The FCC officially granted licenses to winners of the incentive auction of 600 MHz spectrum from broadcasters, and T-Mobile is wasting no time in putting its new airwaves to use.
The auction, which wrapped up in April, raised more than $19 billion from 50 bidders who won a total of nearly 2,800 licenses. The FCC issued a statement Thursday confirming the winning bids, saying it had received full payments for the licenses.
Sprint opted out of the auction from the start, and Verizon surprised many industry insiders by walking away empty-handed, while AT&T spent less than $1 billion for the low-band airwaves. T-Mobile was the top bidder, agreeing to pony up nearly $8 billion, and the operator said Thursday it will begin testing its new airwaves in the coming weeks.
“Despite the cries from skeptics, T-Mobile has already kicked off deployment activities and will see the first sites ready for testing this summer,” the carrier said in a press release. “This timeline—well ahead of expectations—sets the stage for commercial operations later this year. That’s when new 600 MHz smartphones from Samsung and other manufacturers are anticipated to arrive.”
The auction enabled T-Mobile to quadruple its holdings of low-band spectrum, according to the carrier. It expects more than 1 million square miles of 600 MHz spectrum to be “clear and ready for deployment by year end.”
While T-Mobile is investing heavily in low-band spectrum, both of its larger rivals are aggressively pursuing higher-band airwaves that don’t propagate as well but offer increased capacity. Sprint, meanwhile, is gradually deploying services on its significant portfolio of 2.5 GHz spectrum.
The FCC is maintaining a 39-month repacking plan for the 600 MHz airwaves recently sold at auction to give TV broadcasters time to move off that spectrum onto other channels. But T-Mobile is moving to leverage its new spectrum as quickly as possible, enabling it to deploy services in suburban and rural markets where it previously hasn’t had much of a presence.
And that should be a boon for the tower sector, according to Jennifer Fritzsche of Wells Fargo Securities.
“Given many thought this spectrum was unusable for four-plus years, any ‘live’ market in 2017 is ahead of the original expected timeline in our view,” Fritzsche wrote in a note to investors. “We view this as an important and continuing catalyst for the tower sector…. While T-Mobile is using many smaller private tower companies to build new towers, we would expect this broadcast spectrum deployment to also touch its current towers (which Crown Castle now owns) in the form of amendments. Given the low-band nature of this spectrum, this equipment is not small.”