T-Mobile US Inc. TMUS, the fourth largest national telecom operator in the U.S., is constantly building pressure on larger peers like AT&T Inc. T and Verizon Communications Inc. VZ with respect to wireless spectrum procurement. Recently, the company has asked regulator Federal Communications Commission (FCC) to disallow the purchase of low-band spectrum by AT&T from East Kentucky Network through a secondary market transaction.
T-Mobile US argued that the purchase of low-band spectrum is not in tune with the FCC’s stated policy of public interest. The deal will have serious anticompetitive consequences with the increasing concentration of below-1-GHz spectrum in the hands of AT&T. Meanwhile, AT&T has denied the allegation and stated that the said spectrum is at present fallow and unused and therefore will not affect the competitive spirit in any way. On the contrary, the frequencies in question will be utilized by AT&T to deploy 10x10 MHz LTE networks in several rural U.S. markets where customers are yet to avail the benefits of 4G technology.
This is not the first time that T-Mobile US has raised questions regarding spectrum purchase by AT&T and Verizon. The FCC is likely conduct a low-band airwaves auction called “incentive auction”. A total of 70-80 MHz airwaves will be up for sale of which the FCC has decided to set aside 30 MHz for small telecom operators only (excluding AT&T and Verizon). However, T-Mobile US wants the reserve amount to be raised to more than 40 MHz.
The FCC is likely to turn down T-Mobile US’ proposal and maintain its own stand. The regulator has collected an unprecedented $45 billion from the recently concluded AWS-3 spectrum auction. The low-band spectrum will be more crucial for wireless operators as the signals can be transmitted over longer distances and through building walls in the cities. These airwaves will be freed by TV broadcasters who have no productive use for the same.
AT&T and Verizon strongly argued that smaller operators like Sprint Corp. S and T-Mobile US are actually controlled by foreign wireless operators who have sufficient resources to bid for wireless spectrums. While Japan’s Softbank is the majority stake holder of Sprint, Germany’s Deutsche Telekom AG is the parent company of T-Mobile US. Further, allocation of more spectrums for reserve will actually diminish FCC’s fund collection from the auction.
Notably, earlier this month, The Wall Street Journal reported that DISH Network Corp. DISH is currently negotiating with T-Mobile US for a possible takeover of the latter. However, the purchase price is yet to be finalized. A possible merger between DISH and T-Mobile US has been making the rounds for over a year in the industry circle. However, nothing concrete has materialized so far. The Wall Street Journal report also stated that DISH is currently negotiating with several banks for around $10–$15 billion funding for the T-Mobile US acquisition.
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