NextWave touts NYC progress, but other markets delayed

NextWave said it is providing private wireless networking services over its 2.5GHz spectrum holdings to an unnamed customer in New York City.

However, the company did not expand services to its other markets – San Francisco; Las Vegas; Los Angeles; Dallas; Mobile, Alabama; Peoria, Illinois; and Philadelphia – during 2023, as it had hoped when it launched in 2022. 

An official familiar with the company's plans blamed several issues for the delay. First, the company's 2.5GHz network is running into unexpected interference with T-Mobile's 2.5GHz 5G network in some cities. Additionally, the company is suffering from some equipment supply chain troubles.

However, the official – who asked to remain anonymous – said the company is making progress and expects to launch services in San Francisco and Las Vegas sometime early in 2024.

Slower than expected sales

The developments hint at both the difficulties companies have encountered in chasing the private wireless networking market as well as the opportunities in the sector.

NextWave joins a long and growing list of companies selling private wireless networking services. Such companies include wireless network operators like AT&T, equipment vendors such as Nokia, hyperscale cloud providers like Amazon Web Services, and startups such as Federated Wireless and Celona.

However, NextWave is part of a relatively rare contingent of players that can offer licensed spectrum to their customers. Other companies with this business model include Ligado, Dish Network, Verizon and Anterix, among others.

NextWave is not alone if it is suffering from slower than expected sales of private networking services. Indeed, most big players in the space have suggested that the private wireless opportunity isn't developing as rapidly as expected, but they continue to argue that business will pick up speed as pilot projects turn into full-blown deployments.

A second act

NextWave's private wireless network in New York City – launched near the end of 2022 – marked a historic return by a company that first gained widespread notoriety in the 1990s by bidding heavily in the FCC's PCS spectrum auction. The company walked away with $4.2 billion worth of licenses in the auction, but it quickly fell into bankruptcy. After a protracted legal battle with the FCC, NextWave eventually sold many of its spectrum holdings to Verizon, AT&T, T-Mobile and others.

However, NextWave did hang on to a few spectrum licenses, including its 2.5GHz licenses in a handful of major cities like New York City, San Francisco and Las Vegas. The utility of that spectrum has increased following T-Mobile's massive investment into its own 5G network running in 2.5GHz spectrum.

In 2021, NextWave announced it scored a $200 million loan from Canyon Partners. At the time, Solus Alternative Asset Management and Avenue Capital Group were named as NextWave's main owners. That funding likely helped NextWave prepare for its NYC launch in 2022. 

As FierceWireless reported earlier this year, NextWave's network in NYC spanned 120 eNodeB basestations, supplied by vendor Airspan.

But NextWave's hopes stretched far beyond NYC. According to its website, the company planned to "expand to cover all of NextWave's key markets by early 2023."

That didn't happen, and it's unclear whether NextWave managed to expand its coverage in NYC to 15 million people, as it had intended to do earlier this year.