The Best Way to Track Wireless: Follow the Spectrum

The mobilization of just about everything makes it completely understandable that the battle for spectrum – which always has been hot – is becoming even more intense.

Indeed, it is becoming difficult to keep the players straight without a scorecard. Perhaps, at this point, a recap of the latest moves is in order.

• Last week – as IT Business Edge posted on Friday – Deutsche Telekom upgraded its offer for MetroPCS in response to opposition to the deal by hedge fund Paulson & Co., the target’s largest shareholder. The deal was reworked to reduce the amount of debt included from $15 billion to $11.2 billion and the vote was rescheduled for April 24. Paulson is now a “yes.”

• Yesterday, Dish Network announced an offer of $25.5 billion for Sprint Nextel. Last October, Softbank and Sprint Nextel had announced a deal in which the Japanese telecommunications firm would acquire 70 percent ownership of the carrier for $20.1 billion. The money was to be divvied up between distribution to Sprint shareholders ($12.1 billion) and an $8 billion investment in the company. That deal – at least as it now is structured – now is deeply in doubt. s.

• Numerous sites are reporting that Verizon Wireless is trying to buy spectrum licenses from Clearwire in major cities. The Dallas Business Journal’s report on the negotiations builds on a Wall Street Journal story. Verizon Wireless is said to be offering as much as $1.5 billion for the leases. It’s a complex undertaking: Sprint – which itself is being pursued by Softbank and Dish – is a part owner of Clearwire. The story says that Sprint is in the process of acquiring the part of Clearwire it currently doesn’t own and has certain contractual rights that could be an obstacle to a spectrum deal with Verizon Wireles

These situations are a bit frustrating: There clearly is a great deal going on but, at the same time, it is difficult to make any meaningful assessments until deals are alternately done and abandoned and the dust settles.

Some preliminary “no-brainer” type comments are possible, though. The first and most obvious is that spectrum is king.

That said, the most interesting of the moving parts is the faceoff between Dish Network and SoftBank. Dish executives undoubtedly see the deal as a key to its long-term fortunes and, perhaps, even its survival. That clearly isn’t the case for SoftBank. While there is a lot of work to do assessing the offers – and a possibly improved offer by the side that comes up short — it’s difficult to bet against an entity that is desperate. In this case, that’s Dish.

The Verizon piece also is interesting. The InfoWorld report on the negotiations raises the possibility that its goal may be to supplement existing customer services rather than build its base subscriber capacity:

Clearwire’s frequencies, which are in a higher band than most cellular systems and are well-suited for relatively short-range services, might allow Verizon to add more data capacity to its network in urban areas.

In other words, the idea may be to enhance home networking and integrate small cell technology rather than add home to macro base station capacity.

The bottom line is that the best way to figure out what is going on during these exciting days in the cellular arena is to follow the spectrum.