Cable and Satellite TV Providers to Bid Aggressively at FCC Auction

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Cable and Satellite TV Providers to Bid Aggressively at FCC Auction

7:30 am on August 10, 2006 | Category: Business, Telecom Services, Wireless

Communications providers are increasingly trying to do everything by offering “quadruple-play” bundles of telephone, television, internet, and wireless services.

And as telephone operators such as Verizon and AT&T creep in on the pay TV market, cable and satellite providers are getting increasingly jealous.

That’s why the satellite and cable television industries have built alliances to bid on wireless spectrum at the current FCC auction, so as to bring their own brands to the forefront of the highly profitable cellular phone business, and make gains in wireless broadband to boot.

Three of America’s leading cable companies, Time Warner, Comcast, and Cox Communications, have formed an alliance to bid on spectrum, probably with the ultimate intention of rolling out their own nationwide mobile phone network.

DirecTV and EchoStar Communications, meanwhile, which between them dominate the U.S. satellite TV industry, have also been approved to bid in the multi-billion dollar auction.

“The nontraditional players will be the main bidders,” said Kagan Research analyst, Sharon Armbrust. “It’s a hole in their game plan they need to fill.”

This means that traditional cell phone providers, such as Cingular Wireless, Verizon Wireless, and T-Mobile USA will be put on the defensive to fortify their spectrum holdings in competitive markets, and prevent new players from getting their feet in the door.

Whoever gains the upper hand in this month’s wireless auction, there will be a long road of cutthroat competition ahead for all players in the wireless industry. With the American cell phone market nearing the point of saturation, and Canada’s situation not far behind, this battle will have to be fought less with brute marketing force, and more with the ability to please existing customers.

Such is the climate of competition in this age of consumer domination.