The upcoming 600 MHz spectrum auction has been highly anticipated by wireless carriers, mostly because the low band is more capable of penetrating buildings and widening coverage. However, Sprint’s decision not to participate is drawing mixed reactions. Analysts are wary that Sprint’s choice to concentrate their funds on their existing network, rather expand their spectrum holdings in highly desirous low bands, represents a lack of viability for Sprint’s future. Opposing carriers are not surprised Sprint has chosen to forego the auction, since they also chose not to bid in the AWS-3 auction. Instead, they are pleased to have a large carrier opponent choose to sit on the sidelines.
Analysts believe the biggest factor in Sprint’s decision to avoid the spectrum auction is financial. The company has not been profitable since 2007, although it has invested heavily in its network, and is believed to be one of the most reliable national carriers. The idea that they should participate in an auction early next year, that will not pay them dividends in the near future, may be sound financial reasoning.
With Sprint’s absence, there are a number of companies that have a stronger chance to gain in the auction, especially rural carriers. Sprint was a small enough carrier to bid on the 30 MHz of spectrum the Federal Communications Commission was reserving for smaller, regional carriers.
Although carriers like U.S. Wireless and C Spire Wireless will likely gain more spectrum without having to compete with a major rival, T-Mobile will probably gain the most. Recent growth in the company pushed them past Sprint on the top-tier carrier list, so they are no longer the smallest national carrier. With Sprint out of the picture, T-Mobile’s biggest foe may be Dish Network. Dish Network has been slowly buying spectrum for the past few years, either to present itself as a better acquisition, or to make a bigger business play for its customers. They were a major bidder in the AWS-3 auction, and are expected to be the same in the 600 MHz band.
Overall, the spectrum auction will still be highly attended, eagerly anticipated, and is the topic of much discussion, as it has been in Inside Towers, just see the next story. Even with one major carrier out of the picture, how the spectrum will be ultimately divided is anyone’s guess.
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