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700MHz Spectrum Auction Could Transform US Mobile Landscape

The FCC auction of the 700MHz frequency band scheduled for January 2008 in the United States could have a profound effect on the landscape of the mobile communications market, according to a new study from ABI Research, by opening the door to a major new mobile operator. It will also be critical in the building of a national public safety communications network in the US.

According to senior analyst Nadine Manjaro, “This auction means an opportunity for the licensing of another major national mobile operator, perhaps one from outside the traditional fold.” Yahoo!, Apple and Google have all been mentioned as potential bidders, but it is Google that should be taken most seriously: they have already stated their willingness to invest $5 billion in the “C” block of spectrum, perhaps in partnership with a network operator, in order to facilitate a more competitive wireless market.

What are the implications for incumbents if a company such as Google enters this market? “If Google becomes an operator, it will intensify the incumbents’ need to compete,” says Manjaro. “Google has content and money, and could do a lot with that spectrum. They’d be a strong force to be reckoned with in terms of taking subscribers from the incumbents, especially from a company such Sprint, which is already facing challenges in this area.”

The 700MHz band is a part of the UHF band (470 – 862MHz) which is being opened in several regions across the globe including Europe in 2010 and in Korea in 2012 as television moves from analog to digital. British regulator OFCOM also plans an auction for the UHF frequency, called the “Digital Dividend.” Regulators are leaning towards spectrum neutrality, which would let the market determine the ideal use of the spectrum, and are also looking to harmonize use of the spectrum. This band is suitable for 4G technologies such as WiMAX and mobile broadcast TV using technologies such as DVB-H.

ABI Research’s new study, Global Wireless Spectrum Issues: Market Opportunities and Implications provides a global perspective on all of the major spectrum initiatives currently under way, and their implications for vendors, regulators and operators. The report also addresses spectrum trading, mobile liberalization, technology neutrality and the latest developments in the satellite bands. It also covers globally harmonized bands for WiMAX.

It forms part of two ABI Research Services, Mobile Operators, and Wireless Infrastructure.

ABI Research is a leading market research firm focused on the impact of emerging technologies on global consumer and business markets. Utilizing a unique blend of market intelligence, primary research, and expert assessment from its worldwide team of industry analysts, ABI Research assists hundreds of clients each year with their strategic growth initiatives. For information, visit http://www.abiresearch.com, or call +1.516.624.2500.

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