T-Mobile’s 800 MHz is for sale – who’s gonna buy it?

  • Dish had first dibs on the spectrum but didn’t have the finances to buy it

  • T-Mobile’s sale of the 800 MHz license is underway now

  • Big question is: Who has the ways and means to buy it?

T-Mobile CEO Mike Sievert didn’t spend a lot of time talking about his company’s 800 MHz spectrum during last week’s earnings call, but he said enough to pique some interest.

Dish Network revealed a couple months ago that it was not going to buy the 13.5 MHz chunk of nationwide 800 MHz spectrum from T-Mobile. Since then, questions brewed: Who will buy it? Does anyone have $3.59 billion at their disposal? If so, what will they do with it?

If it wasn’t clear before the call, Sievert confirmed the auction has begun. “We have commenced. We have interested parties. We have nonbinding indications of interest,” he said.

He also said there’s reason to believe that “we will meet the reserve.” But regardless of how it turns out, T-Mobile didn’t include any proceeds from the auction in its financial plan, so anything it gets for it would be “found money.”

And if no one ends up buying it, T-Mobile would get “found spectrum and capacity” that wasn’t in its previous network plan, in which case, it would figure out a way to use it – “lots of interesting things we can do with it, especially with emerging technologies,” Sievert said.

Fierce reached out to T-Mobile for more details about the auction process and will update this story if we hear back. 

Dish was given first dibs to the spectrum as part of the T-Mobile/Sprint merger, but even after Dish became a subsidiary of EchoStar, it could not come up with the financing.

Utilities in play

Other parties that have expressed interest in the spectrum include Burns & McDonnell Engineering Company, which could use it to deploy wireless broadband networks for electric utilities. It’s possible that a consortium of utilities could pool their resources, but whether they could do that to the tune of $3.59 billion is questionable.  

Another notable interested party is Anterix, the 900 MHz company whose executive chairman is Morgan O’Brien, one of the founders of Nextel Communications. If Anterix were to end up with the 800 MHz, it would be akin to going back home again. Nextel acquired the 800 MHz spectrum after a hard-fought and at times controversial battle. An Anterix spokesperson told Fierce last year that they know this spectrum band well, “as we put it together at Nextel, piece by piece over decades.”

Of course, the usual suspects come to mind as well – either AT&T or Verizon might be interested in this spectrum since it’s next to spectrum they already own. But the October 2023 amended court judgment states that T-Mobile is not allowed to sell the 800 MHz spectrum to any other national facilities-based mobile wireless network operator unless approved by the U.S. government and the states that filed suit to block the T-Mobile/Sprint merger.

That’s one of the nuggets included in a deep dive compiled by Spektrum Metrics and Sunstone Associates. In a 33-page report published in March, they evaluated everything from the 800 MHz auction format to potential bidders and implications of the spectrum screen.

Large cable companies could be potential bidders, but the problem with that theory is Comcast and Charter Communications appear to be satisfied with their wholesale relationship with Verizon. Comcast is even looking to sell its 600 MHz licenses to T-Mobile, so why would it want 800 MHz?

Terry Chevalier, managing director at Sunstone Associates, noted that T-Mobile knew for the past six months that an auction might be in the offing, so it was no doubt prepared to move as soon as Dish opted not to purchase the spectrum.

“Thus, I fully believe that they had a team and ‘plan B’ ready to go and executed quickly,” he told Fierce. He also suspects T-Mobile has a “plan C” team thinking about what to do should the auction fail and the spectrum is repurposed for a new business case.

Based on Chevalier’s interpretation of the court's final judgment, T-Mobile is not required to take anything less than the $3.59 billion – but it can if it wants. Thus, “they don’t have to take any offer below” the $3.59 billion and could keep it, he said. As Sievert pointed out, there are a lot of interesting things they could do with it.

What about all the Sprint radios and gear that used the band? Brian Goemmer, president of Spektrum Metrics, said he would be surprised if T-Mobile removed the equipment before the spectrum is sold; the equipment would still be carrying the remaining LTE traffic on the network.

Bottom line: Worth the price tag?

Roger Entner, principal of Recon Analytics, said this swath of 800 MHz isn’t enough spectrum to provide a lot of extra capacity or additional services.

The 800 MHz is considered low-band spectrum and everybody already has low-band spectrum. Nowadays, carriers want mid-band spectrum for capacity where they can ideally run one radio more efficiently. 

“Is this spectrum useful? Yes,” Entner said. But is it worth $3.59 billion? “I would say no.”