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A closer look at Verizon's curious CBRS spectrum purchases

Verizon was the biggest spender during the FCC's recent 3.5GHz CBRS spectrum auction, doling out a total of almost $1.9 billion for 557 licenses in markets across the country.

As Light Reading reported more than a year ago, Verizon has been deploying CBRS network equipment in anticipation of using the band.

The operator sees the CBRS band – both the licensed and unlicensed portions – as a way to add capacity to its existing 4G network.

However, a new analysis by Tutela, a network-monitoring company recently acquired by Comlinkdata, shows that Verizon's CBRS spectrum purchases don't necessarily line up with its most urgent 4G networking needs.

Specifically, as highlighted by Tutela, the operator did not buy CBRS licenses in the markets where its network is the most congested, where its most data-hungry customers live, or where it counts the most potential users.

As a result, the analysts at Tutela conclude that Verizon's CBRS spectrum purchases were likely driven in part by other factors including bidding competition during the CBRS auction and Verizon's likely plans to purchase extensive C-band spectrum later this year.

But before getting into the details, let's take a look at exactly what spectrum licenses Verizon purchased during the recent CBRS spectrum auction.

Verizon purchased spectrum in markets across the country. Click here for a larger version of this image. (Source: Stephen Wilkus of Spectrum Financial Partners)
Verizon purchased spectrum in markets across the country. Click here for a larger version of this image.
(Source: Stephen Wilkus of Spectrum Financial Partners)

In the Northeast specifically, Verizon purchased spectrum in a number of select markets. Click here for a larger version of this image. (Source: AllNet Insights & Analytics)
In the Northeast specifically, Verizon purchased spectrum in a number of select markets. Click here for a larger version of this image.
(Source: AllNet Insights & Analytics)

Although Verizon's CBRS spectrum purchases are scattered across the US, the operator's spending doesn't directly line up with the locations where Verizon is experiencing high levels of network congestion.

That's noteworthy because adding more spectrum is one of the main levers that operators pull when their networks begin to become overloaded with user traffic.

This scatter plot shows that Verizon's CBRS spectrum purchases occurred in markets where its network is experiencing high levels of congestion as well as in markets where its network is seeing less congestion. Click here for a larger version of this image. (Source: Tutela)
This scatter plot shows that Verizon's CBRS spectrum purchases occurred in markets where its network is experiencing high levels of congestion as well as in markets where its network is seeing less congestion. Click here for a larger version of this image.
(Source: Tutela)

Operators typically keep network congestion information a closely guarded secret, though Verizon has hinted that the overall level of congestion on its network is not increasing.

Tutela explained that it calculates network congestion by aggregating three important pieces of information: the percentage decrease in download speeds between on- and off-peak hours, the percentage of tests where upload speeds were faster than download speeds, and the percentage of tests where download speeds dropped below 1.5 Mbit/s.

Each of these factors is then arranged between 0 and 1, and then averaged to maintain the relative severity of each individual factor.

Tutela also found that Verizon's purchases don't necessarily align with the number of people living in each of its new CBRS markets. Click here for a larger version of this image. (Source: Tutela)
Tutela also found that Verizon's purchases don't necessarily align with the number of people living in each of its new CBRS markets. Click here for a larger version of this image.
(Source: Tutela)

However, Tutela did note that Verizon's CBRS spectrum purchases were mainly geared toward increasing its existing spectrum holdings in select markets, specifically those where it already owns between 90MHz and 140MHz of spectrum.

This, Tutela's analysts argued, shows that Verizon's CBRS spectrum strategy focused more on supporting its existing holdings rather than creating a foundation for additional network capacity.

The analysts noted this may possibly be due to the fact that the CBRS band is somewhat unique in that it's shared with federal users including the US Navy.


Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.


Finally, Tutela's analysts speculated on how the operator's CBRS spectrum purchases might affect its customers.

Verizon customers in Honolulu County, Hawaii, as well as parts of California and Virginia, are expected to see the biggest difference in services following the auction.

Related posts:

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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