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Sprint Says It May Not Bid At Next Year’s 600 MHz Auctions

May 20, 2015 - Written By Kishalaya Kundu

Sprint Corporation recently tied up with competitors T-Mobile and C Spire Wireless along with Dish Network and a bunch of public policy and special interest groups to pressurize the FCC to formulate regulations for the upcoming 600 MHz incentive auctions that they claim, will help smaller carriers level the playing field against AT&T and Verizon Wireless thereby increasing competition. However, it seems as though Sprint has had a change of heart and is now not even sure they want to take part in the said auctions. The company’s CFO Mr. Joe Euteneuer said on Tuesday, that while Sprint is still reasonably interested in the auctions slated to be held early next year, it does not feel obligated to spend big bucks for a slice of the coveted low-band spectrum, known for its ability to penetrate buildings easier than higher frequency bands. Mr. Euteneuer was speaking at the Global Technology, Media and Telecom Conference organized by J.P. Morgan Chase. He also clarified that the Sprint of today is vastly different from what the company was a few years ago, when the carrier might have found it impossible not to bid during next year’s auctions.

Given all the wrangling, lobbying and posturing that have been going on unabated in the run-up to the auctions, the latest reports that Sprint does not even consider it imperative to take part in the auctions, might seem fairly odd to many observers. Mr. Euteneuer’s reasoning however, is that Sprint has been noticing perceptible improvements in its network by using the 800 MHz and 2500 MHz spectrum it already owns, for deployment of its LTE services. He backed up his argument by pointing out that the company is seeing fewer customers complaining about network reception and call-drop issues, something which was a major problem when it was undergoing a complete overhaul and restructuring of its network a while back. Mr. Euteneuer also credited this qualitative enhancement of Sprint’s network for witnessing a much lower postpaid churn of 1.84 percent in Q1, 2015 compared to 2.3 percent in Q4, 2014. He also clarified that Sprint expects to complete deployment of its 800 MHz LTE network for the most part, by the end of this year, while also rolling out its TD-LTE services on the 2.5 GHz spectrum to increase capacity.

This combination of higher and lower frequency bands allow wireless carriers better balance the load factor on their networks depending on demand. This is so, because, higher frequency bands can carry more data and travel longer because of their shorter wavelength, meaning more coverage and hence, less towers; whereas lower frequency bands are better at holding signals inside buildings, but are less capable of carrying vast amounts of data effectively.