Most of the talk lately has been about the incentive auction, which is perhaps the most important spectrum auction in recent memory. It’s the last auction for what is called “low-band” spectrum, which is sub-1GHz spectrum. This is like gold for carriers, because this low-band spectrum makes it possible for the carriers to cover more area with less towers. It also allows their network to penetrate buildings, so you can actually get coverage indoors. For T-Mobile, this is a big deal. They currently have the least amount of low-band spectrum, of the four national carriers. And they are looking to pick up a good chunk of it during this auction.
Analysts have said in recent months that it may be several years before carriers are able to start using 600MHz spectrum on their network. Seeing as the carriers haven’t even started their part of the auction just yet. The forward auction is slated for later this year, and it could extend into 2017. After that, the FCC will need to repack the spectrum and make it available for carriers, while the TV broadcasters move to other channels. The FCC is estimating that it’ll take them about 39 months to repack all of this spectrum. Despite that, T-Mobile thinks they will be able to leverage the spectrum from this auction as early as next year.
Peter Ewens, who is T-Mobile’s executive vice-president of corporate strategy, stated in an investor conference yesterday that he “believes we’ll be able to get the start of deployment and usage at the end 2017.” Continuing by saying that “the repacking debate is still in play. I think personally the dynamic will change once the auction is over, because you will have winners in the reverse auction – that means broadcasters who want to get paid – and then you’ll have everyone else.” He also noted that broadcasters don’t get paid until the spectrum is repacked, and the broadcasters will want to get their money as soon as possible. Ewens also noted that the company is planning first deployments of 600MHz spectrum for rural areas. This is where network transitions are likely simpler to execute.