T-Mobile buys spectrum for $8 bn; Verizon, Sprint didn’t bid

T-Mobile 600 MHz spectrumUS telecom operator T-Mobile has purchased 31 MHz low-band spectrum for $7.99 billion during the recently concluded 600 MHz FCC spectrum auction.

Bellevue, Washington-based T-Mobile won 45 percent of all low-band spectrum sold, covering 100 percent of the US and Puerto Rico, quadrupling the Un-carrier’s low-band holdings.

With the purchase, T-Mobile owns 41.1 megahertz of spectrum below the 1-gigahertz frequency, compared with 46.2 megahertz for Verizon and 70.5 megahertz for AT&T, according to Bloomberg Intelligence.

ALSO READ: FCC document on spectrum auction and winners in 2017

Comcast and AT&T were among the other significant bidders. AT&T acquired nearly $1 billion worth of spectrum.

Sprint and Verizon Communications didn’t bid at all in the spectrum auction. The absence of Verizon during the spectrum is indicating that Verizon may be looking for buying cable operator Dish Network. US-based Dish Network spent $6.2 billion on wireless airwaves.

ALSO READ: Bloomberg report on FCC spectrum auction

T-Mobile will be utilizing the spectrum later this year in parts of the country. Ericsson and Nokia have announced availability of 600 MHz equipment that T-Mobile will use in its network, and the Un-carrier has 600 MHz licenses covering over one million square miles where T-Mobile expects at least 10 MHz to be clear this year.

“T-Mobile’s network is already the fastest, most advanced in the country, and this will take it to a whole new level – and we’ll do it fast,” said Neville Ray, T-Mobile CTO.
Qualcomm is introducing chipsets supporting 600 MHz, and T-Mobile expects leading smartphone makers to begin delivering 600 MHz compatible phones as soon as this year.

“These auction results are a win for everyone, especially consumers, and generated billions for broadcasters and US taxpayers,” said John Legere, president and CEO of T-Mobile.

T-Mobile now owns premium low-band spectrum. With this purchase, T-Mobile now has significantly more low-band spectrum per customer than any other major provider and nearly triple the low-band spectrum per customer than Verizon.

The telecom company will be able to expand its LTE network to compete in every corner of the country, strengthen existing LTE coverage and increase capacity to meet customers’ growing demand for mobile data. Low-band spectrum substantially improves in-building coverage and also travels greater distances than mid-band and high-band spectrum.

FCC auction details

Dish Network spent $6.2 billion on wireless airwaves. Only T-Mobile US bid more in the spectrum auction, spending $8 billion out of the $19.8 billion in total proceeds.

Prices for this auction were significantly lower than a U.S. airwaves sale that drew $44.9 billion in bids in 2015. The average price per megahertz per U.S. resident was about 90 cents, compared with $2.72 in that sale, said Kevin Roe, of Roe Equity Research.

The airwaves auctioned by the FCC were voluntarily surrendered by TV stations so the frequencies can be repurposed for surging wireless data traffic. Stations are getting $10 billion in payments to go off the air or move to other airwaves.

Comcast, which plans to unveil a new wireless service that uses Wi-Fi hotspots and Verizon’s cellular network, bid $1.7 billion on airwaves.

At $19.8 billion in gross revenue for 70MHz of spectrum, the incentive auction is among the highest grossing auctions ever conducted by the FCC.

“Consumers are the real beneficiaries, as broadcasters invest new resources in programming and service, and additional wireless spectrum opens the way to greater competition and innovation in the mobile broadband marketplace,” FCC Chairman Ajit Pai said.

FCC said wireless carriers bid $19.8 billion on mobile broadband spectrum. 50 winning bidders won 70 MHz of licensed spectrum nationwide. 14 MHz of spectrum is available for unlicensed use and wireless microphones.

Baburajan K
[email protected]