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5G Wireless on 600 MHz Spectrum Gathers Steam: Who Will Gain?

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The need to remain connected is a human condition. An era of digitization and technology is essentially built on this need. It is here that telecommunications come to the fore as a necessary utility. With the U.S. wireless telecom industry continuously evolving, companies in the league are fighting it out to stay abreast of competition. The latest in the league is the upcoming 5G wireless technology.

In order to provide sufficient 5G wireless network without any interruptions, the Federal Communications Commission ("FCC") freed unutilized spectrums of several TV broadcasters and auctioned those to wireless operators. The much hyped 600 MHz low-band wireless spectrum auction, popularly known as — Incentive Auction — was concluded in 2017.

Advantage of 5G Wireless Network

Latency period of 5G data delivery will be in milliseconds. Further, 5G technology is designed to be more power efficient than any other standard wireless network available now. Consequently, 5G-enabled mobile devices are likely to last a lot longer than their 3G or 4G counterparts.

The rising demand for technologically superior products has been a silver lining for the telecom space in an otherwise tough environment. In this respect, the superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of internet-connected devices, popularly known as Internet of Things (IoT).

Advantage of Low-Band Wireless Frequencies

Low-band spectrum is crucial for wireless operators as the signals can be transmitted over longer distances and through brick-and-mortar walls in cities. The low-band airwaves offer a wider coverage compared with millimeter waves and reach hundreds of square miles from a single tower, unlike the latter which reaches less than a square mile. This is likely to provide a competitive edge over other standards that reportedly focus on a select group of customers in particular regions.

Leading 600 MHz Wireless Spectrum Holders

T-Mobile US Inc. TMUS is the biggest winner of the Incentive auction. The company spent $8 billion in order to acquire 1,525 licenses. The company is in process to build a nationwide 5G wireless network. Recently, it has completed the world’s first 5G data transmission on low-band spectrum (600 MHz) in association with Nokia Corp. NOK.

Meanwhile, satellite TV operators, DISH Network Corp. DISH bought 486 licenses for a consideration of $6.2 billion. Communications services and media conglomerate Comcast Corp. CMCSA spent $1.7 billion to receive 73 licenses. Additionally, incumbent wireless operator United States Cellular Corp. USM also acquired 188 licenses for more than $2 billion.

However, except T-Mobile US, none other companies have given any details of their plan to install 5G wireless network on 600 MHz frequency. Comcast is providing wireless services as a mobile virtual network operator. United States Cellular sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Price performance of four major 600 MHz spectrum license holders in the last six month.

Bottom Line

The United States is progressing well to lead the world in 5G — the next generation of wireless connectivity — which will enable faster speeds and low latency wireless broadband services. Leveraging state-of-the-art communication network architectures, 5G is touted to be the primary catalyst for next-generation Internet of Things services. Application of 5G on low-band 600 MHz frequency will further strengthen its data transmission capabilities.

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Nokia Corporation (NOK) : Free Stock Analysis Report
DISH Network Corporation (DISH) : Free Stock Analysis Report
Comcast Corporation (CMCSA) : Free Stock Analysis Report
T-Mobile US, Inc. (TMUS) : Free Stock Analysis Report
United States Cellular Corporation (USM) : Free Stock Analysis Report
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