Stifel Nicolaus analyst Rebecca Arbogast believes that Verizon will win the C block spectrum auction, Forbes says, This means that Google won’t have to shell out $4.6 billion on spectrum–and, importantly, that any network built with the spectrum will have to be open (thus benefiting Google)
This could explain why Google’s stock reversed course yesterday in a horrific tape–charging higher as the market collapsed. Investors have been concerned that Google will burn $5 billion of cash on spectrum and possibly another $5-$10 billion on infrastructure, completely changing the dynamics of its business model.
If Verizon wins the C block, our understanding is that Google will now get to have its cake and eat it, too. Because it was willing to spend $4.6 billion, the winner of the licence (Verizon, according to Arbogast) will have to make the network open.
Bidders are bound to secrecy, and Arbogast’s information still sounds speculative at this point:
“Verizon wants more spectrum to close the gap between it and AT&T,” said Stifel Nicolaus analyst Rebecca Arbogast. Verizon owns 49 megahertz of spectrum compared to AT&T’s 75 megahertz. “I’m reasonably confident that Google does not have the spectrum now,” she added.
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