T-Mobile leases 600 MHz spectrum from Columbia Capital

T-Mobile 5G
T-Mobile has borrowed some 600 MHz during COVID-19, but its deal with Columbia is a paid leasing arrangement. (T-Mobile)

The COVID-19 crisis propelled the big three wireless carriers to borrow spectrum for 60 days to increase their capacity. But now, T-Mobile has entered into a three-year arrangement with LB License Co. — a company controlled by the venture capital firm Columbia Capital — for a 600 MHz paid leasing arrangement.

The deal with Columbia Capital gives T-Mobile immediate access to between 10 and 30 MHz of additional 600 MHz spectrum in various markets, including St. Louis, San Francisco, Seattle, Philadelphia, Chicago, Boston and Los Angeles, among others.

In a Public Interest Statement attached to its FCC Form 608 filing, T-Mobile said, “The leasing arrangements will promote the objective of T-Mobile U.S.’s rapid buildout of its 5G network.”

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In T-Mobile’s deal with Columbia Capital, “the typical depth of spectrum being leased is 10 MHz, but there are 5 markets with 20 MHz,” wrote LightShed analysts in a blog. “This increases T-Mobile’s 600 MHz spectrum holdings in those markets by 50%, on average. There is no sale provision at the end of the lease, and T-Mobile can opt out six months early. The financial terms of the deal were not disclosed.”

The carrier also said the new leases are similar to what T-Mobile will be arranging with Dish as part of the approval of the Sprint/T-Mobile merger. In that deal the Department of Justice gave T-Mobile permission to lease some or all of Dish’s 600 MHz spectrum while Dish builds out its own 5G network. T-Mobile’s expected leasing arrangements with Dish are also on a three-year time frame.

By the end of three years, T-Mobile should be in great shape, from a spectrum perspective, having by then integrated Sprint's 2.5 GHz assets.

Covid’s impact

In March, T-Mobile rustled together 600 MHz spectrum from a variety of other providers to help it meet increased customer demand for wireless broadband as a result of the COVID-19 crisis. The companies that are lending spectrum to T-Mobile are Dish, Comcast, NewLevel, LB License Co (Columbia Capital), Channel 51, Omega, Bluewater and TStar License Holdings.  

RELATED: T-Mobile herds 600 MHz spectrum from other providers for COVID-19 response

Brian Goemmer with AllNetInsights has done an analysis “Assessing the COVID Temporary Spectrum Licenses.”

Asked why companies such as Columbia Capital invest in spectrum, Goemmer said they’re speculators. “They look for opportunities through spectrum to get a return on investment.” They participate in spectrum auctions and then sometimes hold the spectrum for years, anticipating that it will be more valuable in the future. Goemmer said these companies help make the auctions competitive.

According to LightShed, T-Mobile owns 45% of all 600 MHz spectrum available for wireless operators. Dish, Comcast and Columbia Capital own 73% of the 600 MHz spectrum that T-Mobile does not.

AT&T and Verizon are also borrowing spectrum during the COVID-19 outbreak. 

RELATED: Dish lends spectrum to AT&T during COVID-19 pandemic

Dish is lending 20 MHz of its AWS-4 (Band 66) and all of its 700 MHz spectrum to AT&T at no cost for 60 days. And the FCC also granted Verizon special temporary authority to tap AWS-3 spectrum from Dish-related entities, Northstar Wireless and SNR Wireless LicenseCo, for 60 days at no cost.

Analysts have speculated that some of these spectrum loans to AT&T and Verizon could turn into spectrum leases if the parties can navigate the legal and regulatory waters. Dish has agreed to restrictions on selling or leasing its spectrum to any of the three largest wireless providers as part of its promise to build a nationwide 5G network. But the coronavirus could be considered an “Act of God” that changes the wireless landscape.

“The carriers have increased traffic, and they’ve almost created this heightened need for wireless,” said Goemmer. “After 60 days, if they were to give back the spectrum, would there be negative consequences to the mobile networks? None of the carriers or the FCC want to see poor network statistics.”

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