Carrier’s recent millimeter wave spectrum license sale raises questions if it’s shifting its 5G deployment strategy.
GeoLinks, a California-based telecommunications company, recently announced it purchased 208 Local Multipoint Distribution Service (LMDS) band spectrum licenses from Verizon. The licenses will cover markets throughout the United States. Once the Federal Communications Commission (FCC) approves the acquisition, GeoLinks will be the largest LMDS license holder in the 29/31 Ghz bands.
The sale reflects a total MHz/POP of 70,612,423,950. New York, Los Angeles, Chicago, Philadelphia, Dallas-Ft. Worth, Atlanta, Houston, Washington, DC, Boston, Tampa-St. Pete, Minneapolis-St. Paul, Detroit, Miami-Ft. Lauderdale, Charlotte, St. Louis, Raleigh-Durham and Indianapolis are among the markets in the spectrum license acquisition.
“The acquisition of this 28 GHz spectrum will allow us to achieve vastly higher speed over longer distances,” said GeoLinks co-founder and CEO Skyler Ditchfield said in a statement. “With this deal we will control our own airwaves and have the ability to provide gigabit and multi-gigabit speeds at lower prices and with fiber-like latency and jitter statistics to our customer base across these markets.
“Thanks to this acquisition, we will be able to deliver superior solutions to existing carriers in the largest cities in the U.S., expand service in suburban areas, and bring connectivity to more underserved markets, all while maintaining our commitment to excellence and reliability. We will also be able to further expand our closing of the digital divide in rural markets while bringing a service offering comparable to the urban markets.”
GeoLinks plans to use its newly acquired spectrum to support its current and growing customer base, and offer faster speeds with fixed point-to-point and point-to-multi-point wireless services, and provide backhaul for 5G services. The spectrum is not suitable for flexible use.
What this spectrum sale means for Verizon
The benefits for GeoLinks in this transaction are clear. The company can achieve faster speeds over longer distances and offer such speeds at affordable prices. There’s more of a question of why Verizon was willing to part with so much mmWave, however. In its race against T-Mobile and AT&T to deploy a nationwide 5G network, Verizon has heavily promoted its network’s speed, which is mmWave spectrum was partly responsible for. Even though that spectrum came with hiccups—its rapid speed was often dampened due to its limited travel capabilities and difficulty moving through objects—it was the focal point of Verizon’s 5G rollout.
The amount of money Verizon has spend over the years to acquire mmWave shows just how critical the carrier thought it was to launch its 5G network. Verizon purchased XO Communications for $1.8 billion in 2016 to secure its fiber and mmWave assets, according to Light Reading. Verizon outbid AT&T the following year and bought Straight Path for $3.1 billion, which gave it more mmWave holdings in the 39GHz and 28GHz bands. The carrier launched commercial mmWave 5G services in 2018 and has recently been acquiring more mmWave licenses throughout the U.S. Two years ago, it spent approximately $500 million for more mmWave licenses in the FCC’s Auction 101.
The combination of Verizon’s hunger for mmWave during the past five years and its steady “fastest 5G” marketing push makes it surprising that the carrier would suddenly want to start selling it. A Verizon spokesperson told Light Reading that it sold spectrum licenses because they “are not suitable for 5G mobility deployment under FCC rules.”
That might be the case for this particular GeoLinks deal, but that explanation doesn’t dissolve the notion that Verizon might be stepping away from the mmWave arena. Especially when the carrier recently led all bidders during the FCC’s C-Band Auction 107. Verizon bid $45.4 billion (total spend was $52.9 billion after incentive payments and closing costs) for 3,500 mid-band licenses. Some might think Verizon is shifting its focus towards mid-band, but the carrier says its just deepening its 5G resources.
“Our growth model is based on a clear vision: We are a multi-purpose network company with the best networks architected by the best engineers on the planet,” Verizon CEO and Chairman Hans Vestberg said in a statement following Auction 107. “This idea of a multi-purpose network at scale is our strategic foundation to maximize growth and put us in a position to realize the best return on investment in the fully-networked economy.
“Since we began building 5G, we have had a first mover advantage. We are more than a year ahead in building and selling mmWave with our 5G Ultra Wideband service and still the only company with commercial Mobile Edge Compute. Now we intend to extend our lead by accelerating our deployment of C-Band. Our new C-Band position combined with our mmWave, means we are the only carrier suited to deploy the fastest, most powerful 5G experience to the most people – or as we call it, 5G built right.”
Joe Dyton can be reached at firstname.lastname@example.org.