How T-Mobile Can Take Advantage Of Next Year’s Wireless Auction

There is a government auction of wireless spectrum scheduled for 2016, and T-Mobile may have found itself in a very unique position to take advantage of it. For the last couple of years, the wireless carrier, as well as fellow network provider Sprint and other regional operators, were lobbying the Federal Communications Commission (FCC) to reserve some spectrum for smaller players (i.e. wireless carriers not named Verizon Wireless or AT&T). For those not in the know, spectrum refers to the radio airwaves used by networks to transmit voice calls, text messages, and video content. With that reserve in place, T-Mobile may be the only wireless carrier still interested.

In September, Sprint had already announced its intention of withdrawing its participation of next year’s auction, and some regional operators now seem not too eager to join in either. As for Google, satellite TV service provider Dish Network, and other cable TV operators, it is no longer clear if they will be participating, too.

Needless to say, this recent turn of events is completely unexpected, and it could shake up the wireless industry by granting operators with more access to low band spectrum, which can cover broader distances and even enhance in-building network coverage. Verizon Wireless and AT&T currently hold over 70 percent of the low band spectrum, using it to set up their respective 4G LTE networks. With other participants backing out, T-Mobile may have found itself a clear path to taking some of the coveted low band spectrum.

The last auction by the FCC was held in January early this year, and Verizon Wireless, AT&T, and Dish TV came out as the clear winners. Next year, the reserved spectrum should attract lesser players to participate, but on the contrary, many are reluctant to join. One factor is that it could take years for wireless carriers to make use of the spectrum because some of them are still owned by broadcasters who still have 39 months to vacate the airwaves, which means that carriers can only start taking advantage of them by 2020 at the earliest.

But where does T-Mobile feature in all of this? Industry leaders Verizon Wireless and AT&T are not allowed to touch the reserve spectrum, especially in markets where they already control much of the low band spectrum. This means that T-Mobile is left to enjoy the spoils. T-Mobile’s coverage is already strong in metropolitan areas, but with added spectrum, it can really reinforce its network especially in dead zones. And the good thing about this is that T-Mobile does not appear to have any clear competition in bidding for the reserve spectrum, especially now that Dish TV, Google, and cable companies are not too enthusiastic about participating in the auction. Somewhere, Legere must be pretty happy.