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Sprint Will Follow T-Mobile and Bow Out at the US Government Spectrum Auction in January

November 13, 2013 - Written By Cory McNutt

It looks like Sprint is following T-Mobile’s lead in announcing that it will not try to bid on the H-Block airwaves that the U.S. Government will be auctioning off in January 2014.  According to Reuters, BTIG analyst, Walter Piecyk, said he does not expect AT&T or Verizon Wireless to bid for the spectrum – the U.S. Government set November 15 as the deadline to make their intentions known via an application for the auction.  Reuters said that AT&T declined to comment and Verizon Wireless did not respond to several attempts for comment.

Sprint had already purchased a huge amount of spectrum in July when it took over Clearwire Corporation, but analysts still expected that they would bid for the H-Block Spectrum, because it is adjacent to the spectrum holdings that Sprint already owns.

This is great news for satellite TV provider, Dish Network, as it potentially leaves them as the only bidder – shares for Dish Network rose 1.6-percent to $51.19 on Nasdaq.  It is the first time that Dish Network’s stock price has crossed the $50 mark since 2000.  Without having to face any rival bidders, their bid is almost certain to be accepted.

Dish Network already told the Federal Communications Commission (FCC) that it would bid a $1.5 billion reserve at the auction, providing that the FCC is willing to grant certain waivers and conditions regarding their existing spectrum licenses, which is not an unusual request.  If Dish Network wins the auction with their $1.5 billion base bid, according to Piecyk that would be about half the amount of recent transactions buying spectrum – it could be a big coup for Dish Network.

For the past year, Dish network investors have been wondering what the company would do with its existing wireless airwaves – one such option would be to partner up with one of its rivals, such as Sprint or T-Mobile.  If Dish Network does purchase the spectrum, it may force their hand to the stockholders as to what exactly their intentions are regarding the spectrum usage.

Sprint is not in very good shape, as they continue to hemorrhage both customers and income compared to the other networks.  They are still late to the party with their roll out of their 4G LTE network, although say they are on track to hit 200 million POPs by the end of the year.  Japanese Softbank acquired a 78-percent share of Sprint, so many things are happening at the third largest U.S. Carrier.

Let us know in the Comments or on Google+ if you are with Sprint and whether you are going to stay or leave.