Some are calling Sprint’s decision to sit out the 2016 incentive auction its biggest mistake since trying to buy T-Mobile. The company cited its reasoning as prioritizing financial resources to improve network coverage, capacity, speed and reliability in the near future. TheStreet reported that Sprint’s stock dropped after the announcement because investors believe the company will be deprived of future network upgrades without this spectrum. On Monday when the market opened, Sprint shares fell 7.3% to $3.98.
Brian Fung of The Washington Post explained that this spectrum which operates at frequencies of 600 MHz should make our cellular data faster and better able to handle intensive applications like streaming music and video. Many have called these frequencies “beach-front property,” and the auction has been dubbed a “once-in-a-lifetime” opportunity. “For Sprint to turn down a chance at gaining some of this game-changing spectrum raises questions about the company’s long-term strategy,” Fung wrote. The company explained that they wouldn’t be able to deploy the spectrum from this auction until 2020 at the earliest and participating just isn’t the best decision for the company. But some question whether the company simply doesn’t have the money. “It simply doesn’t have the financial resources to buy more spectrum at this point,” said Craig Moffett, an analyst at MoffettNathanson told The Washington Post. “Eventually, their only way out will be to find a merger partner. For now, they’re just trying to keep the wheels on.”
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