The AWS-3 Acquisition Adds Depth to Verizon’s Spectrum Holdings

In the previous part of this series, we saw that Verizon (VZ) won significant holdings in the FCC’s (Federal Communications Commission) auction for the AWS-3 spectrum. AT&T (T) and T-Mobile (TMUS) also participated in this spectrum auction.

The spectrums can be segregated into low, mid, and high bands based on their frequencies. As you move from low-band to high-band spectrums, the data traffic capacity increases. However, this increase comes at the cost of decreasing coverage. AWS-3 is a band of AWS (advanced wireless services) spectrum that comes in the mid-band. The mid-band is particularly useful for managing increasing wireless data traffic due to its relative coverage and capacity attributes.

Verizon got 181 licenses spanning 192 million people through the spectrum auction. According to Verizon, the AWS-3 spectrum acquisition helped it gain depth in its spectrum holdings. Before the auction, the company’s AWS-1 spectrum holdings were low in the western part of the country compared to the eastern part. Post-acquisition, Verizon had a relatively balanced AWS holding across the nation.

According to the company, after the acquisition, its AWS spectrum holdings over 40 MHz (megahertz) cover ~95% of the population. Before the auction, these holdings covered ~70% of the population.

The acquisition has also helped the company bolster its coverage in the mid-band spectrums over 60 MHz across the country, from ~55% before the transaction to ~84% after the transaction.

If you want to take on diversified exposure to Verizon, you can invest in the Technology Select Sector SPDR Fund (XLK). The ETF held ~5% in the company on March 19, 2015.

You can also get more diversified exposure to the telecommunication company by investing in the iShares Russell 1000 Growth ETF (IWF). The ETF held ~1.8% in the company on the same date.