* Power comes to those with spectrum
Perhaps the biggest impact of the recent Sprint and Nextel merger, eventually, will be the united power of the spectrum collectively owned by the two companies. With more spectrum comes the ability for a given provider to offer broader coverage and service consistency across geographies.
Together, for example, the two companies hold licenses in the 2.5 GHz band in the top 100 U.S. markets, as well as in a number of other markets. Several years back, Sprint, MCI (then WorldCom) and a company called Nucentrix were the top 2.5 GHz license holders. Nextel was the company that scooped up the spectrum from the latter two companies around the time WorldCom was having some financial difficulties that you might have heard about.
The 2.5 GHz band is the licensed band in the U.S. that has been approved for fixed, point-to-multipoint wireless services using the fixed/portable flavor of the much-hyped WiMAX (802.16-2004) technology. Fixed broadband wireless services based on WiMAX-certified products are expected to launch the second half of next year. For now, in the U.S., vendors are building infrastructure for the unlicensed 5.8 GHz band while some licensed 2.5 GHz rules get straightened out.
The FCC sanctioned use of the 2.5 GHz band for mobile services in 2001. Some issues that pertain to interference with fixed services remain and are altering the rules a bit. Still, availability of this band for use of 802.16e, the mobile flavor of WiMAX, when it becomes standardized in mid-2005 with services to presumably follow could be big. Intel, of course, has said that WiMAX will become part of its Centrino technology, with WiMAX connections embedded in notebooks and handhelds in the 2006-2007 timeframe. The devices will need a broadband wireless network for those NICs to connect to.
Collectively, Sprint and Nextel also hold a plethora of spectrum in the 1.9 GHz (“PCS”) band, particularly after Nextel “swapped” most of its 800 MHz licenses and all its 700 MHz licenses for 10 MHz of contiguous spectrum in the 1.9 GHz band with the FCC last summer to reduce interference with public safety networks.
Meanwhile, an FCC auction for more than 200 spectrum licenses in this band kicks off this week, with all the major carriers except Nextel, as well as others, bidding, many hoping to fill in coverage gaps on a market-by-market basis.
