T-Mobile is seeking FCC approval to conduct extensive tests of 5G transmissions in C-band spectrum. The development further underscores analysts' belief that T-Mobile could spend billions of dollars purchasing C-band spectrum in the FCC's C-band auction later this year.
T-Mobile isn't the only wireless network operator with C-band ambitions. Verizon recently requested permission to conduct a second set of C-band tests along the California coast with equipment from Samsung and Ericsson.
In its request to the FCC, T-Mobile said it wants to test 5G across 100MHz in the lower portion of the C-band with equipment from unnamed suppliers. The operator said the tests "will permit T-Mobile to begin to assess, in cooperation with equipment manufacturers, how to best evaluate the use of C-band spectrum for Fifth Generation New Radio (5G NR) operations."
T-Mobile is looking to conduct C-band tests in Houston, Phoenix, Brooklyn, Las Vegas and Belleview, Washington, where its corporate headquarters are located.
The tests come as little surprise. T-Mobile has sought permission to conduct tests in a variety of spectrum bands, and all of the big wireless network operators are expected to spend billions of dollars in the FCC's upcoming C-band auction. The event is expected to generate roughly $50 billion in total bids – a record amount for a US spectrum auction.
T-Mobile, however, may be forced to dial down its interest in spectrum due to its plans to purchase the wireless operations of Shentel. T-Mobile has announced its intention to purchase the business, but T-Mobile and Shentel are still bickering over the price tag for the transaction.
The Wall Street analysts at New Street Research recently speculated that T-Mobile could ultimately pay roughly $2 billion to acquire Shentel's wireless operations, though they note that amount could be lower "given that Shentel doesn't own any spectrum and operates under the T-Mobile brand."
The New Street analysts wrote to investors this week that T-Mobile's efforts to purchase Shentel could cut into the money T-Mobile's parent Deutsche Telekom has earmarked for US spectrum acquisitions.
"We had originally assumed T-Mobile would spend $10.4BN in the CBRS and C-band auctions, with the threshold set by our view of where DT would likely want to limit its leverage to stay on the right side of the ratings agencies," the analysts wrote, explaining that they're changing that estimate due to the expected T-Mobile/Shentel transaction. "Taking into consideration the acquired EBITDA [earnings before interest, taxes, depreciation, and amortization], we are lowering our assumption for spectrum investment by $10.4BN to $9.3BN."
Meanwhile, Verizon has begun to fret about T-Mobile's already sizable spectrum war chest. As reported by FierceWireless, Verizon is asking the FCC to prevent T-Mobile from leasing additional 600MHz spectrum, citing the "competitive harms" of T-Mobile's massive spectrum position.
That's an ironic position considering T-Mobile had urged the FCC to design C-band auction rules to prevent a single C-Band auction participant from purchasing more than a third of the total available spectrum up for bid. The FCC opted to reject that proposal, and as a result many analysts expect Verizon to dominate the C-band auction.