T-Mobile’s odds of success at 600MHz auction growing as some smaller carriers become hesitant to take part

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We already know that T-Mobile is planning to go big during next year’s 600MHz spectrum auction. But it’s starting to look like there may not even be a ton of competition against T-Mo, at least not for the reserve spectrum.

We already know that Sprint isn’t planning to take part in the auction because it feels that its current spectrum holdings are enough. Now some smaller carriers are expressing disinterest in the reserve spectrum, too. Pat Riordan, CEO of Wisconsin carrier Cellcom, played down the auction at a conference last week. Riordan cited the fact that to buy spectrum would require Cellcom to tie up millions of dollars for several years as it waits for broadcasters to move off the 600MHz airwaves before it can put them to use. Riordan also explained that the reserve — which sets aside up to 30MHz in a given market just for smaller carriers — doesn’t cover every market, and so in some areas smaller carriers like Cellcom will be competing with AT&T and Verizon. “We are realizing now that the reserve doesn’t do us any good,” Riordan said.

It appears as though not all small carriers at which the reserve is targeted at share Riordan’s concerns, though. Steve Berry, head of the Competitive Carrier Association (a group meant to help smaller carriers grow and compete), has said that a large majority of the more than 100 members of the CCA has indicated that they to take part in the auction. However, Berry said that some operators aren’t totally on board.

T-Mobile CFO Braxton Carter has indicated that Magenta could have up to $10 billion to spend in this 600MHz auction if needed. Kathleen Ham, T-Mobile VP of Federal Regulatory Affairs, echoed the importance of T-Mo doing well in the auction, saying that the carrier is banking on getting all of the spectrum that it needs from the auction. “It’s that important.” Obviously we won’t know how things will go down in the auction until it actually takes place next year, but with other carriers backing away from the auction or expressing doubts about it and T-Mobile brandishing a pile of cash, it’s looking like the auction could go pretty well for Team Magenta.

The 600MHz auction is currently slated to be held in March 2016.

Source: CNET

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  • gadget_hero

    I keep going back an forth if 600MHz would be better or just buying Leap and Cspire’s A block and/or buying US Cellular?

    • Bradley Karas

      US cell…they pretty much own the entire Midwest in a lot of weak areas with T mobile to include Chicago area which would be a huge gain…Milwaukee needs it…they have zero presence in Iowa

      • gadget_hero

        Yeah USCC, Leap spectrum and Cspire would give them nationwide A block 700MHz which can be deployed NOW rather than waiting for TV stuff to move and new equipment to be made for the 600MHz bands. Not to mention that would be another 4.76 million magenta customers! Which would get them to 51-ish percent of AT&T’s sub count and level the playing field network wise!

        • Cam Fas

          Agreed they should go for as much 700 and 600 MHz as possible I live in Las Vegas and have no low band spectrum it’s nice that we do have a 20+20 wide band lte network here but we need that to be carrier aggragated with that the service has gotten very good here but we need that service to go thru the walls better. And besides 700 can be used now and with my new band 12 phone it would suck to have to wait up to 5 years to have proper penetration when they advertise it now that being said 700 now and 600 later works because the 700mhz capacity is pretty sad at the moment.

        • a d00d

          You guys haven’t been paying attention: USCC sold Chicago (most of Illinois, actually) to Sprint a while back:

          http://www.fiercewireless.com/story/us-cellular-agrees-sell-non-core-towers-159m/2014-12-11

          In fact, based on what I read in that article, I’m surprised the entire company hasn’t gone on sale yet.

          I can think of a few companies that TMo could gobble up if they were serious about rural coverage, but I strongly suspect that’s all talk since the big carriers don’t seem interested in providing much rural internet coverage even with help from the Universal Service Fund, which was established for that purpose and more.

        • dtam

          every time I’ve been to Vegas my service has been great inside the casinos. I assume they all have microcells in each, how is it in other buildings?

        • Cam Fas

          They do have many microcells even at the airport where I work sometimes underoground I have service in assuming it’s because of the microcells the only reason I’d like low band is for when I’m home I understand they have wifi calling but I hover between 1-3 bars at home and wifi calling doesn’t always work correctly. And I have the T-Mobile wifi router and my home network is 125mbs down so it is just that the tech isn’t perfect yet

        • dtam

          buying them would probably cost more. instead, have better roaming agreements with them

      • JLV90

        T-mobile probably won’t expand into Iowa cause iWireless controls their spectrum there.

        • Bradley Karas

          Negative! US cell owns band 12 in that state

        • JLV90

          I didn’t mean band 12 I meant all the spectrum T-mobile uses is all iWireless. If iWireless doesn’t expand I doubt T-mobile will want to.

    • lynyrd65

      Buy USCC after the auction so they can bid in the spectrum reserve in USCC areas.

      If they buy USCC first they would have to bid against Verizon and or AT&T in the newly acquired areas for 600.

      • Fabian Cortez

        Silly. Everyone knows Sprint will buy U.S. Cellular and participate in the auction (the entire reserve) and densify its network and purchase T-Mobile.

  • David

    If Tmobile can buy national wide 600mhz spectrum, it’s gonna be a killer network.
    FCC is kinda of responsible for fragmenting the spectrum for putting them up for auction. They should simply price them accordingly and sell. That way, each carrier can have consistent and continuous blocks of spectrum to use.
    Now if you look at the spectrum map, it’s divided so badly into thousands of little pieces.

    • Durandal_1707

      I’m not sure they’ll go for nationwide. They may leave out areas where they already have 700 A block and just concentrate on filling in the holes. The important thing is that they have *some* kind of low-band spectrum everywhere.

      • Cam Fas

        True but too truly future proof a nationwide 600mhz will help with Carrier aggregation and since the vast majority of 700mhz is only on 5+5 chunks it would certainly help with capacity by the time they can officially use the spectrum

        • Durandal_1707

          Sure it’d be nice, but we have to be realistic. T-Mobile doesn’t have the kind of cash that Verizon and AT&T have.

          Anyway, 5+5 should be okay, because low-band has two purposes: 1) to fill in coverage holes in cities that are otherwise already well-covered by AWS and/or PCS, and 2) to provide coverage in rural areas where there aren’t many people, so your need for capacity isn’t that great.

          Low-band isn’t usually the front lines; it’s the backup. Mid-band provides faster data speeds, so it’ll usually be picked up by the phone instead if it’s available.

        • dtam

          big red and death star built their lte networks on low band.

          I think tmo should get 5+5 of lowband in very rural areas, 10+10 in medium markets and a minimum of 15+15 in major metro markets

        • Cam Fas

          You hit the nail on the head not only did they build networks on low band they did it with double the subscribers

        • Joe

          10X10 should also be sufficient for large markets as it will still only be a back up. And 10×10 back up is some solid backup.

        • dtam

          maybe for now but you also want to future proof. considering there are no other auctions in the foreseeable future, you’d want tmo to try to get as much as they can in places where they might have capacity issues.

      • SirStephenH

        Their current plan is to fill in where they don’t already have band 12, then add capacity to highly populated areas, and then go from there. It sounds like they’ll only go for a nationwide license if the price is right which is a pity.

  • archerian

    The biggest factor in the odds for success are not whether other competitors take part or not but how much and at what rate the forward auction gives spectrum from the broadcasters to the FCC. If the base price is high, it won’t matter if tmobile is the only participant as they will still need to meet the floor pricing plus FCC expenses

  • jay

    I do not know anything about spectrum other than lower spectrum goes further from tower with better building penetration and higher seems to be better for high speed. I just came from Sprint, they worked for me but the perks of what you get from T-Mobile blew them away. Along with the speed. But my question is with the 600mhz does that get its own band like the 700mhz did?

    • Mike Palomba

      Yes it does and currently no phones support it. In the future when they begin using the band, you’ll have to buy a new phone that supports it

    • Fabian Cortez

      T-Mobile provides more value than Sprint? Say it isn’t so.

      ;)

      • jay

        And I know that I was a Sprint faithful customer, but it’s true as far as what you get T-Mobile gives more. Having said that, sprints coverage is better in Sussex county. Question. I have iPhone 6s, is there an app or something I can do to see what band I’m on?

        • Fabian Cortez

          *3001#12345#*

        • jay

          Thank you, I googled it and figured it out but thanks for your help

        • Fabian Cortez

          Sorry for the late reply and you’re welcome.

  • Acdc1a

    This reinforces what I’ve said for years. If the T-Mobile network suits you now, go ahead and jump on board because it will only get better. While I have noticed some LTE speed drop-off, it’s still faster than my home and office connections with Comcast.

  • esc0

    So will customers be forced to buy a new phone just to take advantage of this?

    My money tree in the backyard isn’t growing as fast as I would like it to.

    • SirStephenH

      Yes. No current phones support 600Mhz and they probably won’t for at least another couple of years.

    • that_guy

      Whaaaaat you have a money tree?

    • Stefan Naumowicz

      This spectrum won’t be live until 2019. Unless you use your phones for 5 years it shouldn’t be a problem

    • Ky

      Obviously not “forced”. What you have will continue to work on the same spectrum as so today.

      But common sense says you will be buying new phones in the future that will take advantage of these new bands in the future. No different than the Band 12 LTE rollout.

    • gmo8492

      Will you keep the same phone for 5 years? If you follow a 2 year upgrade cycle then the next phone after 600mhz launched will support it. Any newer phone you buy from T-Mobile today will support band 12 and they plan on buying more 700mhz licenses to strengthen their footprint across the U.S. according to Braxton Carter.

    • Jack Hu

      The only thing that forces is yourself. If you can resist to upgrade for more.

    • TaylorW86

      Yes, that’s how mobile technology works. If T-Mobile is spending billions to improve your network, it’s not unreasonable for you to upgrade your phone every few years to take advantage of it.

    • JLV90

      Considering the spectrum can’t be put to use till 2020 you have 5 years to save up your money.

  • Fabian Cortez

    A fully reciprocal LTE agreement is mostly like occurring with T-Mobile and U.S. Cellular.