In April, The Wall Street Journal reported that the merger was not likely to be approved by the Justice Department. The combined company, if the proposed $26 billion deal is consummated, would have more than 127 million customers and represent the third-largest wireless player in the country. Since the deal was announced, anti-trust concerns have plagued the merger. Read: Sprint and T-Mobile agree to all-stock merger
That would be a devastating blow to our industry.” That would be a devastating blow to our industry.’ ” -The National Wireless Independent Dealer AssociationĪt that time, the National Wireless Independent Dealer Association, a trade association for independent wireless dealers, said, “It will clearly lead to consolidation, reduced competition and excessive control of the prepaid wireless market by a single carrier. As Allnet's Goemmer noted, that effort has now spread into the secondary market, with T-Mobile working with operators like Verizon to help maximize its spectrum holdings across the country.“‘It will clearly lead to consolidation, reduced competition and excessive control of the prepaid wireless market by a single carrier. The overall value of spectrum was recently highlighted by the FCC's recent C-band spectrum auction, which raised an eye-watering $81 billion in winning bids.įCC auctions are considered the "primary market" for spectrum acquisitions, but operators often conduct horse trading on the so-called "secondary market" for spectrum, as T-Mobile and Verizon have done.īut for T-Mobile, the deal is noteworthy considering it closed its purchase of Sprint last year and is now in the midst of a $60 billion, five-year 5G buildout program that will combine its network with Sprint's network. Operators routinely approach each other to improve their respective spectrum positions, given the fact that spectrum remains a critical element in any wireless network. Moreover, spectrum swaps are nothing new. Such spectrum – rather than disparate chunks of spectrum across a variety of bands – is highly valued among wireless network operators hoping to maximize the speeds and coverage they can provide to customers.
Nonetheless, the transaction highlights operators' general desire for large blocks of contiguous spectrum. Verizon and T-Mobile did not provide any potential financial details about their spectrum deal, and wireless companies typically do not comment on their spectrum exchanges beyond their FCC filings. Verizon's network doesn't use 600MHz spectrum. T-Mobile's lowband 5G network works mainly on the 600MHz spectrum the operator acquired during an FCC spectrum auction in 2016. "The other thing that is interesting about this application is that Verizon is trading away one of their few 600MHz licenses," Goemmer said, explaining that Verizon acquired some 600MHz spectrum licenses through its purchases of smaller operators Bluegrass Cellular and Chat Mobility. "These trades are focused on markets where both carriers improve their spectrum consolidation in a market," Goemmer explained.įor example, he said that one of the swaps, in Rockville, Illinois, would allow Verizon to hold 10MHz of contiguous spectrum instead of two blocks of 5MHz, while T-Mobile would get 25MHz of spectrum instead of a block of 20MHz and another block of 5MHz. The transactions span a number of spectrum bands, including PCS, AWS-1, 600MHz and AWS-3.īrian Goemmer, the founder of spectrum-tracking company AllNet Insights & Analytics, told Light Reading that the transaction appears to be an attempt by T-Mobile to harmonize its spectrum holdings following its merger with Sprint last year. Spectrum alignment also reduces coordination burdens associated with operations at the edge of market boundaries, because the licensee can then operate on the same frequency block in adjacent markets." Aligning the spectrum blocks held in adjacent market areas allows the carriers to operate more efficiently by facilitating handoffs when users transition to the adjacent markets. In their FCC filing on the transaction, the companies said their new deal "will allow these parties to enjoy the efficiency benefits associated with larger blocks of contiguous spectrum and/or alignment of spectrum held in adjacent markets. T-Mobile and Verizon are asking the FCC to approve a new spectrum-exchange deal that the companies said would improve their wireless coverage in locations in states ranging from Michigan to Oregon to Illinois.