Verizon CFO: Spectrum Sale to 'Play Out' in Q1

LR Mobile News Analysis Dan Jones, Mobile Editor 11/9/2012

Verizon Wireless now expects to sell parts of its A and B Block 700MHz spectrum and is developing internal plans for the rest of this 4G spectrum.

Verizon Communications Inc. (NYSE: VZ) CFO Fran Shammo gave some insight into those plans at the Wells Fargo & Co. conference Thursday. "We have to let this process play out and I think it will play out by the first quarter," said Shammo.

"The auction is still ongoing and there we have some what I would call very serious discussions ongoing," he told the financial crowd. Shammo reiterated that the operator doesn't consider this spectrum a "bargain" buy and wants a "serious" price for the bandwidth.

"There are other portions that we probably won't sell and that we are developing internal plans for," he added.

Verizon said it would sell A and B Block spectrum it won at auction in 2008 in April 2012, but only if it won its bid for an Advanced Wireless Services (AWS) spectrum swap. The swap was approved at the end of August.

LTE Rising
The CFO also provided an update on its 4G Long Term Evolution (LTE) network.

"We will have completed this build by mid-2013," Shammo said. "We have more coverage than all of our competitors combined"

Verizon currently covers 419 markets and more than 80 percent of the U.S. population. Rival AT&T Inc. (NYSE: T) said this week that it intends to complete its LTE build in 2014, covering more than 300 million people, or 99 percent of the U.S. population. (See AT&T Puts Up $14B to Boost Broadband.)

"I now have 35 percent of my data traffic running on LTE," the CFO added later, suggesting that this will likely mean that 2013 capex will "stay flat" with 2012 wireless spending as the operator adds capacity to support growing data usage on the 4G network.

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— Dan Jones, Site Editor, Light Reading Mobile