When T-Mobile announced back in April 2018 that it was willing to pay over $26 billion to buy Sprint, the average Joe on the street thought that something was very strange. Surely there was no reason that a carrier on the rise like T-Mobile was interested in buying a wireless provider with all of the operational issues that Sprint had. And there would be no reason for T-Mobile to make the deal in order to pick up Sprint’s customers; given time, most of them would probably end up with T-Mobile anyway.
Auction of mid-band spectrum in the U.S. raises a record amount of cash
The importance of mid-band spectrum to 5G was summed up by LightShed Partners telecom analyst Walt Piecyk who said, “Mid-band spectrum will be where 5G lives. When the (bidding) numbers get this big, you have to assume that everybody’s getting more aggressive.” Besides wireless firms like Verizon, AT&T, and T-Mobile, satellite companies like Dish and cable companies like Comcast might also be bidding for this spectrum. That’s because Dish is building a 5G network as it looks to replace Sprint as the nation’s fourth largest carrier. As part of a deal that allowed the FCC and DOJ to approve T-Mobile’s merger with Sprint, Dish agreed to buy Sprint’s pre-paid business including Boost Mobile and 8 million customers.
The current auction kicked off on December 8th and will now go on hiatus for the holidays until January 4th. The U.S. Treasury will be a major beneficiary of the auction as the agency will keep the money left over after the winning bids are paid off. The winners will also have to pay an aggregate total of $13 billion to purchase equipment for the satellite companies that agreed to change their TV transmissions to a smaller portion of the C-band. This allowed the FCC to auction off mid-band spectrum as it is doing. But what is going on now is just the beginning. It might not be until 2023 when the carriers get to take control of the mid-band spectrum they’ve won. And if they need to take control earlier, they could pay the satellite companies more money to give up their C-band property early.
5G is the next generation of wireless connectivity that will deliver download data speeds that will eventually be 10 times to 100 times faster than 4G. Downloading an HD movie will take seconds instead of minutes and new technologies and businesses will be created. The countries that are first to benefit from 5G could see a boost in their economies which is why the FCC is working quickly with wireless providers to make fast data speeds and latency available to U.S. wireless users as soon as possible.