Verizon Wireless (NYSE:VZ) is thinking about unloading some of its spectrum assets in an auction, which could bring in billions of dollars. But money isn’t the real reason.
Instead, this looks like a move to win approval to buy spectrum from cable operators such as Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC). Keep in mind that other wireless carriers, such as Sprint (NYSE:S), T-Mobile USA and MetroPCS (NYSE:PCS) have been trying to block the auction.
It’s convoluted stuff, but it shows that spectrum is a critical asset, especially as smartphones grab a bigger chunk of the market. The problem is that there’s not much to go around. So Verizon’s willingness to sell some of its spectrum holdings could ease the pressure.
In the meantime, the company continues to grow at a nice pace. Verizon reported its earnings today, beating Wall Street expectations. And yes, a big driver was smartphone sales.
In the first quarter, earnings rose from 51 cents a share to 59 cents a share, with sales up 4.6%, to $28.2 billion.