According to fresh data from spectrum-tracking company AllNet Insights & Analytics, T-Mobile has acquired more than 200 of the 2.5GHz spectrum licenses the FCC freed up for sale roughly two years ago.

That's noteworthy considering T-Mobile's speedy midband 5G network is built on roughly 2,000 such licenses. As previously reported by Light Reading, T-Mobile holds long-term leases on most of those 2.5GHz spectrum licenses, but it does not own them outright. Instead, most of the licenses are actually owned by educational institutions ranging from universities to high schools to religious organizations.

An FCC ruling that went into effect in 2020 paved the way for those educational institutions to sell their licenses; previously they could not do so. And, according to AllNet's findings, many have taken advantage of the FCC's new rules in order to sell their 2.5GHz licenses. Most – but not all – sold their licenses to T-Mobile.

And the terms of those sales are being kept tightly under wraps.

Freedom of information

The FCC's new 2.5GHz ownership rules create an interesting situation for T-Mobile. The company is building its midband 5G network using leases on those 2.5GHz licenses because, under the old FCC rules, the company was not allowed to own the licenses. Thus, T-Mobile was forced to be a long-term spectrum renter. But the FCC's new rules have paved the way for the company to become a spectrum owner.

Figure 1: T-Mobile touts extensive 2.5GHz coverage.
(Source: T-Mobile)

According to AllNet, there were a total of around 300 spectrum license transactions in the 2.5GHz band since the FCC's new rules went into effect two years ago. T-Mobile accounted for around 200 of those, purchasing licenses covering territory all over the country. The remainder of those license transactions appear to mainly involve smaller telecom operators such as Mark Twain Communications Company and Aeronet Wireless.

Interestingly, it's difficult to get details on the transactions, despite the fact that many of the sellers are public entities. For example, the Grapeland Independent School District is a public school district based in Grapeland, Texas. According to AllNet, it sold its 2.5GHz license to T-Mobile. School officials did not respond to questions from Light Reading about the transaction, and a public records request has not yet been answered.

Similar questions and requests made by Light Reading to other public institutions all over the country have also remained unanswered. Executives active in the space – who asked to remain anonymous – told Light Reading that most such records requests either go unanswered or are highly redacted.

That's likely in part a response to T-Mobile's efforts to keep its spectrum purchases out of the public eye. According to a detailed report on the topic by FierceWireless, T-Mobile considers such transactions "trade secrets" and warns that "disclosure of this confidential information would affect T-Mobile's standing in extremely competitive spectrum negotiations."

T-Mobile did not respond to an offer to comment on AllNet's data.

Buying T-Mobile's spectrum

One interesting element that stems from the FCC's new 2.5GHz rules is the tantalizing possibility for other companies to purchase a license that T-Mobile is leasing, effectively becoming the company's spectrum landlord. Indeed, investment firm WCO Spectrum has been attempting to do just that. As Light Reading previously reported, T-Mobile has worked to block such efforts.

However, as noted by AllNet, at least one company has managed to snatch a license out from under T-Mobile: SoniqWave.

"We're fascinated with what you can do with 2.5GHz," John Ogren, COO of SoniqWave, told Light Reading.

SoniqWave purchased a 2.5GHz license covering South Beach, Miami, in 2021. It's a license that T-Mobile is currently leasing for use in its 5G network. Ogren confirmed to Light Reading that SoniqWave is maintaining a month-to-month lease with T-Mobile for the license until SoniqWave decides what it will do with the spectrum. He declined to provide the financial details of that month-to-month lease.

However, Ogren said that SoniqWave doesn't want to become T-Mobile's spectrum landlord, like WCO hopes to do. "We were not doing it to buy spectrum under T-Mobile and then lease it back to them," he said.

Instead, Ogren said SoniqWave has been purchasing 2.5GHz licenses around the country for applications ranging from fixed wireless Internet services to private wireless networking offerings.

Indeed, SoniqWave sports a front office of longtime wireless networking executives with lengthy experience in the 2.5GHz band. Ogren himself sold a batch of 2.5GHz licenses to Sprint before the company was acquired by T-Mobile.

Today, SoniqWave touts extensive 2.5GHz license holdings in ten states across 30 markets, and Ogren said the company expects to expand those holdings by participating in the FCC's upcoming auction of 2.5GHz licenses in rural areas, an event scheduled for July.

"Soniqwave plans to be very active in that," he said.

Ogren said SoniqWave has often bid against T-Mobile in its pursuit of 2.5GHz licenses. He said that T-Mobile typically has the "right of first refusal" in such negotiations, due to its leases, and in the past T-Mobile has used that right to purchase licenses that SoniqWave has put bids on. "And that was fine, I was OK with that, because in the end it worked out well for the schools and the educators," Ogren said.

Auction rules

T-Mobile's 2.5GHz license purchases have become a central issue in the FCC's upcoming 2.5GHz spectrum auction, scheduled for July.

Both AT&T and Verizon have been urging the FCC to require T-Mobile to disclose the terms of its leases. After all, they argue, that information is critical in determining how much the licenses might be worth.

"In many cases, whether and when the winner could obtain rights to incumbent licenses will depend on lease terms such as the duration of the leases, whether there are rights of first refusal to renew the lease or purchase the incumbent's licenses, and lease termination provisions," AT&T recently told the FCC, adding that T-Mobile held leases on 2,046 of the 2,193 total 2.5GHz licenses in the market in 2019. "At this time, T-Mobile is the only likely bidder with information about the nature and extent of such lease provisions. In other words, only T-Mobile knows whether and when rights to the incumbent licenses within the overlay areas and broader regions will be available."

T-Mobile, unsurprisingly, disagrees.

It's unclear how the FCC might ultimately rule on the topic. The agency is in the midst of finalizing its rules for the auction. T-Mobile is expected to bid heavily in the auction in order to flesh out its 2.5GHz coverage area.

The financial analysts at New Street Research wrote that there is a chance the FCC might require T-Mobile to disclose the terms of its 2.5GHz leases. "Generally the auction staff favors all parties having equal access to relevant information about the spectrum being auctioned," they wrote in a recent note to investors.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano