The New Wireless Wars

BusinessWeek writes about the changes taking place in the U.S. wireless scene as the players jockey for "position in the derby that's been labeled Auction 66. Scheduled to kick off on June 29, it's shaping up to be much more than just another sale of the airwaves by the Federal Communications Commission. It involves the biggest chunk of wireless spectrum ever to come up for auction in the U.S., worth an estimated $8 billion to $15 billion."

The article notes that "possible participants include Microsoft (MSFT), TimeWarner (TWX), and News Corp (NEWS). Richard Doherty at the Envisioneering Group said, "It's likely to be the most exciting auction we've ever seen."

The article ponders whether the results of the sprectrum auction will "wipe out two years of wireless industry consolidation" and open up more competition for the current four major network operators in the U.S.

The article looks at potential competitors such as Craig McCaw's Clearwire and Leap Wireless as well as other more well-known players from outside the industry such as Yahoo (YHOO) and Google (GOOG).

According to IDC, "spending on wireless data services is expected to increase from $8.8 billion in 2005 to $27.7 billion in 2009." Craig Mathiasat the Farpoint Group said, "The data market is still quite young. There's a lot of growth ahead."

Envisioneering Group's Doherty noted "business users are expected to be the technology's first adopters. That's the market that might be targeted by EarthLink, which recently snapped up New Edge Networks, a provider of secure network products for corporate customers." Doherty added, "A year from now, who says there won't be a Comcast Wireless?"

Jonathan Atkin at RBC Capital Markets said, "We had a relatively healthy six-player wireless industry not too long ago. And pricing was not overly disruptive. Plus, [the new carriers] may be targeting different niches."

Doherty added, "This may lead to additional consolidation in wireless."