe consider blocking them from acquiring more through the H block auction or further acquisitions in these particular bands.

[mozamcrew]

In my opinion, the FCC should require divestiture so that:

• They should not have more than 30Mhz of AWS in any one market upon completion of the merger.
• Their combined PCS + AWS in any market should not exceed 60Mhz upon completion of the merger.

And finally my blanket rule for all mergers involving ATT and VZW: Require them to divest any Cell 850 spectrum so they own no more than half the Cell 850 spectrum in a given market. They can do this through spectrum swaps or sales if they'd like. It's just stupid to have ATT or VZW owning both the A and B sides of the spectrum in a given market (or even all of one side and part of another). 

That's a little unreasonable.

Why do you think that's unreasonable? Which parts? If it was 70Mhz of PCS + AWS would that make this ok?

[MacPCS]

It caps the spectrum limit too low.  That's the unreasonable part.  I'm all for not letting one company control the whole enchilada - but you have to allow them to acquire spectrum pretty freely otherwise you might as well just lease it annually like AJ proposed (in another thread?).  The only reason to limit the amount is to not let one company monopolize (or duopolize) the market.  

[mozamcrew]

It caps the spectrum limit too low.  That's the unreasonable part.  I'm all for not letting one company control the whole enchilada - but you have to allow them to acquire spectrum pretty freely otherwise you might as well just lease it annually like AJ proposed (in another thread?).  The only reason to limit the amount is to not let one company monopolize (or duopolize) the market.  

I'm with you in spirit on this one Mac, I don't want the FCC micromanaging the spectrum allocations of different companies either. I think we just disagree in this specific instance about the size of the cap for this merger. I'm going to create another post to explain the rationale for my lower cap in this specific instance.

[maximus1987/lou99]

Who's gonna buy Leap's A block?

 

http://mobile.bloomberg.com/news/2013-07-15/at-t-s-spectrum-deal-with-leap-clouds-true-value-of-acquisition.html?cmpid=yhoo

[bigsnake49]

Here's some interesting maps at Gigaom:

 

http://gigaom.com/2013/07/15/a-birds-eye-view-of-the-att-leap-wireless-merger/

Edited July 16, 2013 by bigsnake49

[maximus1987/lou99]

Here's some interesting maps at Gigaom:

 

http://gigaom.com/2013/07/15/a-birds-eye-view-of-the-att-leap-wireless-merger/

Mosaik's maps are so annoying! Why can't they use high contrast maps?

"Hmmm. How shall be color our maps? I know!:

(255,255,255),(255,255,254),(255,255,253)..."

[maximus1987/lou99]

Will ATT tell low-paying Cricket subs to scram?

 

AT&T Will Buy Leap for Spectrum and Get Low-Paying Customers

 

http://mobile.businessweek.com/articles/2013-07-15/at-and-t-buys-leap-for-spectrum-gets-low-paying-customers?campaign_id=yhoo

 

ATT already has two prepaid brands: GoPhone and it-that-shall-not-be-named.

I doubt it's gonna take on another. I looked at Cricket's prices and if anything, ATT will get rid of ITSNBN and just replace it with Cricket. ITSNBN isn't even available outside of 3 markets.

[Rawvega]

Who's gonna buy Leap's A block?

 

http://mobile.bloomberg.com/news/2013-07-15/at-t-s-spectrum-deal-with-leap-clouds-true-value-of-acquisition.html?cmpid=yhoo

 

The most likely candidate is USCC in my opinion.

[WiWavelength]

The most likely candidate is USCC in my opinion.

USCC just bailed out of Chicago by selling off the market to Sprint. No way does USCC buy back in for only LTE spectrum.

 

AJ

[Rawvega]

Who else is there? Sprint has no other 700MHz licenses and as such probably wouldn't be interested. T-Mobile only has a 700MHz in Boston via MetroPCS with no announced plans to do anything with it. AT&T has shown no interest in 700MHz lower A licenses since they don't want to support Band 12 and 700MHz interoperability. Verizon has likewise shown no interest in 700MHz lower A spectrum. So who's left that's a willing buyer?

[maximus1987/lou99]

Who else is there? Sprint has no other 700MHz licenses and as such probably wouldn't be interested. T-Mobile only has a 700MHz in Boston via MetroPCS with no announced plans to do anything with it. AT&T has shown no interest in 700MHz lower A licenses since they don't want to support Band 12 and 700MHz interoperability. Verizon has likewise shown no interest in 700MHz lower A spectrum. So who's left that's a willing buyer?

Speculator.

[Rawvega]

A quarter of a billion dollars (give or take) is a lot of money to speculate with...

[maximus1987/lou99]

A quarter of a billion dollars (give or take) is a lot of money to speculate with...

Once chan 51 is cleared, they'll make band 12 devices. ATT is running LTE in Chicago on 5x5, right?

It's the surest speculation I can think of.

[WiWavelength]

A quarter of a billion dollars (give or take) is a lot of money to speculate with...

 

I have said it before and will say it again:  there is too much spectrum in circulation.  Speculators may be headed for a crash.

 

AJ

[maximus1987/lou99]

I have said it before and will say it again: there is too much spectrum in circulation. Speculators may be headed for a crash.

 

AJ

Hopefully Dish bears the entire crash!

[bigsnake49]

Who else is there? Sprint has no other 700MHz licenses and as such probably wouldn't be interested. T-Mobile only has a 700MHz in Boston via MetroPCS with no announced plans to do anything with it. AT&T has shown no interest in 700MHz lower A licenses since they don't want to support Band 12 and 700MHz interoperability. Verizon has likewise shown no interest in 700MHz lower A spectrum. So who's left that's a willing buyer?

 

They (Verizon) certainly have alot of lower A licenses for not being interested.

[maximus1987/lou99]

They (Verizon) certainly have alot of lower A licenses for not being interested.

The better to screw with the smaller carriers. Verizon knew about the ch 51 issues so it had no plan to actually use them.

Do they still have any A block left?