Are utilities eyeing T-Mobile's 800MHz spectrum?

T-Mobile is in the midst of selling off a nationwide chunk of its 800MHz holdings. That process has sparked interest among utilities, potentially slowing spectrum sales by other companies.

Mike Dano, Editorial Director, 5G & Mobile Strategies

July 9, 2024

4 Min Read
power utility poles and computer readout

Bluewater Wireless is selling its 600MHz spectrum to US utility companies. But so far the company isn't finding much interest.

That's because the utilities are waiting to see what happens with T-Mobile's 800MHz spectrum auction before they decide how to move forward with their plans for private wireless networking, according to a representative from Bluewater Wireless who declined to be named. Among utilities, private wireless networks typically run on lowband spectrum like 600MHz, 800MHz or 900MHz because such spectrum can cover wide geographic areas.

"The utilities recognize that they need a lowband private network," the Bluewater Wireless representative told Light Reading.

Fronted by longtime wireless executive Charlie Townsend, Bluewater was one of the biggest bidders in the FCC's 600MHz spectrum auction in 2017 with more than $500 million in winning bids. Today, the company owns 600MHz spectrum in roughly two dozen of the biggest cities in the US.

Earlier this year, Bluewater agreed to sell $27 million worth of its spectrum holdings to Memphis Light, Gas and Water (MLGW). The utility plans to build a private wireless network with that spectrum for grid monitoring and other applications.

But other utilities haven't yet followed suit.

For its part, T-Mobile said it will finish auctioning a chunk of nationwide 800MHz spectrum sometime this fall. The company has already identified engineering giant Burns & McDonnell as a potential buyer of its 800MHz holdings.

In a court filing last year, Burns & McDonnell said it could purchase the spectrum in order to sell it to its utility customers and others. However, it's not clear whether the engineering firm will cough up T-Mobile's $3.6 billion opening bid.

The Anterix angle

T-Mobile's 800MHz spectrum auction is also important to Anterix, which is specifically focused on selling or leasing its 900MHz spectrum holdings to utility companies.

Already utilities including Ameren, Evergy, San Diego Gas & Electric and Xcel have inked 900MHz spectrum agreements with Anterix. And Anterix officials said the company continues to receive interest from utilities, despite T-Mobile's ongoing auction.

"I am confident that the 900MHz opportunity for utilities goes well beyond just a spectrum offering," Ryan Gerbrandt, Anterix's chief operating officer, said in a statement to Light Reading. "While utilities are always going to investigate available spectrum, the 900MHz offering has become a very compelling choice in an industry where compatibility and collaboration is essential."

Anterix has been working to build an equipment and services ecosystem around its 900MHz spectrum licenses in order to make them more palatable to risk-averse utility companies. And the strategy appears to be gaining steam.

Anterix recently signed its largest deal to date, selling 6MHz of its 900MHz spectrum to Texan utility Oncor for a total of $102.5 million. Oncor provides electricity to around 13 million people using 143,000 circuit miles of transmission and distribution lines.

According to the financial analysts from B. Riley Securities, the deal puts Anterix well ahead of its goal of $200 million in new deals in its current fiscal year.

T-Mobile's auction process

The story of T-Mobile's 800MHz auction starts with its purchase of Sprint, which closed in 2020. To get that deal approved, the company inked a complex agreement with EchoStar's Dish Network that regulators hoped would position Dish to take the place of Sprint as a fourth nationwide wireless network operator in the US. As part of that agreement, T-Mobile agreed to give Dish roughly three years to purchase a 13.5MHz chunk of spectrum in the 800MHz band.

However, Dish's business is now careening toward bankruptcy, and the company has signaled that it probably won't be able to raise the funds necessary to buy T-Mobile's 800MHz licenses.

As a result, T-Mobile is moving forward with an auction of that spectrum.

"We have interested parties. We have nonbinding indications of interest," T-Mobile CEO Mike Sievert said in April, according to Seeking Alpha. "So stay tuned."

According to the financial analysts at TD Cowen, AT&T and Verizon are among the most likely buyers of the 800MHz spectrum. However, both companies are struggling to shore up their finances and may not be able to come up with T-Mobile's $3.6 billion auction reserve.

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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