Sprint Drops Out of Spectrum Auction

27 Sep 2015 | Author: | No comments yet »

Sprint Drops Out of Spectrum Auction.

“Sprint’s focus and overarching imperative must be on improving its network and market position in the immediate term so we can remain a powerful force in fostering competition, consumer benefits and innovation in the wireless broadband world,” Sprint CEO Marcelo Claure said in a statement. “Sprint has the spectrum it needs to deploy its network architecture of the future.” The auction will allow broadcasters to sell their unused spectrum to mobile carriers, and get a cut of the purchase price. Phone carriers usually have a voracious appetite for wireless spectrum, and for good reason: they don’t want to lose your business because their networks are overloaded or missing coverage.Spectrum is what carries wireless signals when cellphone and other mobile device users stream video, post photos online, check websites and use other popular features of the devices.Sprint will not participate in the upcoming FCC broadcaster incentive auction, the company announced Saturday, but one interested broadcast representative says there will still be plenty of bidders and bucks. S -2.05 % said it plans to sit out a coming auction of wireless airwaves, a surprising decision that will save the carrier billions of dollars but could deprive its network of upgrades in the future.

The spectrum up for bid next year is particularly valuable because it can carry wireless signals long distances between cell towers and easily inside buildings for better customer connections. The FCC specifically came up with forward auction rules, including a reserve (set-aside) of the best spectrum for carriers not named AT&T and Verizon, to encourage competitive wireless cmopany participation, but Sprint said Saturday that it didn’t need any more spectrum. Spectrum allocation might seem like a boring topic, but with more and more people picking up bandwidth-intensive gadgets, carriers need spectrum to support them.

The provider just announced that it’s passing on the FCC’s upcoming 600MHz auction after determining that its existing airwaves are “sufficient” for its future needs. Sprint supports the Federal Communications Commission’s efforts to bring this long-standing proceeding to a pro-competitive conclusion,” the company said. “Verizon, AT&T, T-Mobile and multiple financial and other non-carrier bidders will assure strong demand and a hugely successful auction,” said Preston Padden, executive director of the Expanding Opportunities for Broadcasters Coalition, representing most of a hundred stations interested in putting spectrum into the auction at the right price. One of the big concerns from smaller carriers like Sprint and T-Mobile going into this auction, though, was whether their larger rivals, Verizon and AT&T, would use their sizable war chests to snap up all the desirable spectrum.

Sprint said its airwaves at present are “sufficient to provide its current and future customers great network coverage.” The carrier is about to commence on another major network overhaul it says will dramatically improve data speeds. Sprint also sat out the AWS-3 wireless spectrum auction, while Verizon, AT&T and T-Mobile were all players. (http://www.broadcastingcable.com/news/washington/aws-3-tops-42-billion/1…). Bond analyst Dave Novosel with Gimme Credit has told clients that financing such bids presents a challenge to T-Mobile and Sprint because it probably would force them to take on significant amounts of additional debt. Low frequency airwaves travel farther and penetrate buildings better than airwaves at higher frequencies, meaning carriers can cover larger areas using fewer cell towers. The agency agreed to some restrictions—it set aside 30 megahertz of spectrum per market for smaller companies—but did not give T-Mobile everything it wanted.

Sprint is betting that there won’t be a big spike in demand that requires more spectrum than it has, or that the lack of 600MHz support won’t hobble compatibility or performance down the line. Remember how Sprint jumped on WiMAX in order to have 4G data before everyone else, only to regret its decision and spend a lot of time playing catch-up with its LTE-toting rivals? Sprint obtained a large swath of its higher frequency airwaves when it acquired wireless Internet provider Clearwire Corp. in 2013 Underlying Sprint’s decision to stay out of the next auction could be financial trouble. You’ll get to keep your current user name (as long as it doesn’t contain invalid characters, in which case you’ll have to go through a few extra steps to make the transfer), and all your old comments will eventually (not immediately) migrate with you. That is more important for Sprint and its customers than investing in [this] spectrum that won’t benefit our subscribers until 2020 at the earliest.” After the coming actuion, the handover will take several years for the new spectrum to be fully available to the carriers.

The carrier has seen dramatic improvements in call quality and data speeds in the past year, according to independent network analytics firm RootMetrics.

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