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The spectrum deal was initially conceived as part of T-Mobile's acquisition of Sprint in 2020
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Dish parent EchoStar revealed last week that it will not get the financing necessary to pay T-Mobile for the 800 MHz spectrum licenses by the April 1 deadline
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T-Mobile must now conduct an auction of the spectrum
Now that Dish Network has said it will not be buying the 13.5 MHz chunk of nationwide 800 MHz spectrum from T-Mobile that it was entitled to for $3.59 billion, all eyes are on the upcoming auction.
Asked about the process during the Morgan Stanley Technology, Media and Telecom Conference on Tuesday, T-Mobile CFO Peter Osvaldik said that technically, Dish has until April 1 to exercise its option to buy the 800 MHz spectrum.
Even though, through parent EchoStar, Dish filed a 10-K with the SEC last week saying that it doesn’t intend to buy the spectrum, “they still have that time,” Osvaldik said, referring to the April 1 deadline.
Should April 1 come and go without Dish exercising its option, T-Mobile is obligated to take the spectrum to auction with a floor price of just under $3.6 billion. “We haven't commenced that auction yet, but should they choose not to exercise it, that'll be the next step for us,” he said.
The deadline for the auction is this fall, and any restrictions on who is eligible to bid on the spectrum will be up to the FCC.
The spectrum would be ideal for AT&T and Verizon because it sits next to spectrum licenses they already own. However, under the government’s agreement to approve the Sprint/T-Mobile merger, T-Mobile can’t sell the licenses to any other national facilities-based mobile wireless network operator without the prior approval of the U.S. government.
Private network opportunities
Other parties have expressed interest in the spectrum, including Burns & McDonnell Engineering Company, which could use it to deploy wireless broadband networks for electric utilities. Fierce reached out to the company for comment but did not immediately hear back.
Similarly, another interested party is Anterix, the 900 MHz license holder whose founders created Nextel Communications, which was a highly successful nationwide push-to-talk (PTT) provider until Sprint bought it in 2004. Anterix, formerly pdvWireless, is lining up utilities across the U.S. as private LTE network customers.
Fierce caught up with Anterix Chief Regulatory and Communications Officer Chris Guttman-McCabe and Chief Technology Officer Carlos L’Abbate at Mobile World Congress in Barcelona last week and asked about their interest in the 800 MHz spectrum. The meeting was held before Dish revealed it was walking away from the deal and forfeiting the $100 million prepayment it made to T-Mobile.
Guttman-McCabe, a former CTIA spokesperson, said they’re “paying attention” to the machinations around the 800 MHz spectrum.
“As it moves through the process, we’re going to continue to pay attention to what the opportunities are,” he said. “It’s spectrum we know and understand as a company.”
L’Abbate noted the scarcity of spectrum with the kinds of propagation characteristics inherent in the 800 MHz band and the fact that there are no federal or other incumbents using this spectrum. In the case of other potential bands for commercial wireless purposes, there are existing users that would need to be relocated. This spectrum is ready to go, which increases its attractiveness.
The FCC usually conducts auctions and in the case of this chunk of 800 MHz, T-Mobile will be in the somewhat unusual position as the auctioneer, generating a good deal of intrigue around the process.
“I don’t think anyone knows how it’s going to play out,” Guttman-McCabe commented.