T-Mobile and Sprint to form joint venture to bid in the 600MHz spectrum auction [Rumor]

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While the whole wireless world is watching and waiting on some kind of official word that T-Mobile and Sprint are planning a full-on merger, the two companies have supposedly been working on a joint venture to bid on airwaves in next year’s 600MHz spectrum auction.

The joint venture, according to Bloomberg, has been negotiated separately from the merger transaction and will go ahead even if a planned buy-out fails. WSJ adds to this speculation, claiming that Sprint and T-Mo are trying to raise $10 billion to bid on airwaves currently held by TV broadcasters.

It’s no secret that T-Mobile wants desperately to get hold of low-band spectrum. Its network has long been criticized for being unreliable, and for not being capable of getting indoors well. And that’s almost entirely down to T-Mo utilizing high frequency spectrum. Low frequency networks get through walls much easier because of the nature of the radio waves. It’s why T-Mobile bought a huge chunk of A-block spectrum from Verizon earlier this year, and it’s also why it was so persistent in seeking to change the rules for the auction next year. T-Mo wants to get its hands on as many low band airwaves as it can.

Combining with Sprint on a joint venture would certainly give the company extra clout, but I can’t imagine for one second that the other two major carriers would be best pleased. Especially after the FCC changed the auction rules earlier in the year. And although the new rules don’t make it impossible for AT&T or Verizon to grab some 600MHz action, it does restrict them to markets where they don’t already own 45MHz or more of spectrum below 1GHz.

While that’s all happening, we’re still waiting on T-Mobile to officially announce a date for when the 700MHz markets are going live. All we’ve heard so far is “end of this year/beginning of next”. Which begs the question: How many handsets will be compatible when the network is switched on? At the moment, I don’t believe any phones on the market are compatible with Magenta’s specific  700MHz  LTE network. And even if the network does go live, how many manufacturers will rush to make phones that play nice?

What do you guys make of this joint venture between Sprint and T-Mobile? Is it an attempt to make sure the two smaller (of the 4 major) carriers get as much spectrum as they need, or simply an attempt to stop Verizon and AT&T from gobbling up as much as they can?

Sources: WSJ (subs. required), Bloomberg, FW

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  • sushimane

    it would be ok in my book i guess tag teaming on the 600 MHz auction and get as much spectrum as they can get limiting the other big two from a gobbling all of it. but at the end of the day i still want them to be two separate companies. when and if softbank/sprint actually make a bid for tmobile and the fcc and the doj rejects it deal i would be a happy camper softbank/sprint loses 1 or 2 billion dollars tmobile/dt get the money and maybe dt would invest 1 billion on tmobile and 1 billion at home. crossing my finger when that happens.

  • ghulamsameer

    If the iPhone 6 and Galaxy S6/Note 4 have 700 MHz compatibility, then it’s game over.

    • maximus1901

      Except for the channel 51 exclusion zones.

      • Adrayven

        That would be why they have not deployed on 700Mhz .. they are waiting for them to vacate.. which was supposed to be by end of year / beginning of next..

        • maximus1901

          No. They will START vacating after the mid 2015 auction and, according to fcc proposal, they will have up to 39 months to vacate. So yeaaaaaaaaaah

        • philyew

          Not entirely true.

          According to the FCC presentation on their plans:

          http://wireless.fcc{dot}gov/incentiveauctions/learn-program/Broadcast_Incentive_Auction_101_slides.pdf

          “Winning ‘off air’ and ‘channel share’ bidders must vacate their channels within 3 months of receiving payment.
          Repacked stations and winning “band changing” bidders must:
          • File an application for a construction permit to make the facilities changes necessary to operate on their new channel within 3 months after the auction ends;
          • Complete construction of their new channel by a deadline of up to 36 months, set by the Media Bureau based on the unique circumstances of the station’s move;
          • Cease operation on their pre-auction channel by the conclusion of the transition period 39 months after the auction ends. ”

          Once again, the FCC seems to have left some room for interpretation with the requirement to complete construction by “a deadline of UP TO 36 months, set by the Media Bureau”. Does that mean that, in some circumstances, the Media Bureau could set a much SHORTER timescale?

        • Cam Bunton

          Seriously Phil, would love for you to write an “explaining all” article about this spectrum auction. Your knowledge on it is fantastic.

        • maximus1901

          800 MHz rebanding was scheduled to take 3 years – done by 2008 – yet it’s been 10 years and only now they’re ALLLLMOST THEEERRRRE

        • philyew

          Not sure what this has to do with the possible timelines for TM being able to start deployment using 700MHz A block spectrum.

          For those markets where channel 51 broadcasting is an issue, the key for TM is how quickly those broadcasters vacate the problematic 600MHz spectrum. Your previous message could be interpreted as implying that all of those broadcasters would have up to 39 months to vacate, at their own discretion. I am simply pointing out that, depending on the nature of individual auction transactions, some broadcasters might have as little as three months after payment to shut down transmissions. In other cases the discretion is with the Media Bureau, not the broadcaster.

          Doubtless there will be some cases where the full 39 months is required, but right now we don’t know whether that will affect a significant number of markets or not.

        • maximus1901

          That’s 3 months for those who accept payment. But for those who choose to not participate, up to 39 months. Highly variable. The 800mhz re banding seeks to demonstrate thT the fcc WILL grant endless wavers.

        • philyew

          The extensive delays in the 800Mhz re-banding exercise have involved public service entities: city administrations, police departments and school districts.

          It’s very possible that the FCC won’t extend anything like the same latitude to for-profit organizations in the 600MHz exercise – particularly if they will be receiving incentive rewards to make the changes. We’ll see.

      • http://rosarynovice.stblogs.com/ Augustine

        Licenses for band 12 will be available only where channel 51 is vacated, no?

        • maximus1901

          No. AT&T has a block license for Chicago because it bought Leap wireless

  • RefarmAllPCSnowPlease

    It’s a good idea. The 700MHz and cellular spectrum (bands 12,13,17,5) are more than enough for the remote areas. The only issue now is that the only two companies (AT&T/Verizon) that hoarded those licences have very tight control over the spectrum.

    For example: AT&T doesn’t build LTE network on rural areas where they already have UMTS coverage; Verizon has 700MHz upper C everywhere but they don’t build LTE where they don’t have a cdma coverage (They actually lie about their LTE map). That is not to mention that nobody can even roam into their LTE networks.

    If T-Mobile and Sprint tie up a team so that they can share the 600Mhz licenses, they can potentially compete in the remote areas where a slower but reliable data connection is much better than no coverage at all. In urban areas each of T-Mobile and Sprint has its own narrow low-frequency licenses already to compete with each other.

    I would suggest that they also pool their PCS licenses because separately, their licenses are inadequate to compete with Verizon and AT&T. In particular, Sprint customers can roam on T-Mobile’s UMTS voice network and the vacated specturm in Sprint can be refarmed to LTE and VoLTE than can be shared with T-Mobile customers.

    Still, some of us think that both Sprint and T-Mobile are hesitant to expand their network to rural and suburban areas.

    • http://rosarynovice.stblogs.com/ Augustine

      Indeed, it’s estimated that almost 50% of the auctioned spectrum is silent, though wholly owned by spectrum squatters.

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    • Paul

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  • Nice

    It’s about time. You’d think they would want to work together to get and share spectrum whenever possible. They are both way behind and T-Mobiles spectrum sucks indoors, even with all the great things they have been doing.

  • Adrayven

    Much prefer this to a merger. I’m fairly sure most people would prefer it.. Merging REALLY has never been necessary. It’s only needed because they don’t cross license and allow full roaming on each others networks..

    Seriously.. Wireless should be like it was with POTs when it was regulated. One public company maintained towers, spectrum and all cell providers put some in the pot for upgrades, maint, etc and competed on service and price.. Then we wouldn’t have this b!tch of a hoarding going on with spectrum just to hurt the other company crap. WE HAVE enough spectrum really, just not so each company can exclusively own it.

    That is completely, and totally, doable. We just have this thing called politics and bought politicians … that adds a bit of a tone of green dirty going on..

    • Mschmal

      Under the Telecommunications Act of 1934 that created the FCC. Airwaves/Frequencies belong to the public and the FCC is required to ensure that they are used for the public good. Of course that is interrupted to mean for the good of corporate profits.

  • JaswinderSinghJammu

    It’s definitely a great strategy for grabbing as much spectrum as possible with combined pot of money whether the merger goes through or not.

  • Paul

    Smart move on both party’s part. Even if the merger fallas apart they have access to spectrum they both need to strengthen their networks. It’s a bold move 2 smaller carriers banding together against the #1 and #2. I hope it proves fruitful.

  • tmorep

    The G3 supports the new 700mhz band. LTE band 12. It’s listed on the T-Mobile website for the specs of the phone

    • http://rosarynovice.stblogs.com/ Augustine

      I only see “LTE: 2, 4, 7, 17″ at t-mo{dot}co/1t0g1TQ

      • philyew

        Yup. LTE 2, 4, 7 and 17 in the Tech Specs document in the support site as well.

        http://support.t-mobile{dot}com/docs/DOC-11981

    • Alex Zapata

      I guess 17 and 12 are similar if you’re blind?

  • Tins

    Wonder twins activate, form of duo poly! NON 70s kids won’t get it!

    • Josh Robert Nay

      Nor will kids who haven’t seen Family Guy or Scrubs. ;)

  • Toasted_Cracker

    I’m guessing that the Note 4 will be the first device caple of the new spectrum.

  • bob90210

    The Wall Street Journal shows the subscription overlay if you directly link to the article. However, you can view the entire article if you google “Sprint, T-Mobile Look to Raise $10 Billion for Spectrum Auction” and click on the link. Of course, no one on this site looks at the sources so it doesn’t matter.

  • Matt

    I’m curious to see T-Mobile’s reaction to Verizon Wireless opening it’s LTE and XLTE network to prepaid customers. T-Mobile cannot compete on coverage so I think it will have to re-evaluate it’s prices. Verizon’s new LTE ALLSET plans due out on July 17th should really shake things up a bit.

    • TechHog

      Uh, you get LTE on T-Mobile prepaid too. Also, that “XLTE” scam cracks me up every time.

      • Paul

        what’s so scammy about Xtra LTE???? We could ALL use a lil Xtra LTE in our lives!
        Ha ha ha ha. ;)

      • MadJoe

        It is funny, but is it any worse than T-Mobile claiming HSPA as 4g? I get that HSPA+ is good, but HSPA is awful and it’s embarrassing when my phone says “4G” but the internet is not flowing (I get a mixed bag of LTE/HSPA+/HSPA/EDGE at work, so it’s a lot of fun).

        • TechHog

          That’s pretty dumb too. I wasn’t even aware that normal HSPA was still running.

        • MadJoe

          I didn’t know either until I rooted my Note 3 and set the icons for data to the international set. Then I started seeing 4G (LTE), H+ (HSPA+), H (HSPA), and E (EDGE). Confirmed the difference between H+ and H by running Speedtest a few times on each network, and the difference was night and day but both network types register on my wife’s S5 as “4G”.

        • http://www.volkswagen.de/ Quailallstar

          Welcome to the club (rooting). 4G is one big marketing bandwagon now superseded by LTE.

      • NorCalOffspring

        XLTE is just another wide-spread psychological experiment by Verizon mad scientist

  • macman37

    Although a joint venture does seem initially enticing to get the desired amount of 600MHz frequency airwaves or slightly more, I would honestly not trust or want anything to do with Sprint. Sprint is basically a desperate wireless carrier that is struggling to stay relevant and alive. Their poor management decisions is a great way to sum up my explanation. When they had the chance to buy MetroPCS, Sprint’s Board of Directors somehow convinced Dan Hesse not buy them – thus having them miss out on a huge swath of AWS spectrum that didn’t requiring much or any conversion for their CDMA network. Hell, MetroPCS was a CDMA network at that time! Now, their dumbasses realize how important AWS spectrum is for interoperability – when 1 wireless customer from Verizon, AT&T, or T-Mobile leaves that carrier and chooses Sprint – and they want to now merge with T-Mobile so they can have some access to the AWS spectrum they foolishly said goodbye to. This is definitely not a company to do any joint venture of any kind of business with. If T-Mobile is risky enough to do a joint venture with Sprint, I have 1 thing to definitely to say – These desperate self-centered idiotic bastards will turn their backs on you and stab you in the heart when they get the chance! Bid without any joint deal with Sprint and leave them to make another idiotic decision to themselves!!

    • H Nathan Harper

      One of the articles stated that T-mobile would control the joint venture.

      • macman37

        You have to realize that is Sprint’s bait for T-Mobile to foolishly base an agreement on. A sucker punch.

    • NorCalOffspring

      You the man, macman37!

  • priap1sm

    This is all great, but until they start making phones actually capable of using the 700 and 600mhz bands, it’s all kind of moot.

    • MadJoe

      It has to start somewhere.

  • matt

    Don’t merge with sprint their network sucks and is slow at least around cincinnati as I have been told.

    • brian90

      Their network is worse then Tmobile and yet they charge more to use it!

    • DirkDigg1er

      How can you cite hearsay lol?

  • they are not loyal

    say what i just read the article from Bloomberg softbank went to 6 different bank to fund the so called merger with tmobile and now they want to go to a japanese lender company to get more funding to pay for the 600 mhz spectrum. If u dont have the money for the auction sorry ur shit out luck you cant just keep on going to bank and ask for lender money yes u can pay it off over time but that’s so much debt for a company to have under their belt. i really hope the whole merger get rejected and tmobile/dt get’s the money and invest a little bit more money on tmobile. so softbank/sprint can just suffer and drop to number 4 national carrier they have a long way to go to actually have a working network.

  • get at me

    Say what I read the article on bloomberg Softbank CEO went to 6 different banks to have funds for the so called merger with t-mobile. Now for the 600 MHz auction their going to a Japanese lender company for funds to pay for it. That’s retarded if you don’t have the cash to bid on it your shit out of luck. That’s so much borrowing from multiple banks and lending company. I hope the FCC and the doj really look at this and reject it that’s so much debt. If you barely have the funds to run ur company ur gonna go bankruptcy and now they want to bring down t-mobile with them that’s just not right.

    • Ashton3002

      So does that mean tmobile is shit out of luck too? Because from my understanding they are kinda screwed just as bad. And tmobile wants a merger just as bad as sprint.

      • get at me

        T-mobile themselves aren’t the one that’s wants to merge but their parent company wants to sell them from my understanding. Yeah kinda u would say that but they been more profitable in the past two year because of the uncarrier movement. I want to say t-mobile have made good judgment on their network use hspa+21,42 unlike sprint the jump on wimax and say that its true 4g don’t get me wrong they can say whatever they want to say. Hspa+21,42 outperform them any place that sprint had wimax. So wasteful spending vs smarting thinking. They both have debt under their name but in my opinion t-mobile are more profitable then sprint is so they should have free cash flow to spend on the 600mhz. Just saying correct me if I’m wrong

        • Ashton3002

          Well to my understanding sprint can borrow more because their company is worth more than tmobiles..

        • get at me

          Yeah they can. but how many times can a company borrow money? they do have to pay it back eventually they can pay it over time but 6-7 banks for the merger if it happens and a Japanese lender company for the 600mhz auction. And plus t-mobile and sprint aren’t that big to one another from last time I remember t-mobile has 49.1 million and sprint has 53 million Sum thing million they both now have parent company sprint got Softbank and t-mobile got DT. So its a fairly even match between them they can draw in money from either parent company. but DT wants to sell t-mobile USA from what it looks like but it can just be a trick for company to buy it and get a break up fee. The current dt ceo did say roughly stated they see good opportunities with the USA brand and will provide as much as needed to be competitive in the USA brand but that’s from couple of months ago. Sorry for the rant.

    • geekygurl

      Learn 2 grammar. It’s horrendous and reading what you wrote gave me the biggest headache ever. Even if what you commented made any logical sense, the fact that your grammar and spelling is compared to the likes of a third grader makes you completely lose credibility.

      • get at me

        No one asked you to read the comment. Point blank if my comment made logical sense at all I got my opinion out. For some one to say I lost credibility I never had one it just my opinion and people get it. Even if its compared to a third grader. “Learn 2 grammar” isnt it learn how to use proper grammar? You can’t use the number 2 to substitute for the word “to” that’s childish. Take it easy and enjoy ur day there’s no reason to poke at people grammar. Its only opinions ;)

      • Jay Holm

        This is the I internet, not the 3rd grade, knock it off with your stupid, immature “grammar” bs!!!

        Oh, ooops, didn’t realize your a girl. No wonder why your so snotty!

    • calvin200

      Companies finance things. That’s what they do. They need to, it’s part of business.

  • DirkDigg1er

    Son is always making a deal.

  • Hurlamania

    This is more reason why they don’t need to merge, they can work together being 2 separate companies

  • Juan Pablo Darquea

    Well my HTC one gets lte almost everywere now even indoors that’s a good sign a year back was only outdoors here in florida

    • DirkDigg1er

      Thank god you live in a warm state. One year of having to go outside for coverage sounds painful.