T-Mobile (NASDAQ:TMUS) has emerged the principal winner in the recent incentive auction of Low band spectrum. The Federal Communications Commission (FCC), which was selling the rights to use its re-purposed TV spectrum to any prospective wireless carrier, announced that the T-Mobile has won the deal after spending $8 billion to purchase the spectrum more than its competitors.
The Low-band spectrum will largely benefit the company on its network strategy, as its strong and can spread further and can penetrate buildings easily hence providing indoor coverage to the end users. This will be useful for both urban centres that have many structures and rural areas where the signals are low and weak. The company will now own 40MHz spectrum in the 600 MHz band across the whole of U.S.
According the company’s officials, the firm will use the new holdings to improve its coverage and compete vigorously with both Verizon Communications Inc. (NYSE:VZ) and AT&T (NYSE:T) in the growing markets where the two had enjoyed the duopoly positions in the market. The company is anticipated to expand its operations with a focus on the rural areas which will make it undercut most of its distinctive Un-carrier ways.
The low-band airwaves are valuable in rural areas and indoors where T-Mobile has struggled to operate compared to its rivals. The new analysis shows that while the T-Mobile spent more than its rivals to acquire the spectrum, it was just not based on that factor. There are other reasons that could explain how T-Mobile won the deal. For instance, the company paid for more licenses in the rural areas where its competitors like the AT&T did not bid on the spectrum.
AT&T Inc. (NYSE:T) focused in the urban areas where it has its widespread bandwidth and thought that it will take them a short period of time to improve its network congestion. However, with many advanced solutions including the LTE-U and WI-FI hotspots, the problem of network congestions could not be the problem in the coming near future. T-Mobile focused on buying the new spectrum countrywide covering remote regions that are currently under-populated.
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