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T-Mobile Stands to Gain Most At Next Airwave Auction

October 16, 2015 - Written By Fernando Bonilla

The nation’s third-largest carrier, T-Mobile, is looking forward to next year’s spectrum auction, held by the Federal Communications Commission. The carrier is looking to expand its wireless offering by taking advantage of the available low-band airwaves.

The FCC regularly holds spectrum auctions, where the agency offers licenses to airwaves that allow carriers to form networks and provide voice, text, and data services. Generally, the more spectrum a carrier has, the better off their networks will be. The industry’s two largest players, Verizon and AT&T, have historically been able to clean up at the auctions and gain vast amounts of spectrum. T-Mobile and fourth place carrier Sprint have been left with lesser resources and their networks haven’t been able to cover every area the larger two can operate in.

With that in mind, T-Mobile, along with Sprint and a group of smaller carriers, requested the FCC reserve a special area of spectrum neither Verizon nor AT&T could place bids for. Since the two largest companies would be out of the picture, T-Mobile and Sprint would benefit from greater access to airwaves. It took two years, but in the next auction the FCC has set aside low-band spectrum for the industry’s smaller carriers. Low-band airwaves are especially valuable because they allow for services to travel longer distances and can serve as the base for improved networks. In the past, low-band spectrum has been fair game for any carrier, and as a result Verizon and AT&T together hold a massive 70% of this specific band. Much of their 4G LTE networks have these low-band airwaves to thank for their success.

T-Mobile sees an opportunity for growth, thanks to the reserve for their network and others’. However, the Uncarrier may benefit more than anticipated. Sprint recently announced they would not be participating in the auction. Google has been experimenting in wireless service with Fiber and Project Fi, but the tech giant will likely sit out the auction. Cable companies seem uninterested though their official stance is unclear. Regional carriers are also uncommitted to purchasing low-band spectrum, especially considering the airwaves won’t be available up to 39 months from the date of the auction, and it’s doubtful they will benefit as much as other players might. As others who initially lobbied the FCC for the reserve appear to have dropped out of the running, T-Mobile looks to gain potentially massive amounts of airwave licenses.

Without too much competition, T-Mobile may gain new low-band spectrum and allow its networks to grow outside cities. With more rural areas accessible to T-Mobile, the carrier may attract new subscribers in the future. Even if at present your area receives spotty T-Mobile coverage, the networks are sure to improve in many places. T-Mobile’s senior vice president of government affairs, Kathleen Ham, admitted the company’s expectations for acquiring substantial spectrum, saying “We are banking on that. It’s that important.”