Analysts: 2.5GHz Spectrum Important in Sprint/T-Mobile Talks

Sprint and T-Mobile are big topics in the merger and acquisition world right now, and according to Wells Fargo Securities, they believe that the undervaluation of Sprint's existing 2.5GHz spectrum could be an important piece for the two companies merging together. Sprint, who bought Clearwire a few years ago, inherited a large chunk of 2.5GHz spectrum in that deal. The company has been using it in their existing 4G LTE network, with carrier aggregation to offer up better speeds and better coverage with the 800MHz spectrum in their Nextel deal from the early 2000s. That 2.5GHz spectrum has been massively undervalued, and it's going to be a big part of 5G, which is what could have T-Mobile's attention.

Where analysts believe that T-Mobile would be the one to purchase Sprint, the company's 2.5GHz portfolio is going to be a big topic. Especially since T-Mobile is working on its 5G network right now, and have already picked up a large chunk of 600MHz spectrum, which would work well with Sprint's existing 800MHz spectrum and their 2.5GHz through carrier aggregation. Currently, Sprint owns more high-band spectrum than any other US carrier, which is a big deal, especially with 5G right around the corner. Carriers like Verizon and AT&T have been buying up smaller carriers that have a decent amount of high-band spectrum (like the 35 to 40GHz spectrum) to work with their existing coverage. High-band spectrum is important because it gives users more bandwidth, while low-band is good for more coverage. And if you use the two together, that's essentially what 5G is going to be.

It's important to remember that this is all based on what analysts think will happen. And that this is not concrete, nor what either Sprint or T-Mobile has said. That means you'll want to take this all with a grain of salt for now. With more news coming out that the two companies are talking about a merger, it's possible that we could see a deal struck between the two in the next few months. After all, they are basically continuing the talks from a few years ago, but perhaps switching positions - since T-Mobile is now the larger company.

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