T-Mobile’s 600MHz bid is looking better today
Wisconsin-based cellular carrier Cellcom will not be bidding in the FCC’s 600MHz spectrum auction next year, the company’s CEO said during a conference held by the Competitive Carrier Association.
Why is this important to T-Mobile?
The T-Mobile insurgency of the mobile carrier market has helped tickle more subscribers pink. But if it wants to be where its customers are, T-Mobile will need to keep building towers and expanding coverage. It will need opportunities and investment into them to get all that done.
Come early next year, the FCC will be selling off pieces of the far-travelling 600MHz band to cellular carriers. T-Mobile has been an especially strong force in requesting the FCC to partition 30MHz of spectrum specifically for smaller carriers.
The carrier has villainized the two largest carriers in the nation, AT&T and Verizon — or as T-Mobile CEO John Legere refers to them as, “Dumb & Dumber” — for having won so much of the 700MHz spectrum that was sold last time. Most of T-Mobile’s broadband coverage was acquired one way or another from the two carriers. The two own a 70 percent share of all the low-frequency bands for cell service.
The good news, as it stands for T-Mobile, is that Big Magenta will have very loose competition coming into the auctions. Sprint, Google (of Project Fi notoriety) and other regional providers have all expressed concerns in participating in the auction.
The turnover between spectrum bid and spectrum activation would be about four years at the earliest as most of the 600MHz bands are currently held by digital TV channels. There’s a scheme underway for TV station owners to sell their spectrum and tear down their towers for a share of the FCC auction proceeds.
“The fact that we’d be tying up millions of dollars for three to four years is a major concern,” Pat Riordan, Cellcom’s CEO, said.
Carriers like Cellcom serve as more affordable alternatives to larger carriers in rural areas. Because of that smaller scale, liquidity is that much more important to keep things in operation. That spectrum also does not ensure them an edge over said larger carriers who will also be bidding on 600MHz pieces of their own.
The Competitive Carrier Association has more than one hundred members. The association’s president & CEO indicated that the majority of them are still interested in the auction.
As the largest of the “small” carriers and with up to $10 billion ready to spend, T-Mobile is in line to take much of the 600MHz spectrum. That is, barring powerful interested parties with more money than the company is willing to offer.
Change, however, is the only real constant in the cell industry. Maybe wake us up when the auctions are over and tell us the results then.