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T-Mobile, Dish & Comcast Big Winners in $19.8B 600MHz Auction

Dan Jones
4/13/2017
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T-Mobile has made good on its promise to be the big winner in the 600Mhz low-band spectrum auction spending nearly $8 billion to grab what the operator says is 45% of the total TV spectrum on offer.

The Federal Communications Commission (FCC) announced the results of the 600MHz "Incentive Auction" on Thursday afternoon, after several rounds of auctions that initially failed to reach the totals that analog TV broadcasters were asking for to relinquish the spectrum. (See FCC's 600MHz Auction Hits $10B+ in First Week and FCC's 600MHz Auction Flops Again.)

The auction raised $19.8 billion in total. This is far less than the previous $45 billion AWS-3 auction results in January 2015. (See Hey Big Spenders! AT&T, Dish & VZ Splash Cash on Spectrum.)

"Little old T-Mobile walked away with more than any other company, 45% of all the spectrum auctioned," said T-Mobile's CEO, John Legere, in a video released on Thursday. That's an average of 31MHz of the low-band spectrum nationwide.

T-Mobile US Inc. was the leading major mobile service provider bidder, putting up $7.99 billion for nationwide low-band licenses. AT&T Inc. (NYSE: T) spent just $910.2 million. Verizon Communications Inc. (NYSE: VZ) is listed as not bidding a cent, and Sprint Corp. (NYSE: S) had already said it had enough spectrum and wouldn't participate. (See T-Mobile CEO: We'll be a 600MHz Auction Winner.)

Cable and satellite TV providers were among the other big spenders. Comcast Corp. (Nasdaq: CMCSA, CMCSK) bid $1.72 billion and Dish Network LLC (Nasdaq: DISH) splashed $6.21 billion.

T-Mobile says that with the auction wins T-Mobile will be able to use the additional 600MHz spectrum to improve coverage and range on its network because lower-band radio waves travel further and penetrate walls better. This is a strategy that the operator has already been pursuing opportunistically through 600MHz spectrum buyouts and swaps.

"We expect to put this new spectrum to use for customers later this year," Legere claimed, saying 1 million square miles will be cleared for use by the end of 2017.

See the full video below:

So why did T-Mobile walk away with the most 600MHz spectrum? It is because AT&T and Verizon already operate their LTE networks on 700MHz.

As former Verizon CFO Fran Shammo said in October 2015, 600MHz and 700MHz "don't play well together," with interference concerns being paramount between the nearby bands.

AT&T and Verizon also appear to be more focused on adding high-band millimeter wave spectrum for future, gigabit 5G services rather than additional spectrum for 4G. AT&T announced that it would shell out $1.6 billion for Straight Path. (See AT&T to Flash $1.6B for Straight Path 5G Spectrum.)

— Dan Jones, Mobile Editor, Light Reading

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DanJones
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DanJones,
User Rank: Blogger
4/17/2017 | 11:53:24 AM
Re: Verizon/Dish
The low-band wins by Dish don't make much sense as a bandwidth bait for buyers.
NorthwestTony
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NorthwestTony,
User Rank: Light Beer
4/14/2017 | 6:37:06 PM
Re: Verizon/Dish
@Jim_Jackson - I tend to agree.  Low band spectrum is for coverage, which Verizon has plenty of.  Mid-band is for capacity, which Verizon needs and was prepared to pay handsomely for in the AWS-3 auction.  Dish has a sackload of unused mid-band spectrum that is exactly what Verizon wants.  But I'm not sure why Dish just bought a nationwide 5+5 nationwide footprint of 600MHz.  Maybe Charlie plans to sell the mid-band to Verizon and the 600MHz to someone who doesn't have nationwide coverage, maybe Comcast or Charter...or Alphabet...  It's fun to speculate!
DanJones
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DanJones,
User Rank: Blogger
4/13/2017 | 11:51:49 PM
Re: Verizon/Dish
You could be right!
Jim_Jackson
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Jim_Jackson,
User Rank: Light Weight
4/13/2017 | 9:01:56 PM
Verizon/Dish
It's hard to see Verizon not buying Dish.  Sprint has too much spectrum so they can't buy them.  AT&T can't buy them - too many cable subscribers.  I don't see Tmobile going in that direction.
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