Auction Exit Good News for Sprint Network Build

October 1, 2015

By J. Sharpe Smith

October 1, 20115 — Sprint’s decision to not participate in the 600 MHz incentive auction and to depend on its existing spectrum holdings sent waves through the wireless industry this week. While possibly bad news for the FCC ‘s spectrum revenues, the move may have a positive effect on the carrier’s financial position and its network build.

“Sprint’s focus and overarching imperative must be on improving its network and market position in the immediate term,” said Sprint CEO Marcelo Claure in prepared release. “Sprint has the spectrum it needs to deploy its network architecture of the future.”

The carrier also holds a varying amount of spectrum at 1.9 GHz – from 30 megahertz up to 50 megahertz per market. But generally, it has an average of 55 megahertz of 1.9 GHz and 800 MHz spectrum. In many markets the sum of its 800 MHz, 1.9 GHz and 2.5 GHz spectrum totals from 180 megahertz to 200 megahertz, according to a company spokesman. Sprint has more spectrum than any of the four national carriers.

Sprint has started what it calls “a major effort to increase coverage and capacity,” increasing the number of its cell sites. An example is its deployment of a tri-band carrier aggregation using spectrum in the 2.5 GHz, 1.9 GHz and 800 MHz band.

Sprint’s decision to sit out the broadcast incentive auction is positive for T-Mobile, because it will face less competition for the 30 megahertz of reserve spectrum. The news is not so good for the FCC and its goal of raising $80 billion in auction bids, according to Jennifer Fritzsche, senior analyst, Wells Fargo Securities.

Sprint averages 14 megahertz of 800 MHz spectrum nationwide. While Sprint has less coverage than its competition, its agreements with the 27 rural operators are helping bridge this low band coverage, according to Fritzsche.

“The quick takes on the implications of this move are mixed for Sprint, which now has to show results with its network but removes the overhang question of how it would finance the spectrum,” Fritzsche wrote. “We believe Sprint also had serious concerns about the lack of plug-and-play use of this spectrum given expected clearing delays of up to five years,”