A T-Mobile US investment in 600MHz spectrum during a recently concluded spectrum auction could take years to pay off due to a lack of compatible smartphones, Forbes reported.
The US division of Deutsche Telekom emerged as the biggest buyer of spectrum in the so-called “incentive auction”, which saw spectrum sold by broadcasters to wireless players. It agreed to pay $7.99 billion for a total of 1,525 licences – roughly 45 per cent of the total available – covering the whole country and Puerto Rico.
Federal Communications Commission (FCC) documents show T-Mobile’s commitment far exceeded major rivals, with AT&T paying $910 million for 23 licences and Verizon Wireless $19.4 million for 11 licences. Indeed, AT&T and Verizon were eclipsed by Dish Networks, Comcast and US Cellular, in an auction which the FCC said raised a total of $19.8 billion.
In a related statement, the FCC said wireless carriers won “70MHz of licenced spectrum nationwide”, with a total of 14MHz available for “unlicensed use and wireless microphones”. The US regulator added the amount of licenced spectrum made available is the “most mobile broadband ever auctioned below 1GHz”.
T-Mobile swiftly announced plans to use some of the new spectrum during 2017, noting Ericsson and Nokia already offer compatible network equipment. John Legere, the operator’s CEO (pictured), also hailed its win as a leveller in terms of enabling it to compete with its rivals.
While Forbes noted T-Mobile’s investment addresses a key weakness in terms of its low-band spectrum and thus overall coverage, the newspaper pointed out there are currently no smartphones compatible with the 600MHz band.
Despite Qualcomm working on chipsets capable of handling the band, Forbes reported it could take a number of years for T-Mobile’s investment to pay off in terms of subscribers actually being able to use the low-band spectrum.
The newspaper highlighted other potential flaws in T-Mobile’s strategy, notably a move by AT&T and Verizon towards millimetre-wave (mmWave) spectrum. AT&T recently penned a $1.6 billion deal to acquire Straight Path Communications, which holds mmWave licences in the 28GHz and 39GHz bands approved by the FCC for use in 5G.
AT&T could yet face competition from Verizon in its attempt to acquire Straight Path Communications.