Now that the FCC has set a band plan for the auction of AWS-3 spectrum this fall, a complex bit of game theory is underway to see which spectrum blocks Verizon Wireless (NYSE:VZ), AT&T Mobility (NYSE:T), Sprint (NYSE:S) and T-Mobile US (NYSE:TMUS) will bid for. Dish Network (NASDAQ: DISH) could also be in the hunt for AWS-3 spectrum, which includes the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands. In the end though, Sprint may not partake in the AWS-3 auction or even the 2015 incentive auctions of 600 MHz broadcast TV spectrum, according to BTIG analyst Walter Piecyk.
In a lengthy blog post, Piecyk noted that high bids and lots of revenue raised from Verizon and AT&T in the AWS-3 auction could give the FCC more flexibility to restrict bidding by Verizon and AT&T in the incentive auctions. T-Mobile will likely compete in the AWS-3 auction--but Sprint probably won't, Piecyk wrote. That could leave Dish and its Chairman Charlie Ergen "as the FCC's biggest ally in driving prices up for this auction."
However, Piecyk thinks that Sprint and its chairman, Masayoshi Son, have sent a message via Sprint's partnerships with rural carriers "that it would be looking to other companies to build its rural coverage" and so might not need as much low-band spectrum. "We are not certain that this message was heard clearly enough in D.C. but if the company elects to focus on metro coverage in order to improve its return on capital and take advantage of its depth of 2.5 GHz spectrum, there might be little need for them to bid in the incentive auction," Piecyk wrote. Blog post (reg. req.)