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