Verizon Wireless May Skip Next Spectrum Auction, Has Enough Radio Frequencies to Power Mobile Phones for Years

Verizon has enough wireless spectrum, or the radio frequencies that power wireless services, to keep up with customer demand for the next few years, the company said.

Verizon's Chief Technology Officer Tony Melone said that the company will not need to participate in the next spectrum auction and has enough spectrum for the years, CNet reports. Verizon just spent $10.4 billion on the most recent government auction,

"With the addition of the licenses won at this auction we have spectrum holdings that allow us to cost effectively meet the anticipated growth needs of the business in the near term," Melone told investors on a conference call.

Verizon could sit out of the next government-sponsored spectrum auction, scheduled for early 2016. That very well might be Verizon's strategy as the company is trying to show competitors that it has enough power to remain the number one wireless carrier. Verizon might even be trying to gain more favorable terms during the bidding process and give itself some time to recover from the latest spectrum purchase.

If Verizon delays, T-Mobile and Sprint could be hurting. The two smaller carriers are relying on the next spectrum auction to boost their networks.

"You can't take AT&T and Verizon out of the auction," J. Armand Musey, a managing director at Goldin Associates, said. "They make up more than 70 percent of the market. And they have much deeper pockets than anyone else that would participate in this auction."

The latest spectrum auction, which ended last month, brought in $45 billion in revenue to the federal government. That is well above the $10.6 billion goal the FCC had. AT&T and Verizon, along with Dish Network, spent $42 billion out of the $45 billion in spectrum at the most recent auction. Taking Verizon out of the auction would mean far less spending.

Small regional wireless carriers, too, depend on spectrum auctions to improve their services. They also agree that any delay of the auction would be bad.

"Delaying the auction would be bad for all competitive carriers," Erich Graham, senior vice president at C Spire, a regional operator based in Mississippi, said.