Asian outfits to enter scrap for 700MHz spectrum

THE WALL STREET Journal said at least four Asian mobile providers are eying the U.S. 700MHz auction.

The real draw for them is the potential for huge piles of wonga from selling enhanced features.

One of the gang of four is NTT Docomo USA, a subsidiary of Japan's largest wireless company is showing signs of buying a $5 billion dollar lottery ticket for the 700MHz “C” block jackpot. Another paid-up member is Japanese carrier KDDI which may jump in because it has been testing a cutting-edge wireless service in the Northeast USA.

Some of the gang of four have already whacked their wonga on the table. This spring, the Chinese government acquired a $3 billion stake in the Blackstone Group, a private equity firm that has invested in wireless businesses including U.S. tower operator Global Tower Partners and Germany's Deutsche Telecom, parent of T-Mobile USA.

Bringing up the tail is Korea's SK Telecom, which bid unsuccessfully, with Providence Equity Partners, in November for a $5 billion slice of the troubled carrier Sprint Nextel. SK Telecom recently boosted its ownership in Helio, a struggling youth-oriented service with 3G data, by pledging up to $270 million in extra funding.

According to Insight Research, most North American wireless users currently pay less than $10 a month for data services. By 2012 that's projected to be $38 a month. Over that same period crystal ball jugglers say wireless data spending by Europeans, Asians, and Latin Americans is only expected to roughly double, to about $20 a month. INQ Argyland scribbler always gets the better end of these deals.

Most Americans have been satisfied with basic data features such as mobile text messaging. However, Asian mobile users already have access to a wide array of services on their phones, from buying food at a vending machine to watching movies on mobile TV.

Docomo pioneered many of those most advanced mobile services in Japan and appears anxious to bring them to other markets. This July, the firm agreed to provide up to $24 million in funding for a super fast wireless network AT&T is building in Hawaii.

Spectrum is limited in the USA. So 700MHz is a big deal because radio waves in this band travel farther, penetrate physical objects better, and bend around obstructions better than in any other band likely to become available in the foreseeable future.

Spectrum availability is not a problem in many Asian countries. So commercial DVB-H TV broadcasts have already started in India and Vietnam, with Malaysia, the Philippines and Indonesia opening similar networks early next year. Research firm Informa has projected entertainment services – games, music, TV, adult content and gambling – would grow to $38 billion by 2011 from around $18.8 billion in 2006.

Lots of people are saying lots of things about the world-wide interest in 700MHz. Nobody knows what will happen. But the cost/effectiveness of datacasting to a million+ people — simultaneously — from a mobile network's tower – means a lot of wonga will be changing hands - and that is hard to dispute.

More here. µ