The Coming Wireless Wholesale Wave

November 27th, 2007 - 11:27 pm ICT by admin  

Executives at TerreStar spent their long Thanksgiving weekend sizing up more than just second helpings of turkey. The tiny mobile network operator is considering a run for assets that would help it blaze a cellular communications trail.

TerreStar may participate in a government auction for wireless airwaves scheduled for January. But unlike other potential buyers, such as Verizon Wireless, that would use the spoils to bolster their own cellular services, TerreStar would use acquired spectrum to do something unheard of in telecom: become a wholesale provider of wireless network capacity. Companies such as Level 3 Communications and Global Crossing carry out a comparable function in the area of fiber-optic networks, but they’re peerless when it comes to wireless.

Not if TerreStar and a handful of other would-be bidders can help it. Regulatory filings show that representatives of TerreStar, Frontline, and Mobile Satellite Ventures have all met with Federal Communications Commission officials in recent weeks with an eye to either participating in the auction or joining forces with a winner.

Any one could become a wireless wholesaler that leases its network to mobile-phone service providers, technology companies, government agencies, or other entities that want access to cross-country wireless networks.

Chums with Cash

The potential creation of this new breed of wireless player is the latest indication of how Auction 73 could crack open an industry that has historically been tightly controlled by incumbents such as AT&T, Sprint Nextel, and Verizon Wireless, a joint venture of Verizon Communications and Vodafone. The government has already rewritten the rules to require the winner of some of the airwaves to open its networks to cell phones and features sold by competitors.

The contest is expected to draw other newcomers, including Google. Even Apple has considered joining the fray.

Whichever companies bid will need plenty of cash not only to win an…

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