Comcast (Nasdaq: CMCSA) is sitting on a double blessing of spectrum just when the wireless industry is overturning every rock and rotted piece of plywood to find more to meet exploding broadband data demand.
The obvious chunk of spectrum is the $1.29 billion worth that Comcast bought during a government auction. Along with Time Warner Cable (NYSE: TWC), the nation's top MSO has been letting that sit fallow, which drew some sharp comments from investment strategists at the RCR Wireless Mobile and Broadband Tour and Conference in Philadelphia.
"Comcast sits on the sideline. Spectrum is mothballed and it's trade bait," said Marc Ganzi, chief executive officer of Global Tower Partners who emphasized he wasn't criticizing the MSO, just pointing to the reality of the situation. "People who have sat on spectrum historically have done well."
Comcast is sitting on another less obvious swath of spectrum as well: broadcast spectrum it acquired with NBCUniversal, added David Berkman, managing partner of Associated Partners, who called it "one of the best assets" the MSO got with the broadcast deal.
The value of spectrum has increased as the wireless market has contracted. With only three viable wireless players, it's not feasible to build out a new wireless competitor and "far cheaper" to buy capacity and expand what's already there, Ganzi said.
Comcast Ventures Principal Dave Zilberman kept himself above the spectrum fray, conceding that the MSO is in a good position spectrum-wise but stating, "I'm not taking that bait" and getting into the conversation.
Zilberman was more willing to talk about Comcast's "significant business" backhauling wireless traffic.
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So Comcast ... where's the wireless?