Reuters’ Sinead Carew offered up this insightful post this morning examining how a lack of spectrum may drive some risky tie-ups. That’s not a new angle, of course — my colleagues Ryan Kim and Stacey Higginbotham have documented how the quest for more airwaves is behind all sorts of M&A rumors involving everyone from T-Mobile and Sprint to LightSquared, MetroPCS and Leap Wireless. The challenge for all these players won’t just be finding the right partner(s), it will be integrating networks and services in the most efficient ways possible — and doing it before the competition does.
The big story this morning is Qualcomm’s move to shutter its lifeless MediaFLO business and sell a swath of spectrum licenses to AT&T for $1.93 billion. And there are plenty of interesting angles to the development: Barron’s notes that Qualcomm scored a big payoff for the spectrum, while Time points out that AT&T users shouldn’t expect the deal to pay off in the form of better 3G coverage. But the biggest question was posed by Om, who wondered whether the FCC will actually approve the pact. The FCC has said repeatedly that one of its key priorities is to encourage innovation by stoking competition, and it is exploring ways to help newcomers and smaller service providers. So I expect the commission to extract some concessions from AT&T for this one to go through.
President Obama this morning signed an official memorandum calling for the government to provide 500 MHz of new broadband spectrum. Such a move will be necessary, of course, given the ever-increasing demand for mobile data and the limited amount of spectrum currently available. But the FCC’s plan depends heavily on reclaiming spectrum from TV broadcasters who have already begun to squawk about losing their long-held airwaves. So while signing a memo is an easy way to make headlines and appease the mobile industry, actually claiming all that spectrum and making it available for wireless use will be very difficult indeed.
More signs of the coming wireless bandwidth apocalypse: A new survey shows that consumers are increasingly keen to watch video content on mobile devices, especially those in the 18-29 demo. That’s going to put even more strain on already groaning wireless networks, and probably cause AT&T to whine even more about iPhone users hogging bandwidth. Meanwhile, Apple wants to increase mobile music and video consumption by shifting iTunes to the cloud. It’s probably also looking for another iPhone wireless partner.