T-Mobile (NASDAQ: TMUS), in a recent FCC filing, indicated it is divesting its 3.45 GHz upper mid-band spectrum holdings. The company originally acquired 199 3.45 GHz licenses in 79 PEAs for $2.9 billion in FCC Auction 110 in 2022, Inside Towers reported. T-Mobile was the third largest bidder in that auction behind AT&T (NYSE: T) and EchoStar (NASDAQ: SATS) subsidiary DISH Wireless. UScellular (NYSE: USM) had the fifth largest bid acquiring 380 licenses in 104 PEAs for $580 million.
T-Mobile sold off its 3.45 GHz holdings in two parts. Seven percent of the portfolio valued at $159 million was swapped for 2.5 GHz licenses with SoniqWave in May with the remaining 93 percent sold to Columbia Capital for over $2.7 billion, according to New Street Research.
Since it acquired Sprint in 2020, T-Mobile has adopted a “layer cake” approach to deploying spectrum across its 5G national footprint. It uses low-band 600, 700 and 850 MHz for its 5G Extended Range service as its base. The middle layer comprises predominantly mid-band 2.5 GHz along with 1900 and 2100 MHz for its 5G Ultra Capacity offering. Millimeter wave frequencies make up the top layer.
Divesting 3.45 GHz allows T-Mobile to focus on building out its 2.5 GHz holdings. MNOs are relying heavily on upper mid-band spectrum to deliver high-speed 5G performance. Mid-band includes 2.5 GHz, C-band, 3.45 GHz and CBRS, and represents the sweet spot between long reach low band frequencies like 600, 700 and 850 MHz and high-bandwidth high band mmW frequencies.
T-Mobile takes it a step further. The company points out that 2.5 GHz is at a lower frequency range than either 3.45 GHz or C-band. With 2.5 GHz, T-Mobile says it can achieve a 30 percent farther signal propagation path than C-band and thus a larger coverage area from each cell site. That means that fewer cell sites are needed to achieve the same population coverage area.
Moreover, when combining the national average spectrum depth of their low- and mid-band holdings, T-Mobile claims that it leads with 393 MHz compared to Verizon’s 291 MHz and AT&T’s 283 MHz. With greater bandwidth, T-Mobile says it can handle higher data throughput and faster connection speeds.
The company’s intent to focus in the 2.5 GHz band is reflected in its acquisition of UScellular’s operations along some of its spectrum. T-Mobile acquired UScellular’s low-band 600 MHz and 700 MHz, mid-band PCS, AWS and 2.5 GHz, and 24 GHz mmW spectrum but did not acquire UScellular’s 3.45 GHz or C-band licenses, Inside Towers reported.
By John Celentano, Inside Towers Business Editor
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