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(UPDATED) Sprint-USCC spectrum deal: Sprint gets 20 MHz broader in the "City of Broad Shoulders"


WiWavelength

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by Andrew J. Shepherd
Sprint 4G Rollout Updates
Thursday, November 8, 2012 - 1:10 PM MST

 

Update: Six weeks later, Sprint and U.S. Cellular have finally filed their PCS 1900 MHz license assignment applications in the FCC ULS database. From the filing, we have learned that USCC will not relinquish all of its PCS spectrum in Springfield and Champaign, so the primary market spectrum table below has been updated to reflect that clarification. In a nutshell, Sprint will acquire a consistent PCS B block 20 MHz partition and disaggregation in all affected counties in the Chicago MTA and a consistent PCS A block 10 MHz partition and disaggregation in all affected counties in the St. Louis MTA. For a complete list of the counties included in the spectrum transaction, see this spreadsheet from the FCC filing.

 

Yesterday, Sprint and U.S. Cellular announced an agreement to transfer PCS 1900 MHz spectrum and subscribers in several midwestern markets -- notably, Chicago, St. Louis, Ft. Wayne, South Bend, Springfield (IL), and Champaign -- from USCC to Sprint. While this transaction does entail that USCC will exit its largest and home market, Chicago, it is not a merger. Overall, USCC will give up 585,000 subs but will retain over 5 million current subs, and the deal involves no transfer of wireless infrastructure. Rather, the existing USCC CDMA2000 infrastructure in the affected markets will be retired within approximately two years, as subs are transitioned to the Sprint network. The exact boundaries of the PCS licenses and subs to be transferred from USCC to Sprint have not yet been revealed on a county by county basis. So, this article will be updated once the FCC assignment applications are filed or any other further info arises.

In the meantime, know that this is a spectrum transaction, bar none. Chicago is Sprint's largest market in which it holds only 20 MHz of PCS A-F block spectrum. In nearly all other top 10 markets, Sprint holds 30 MHz of PCS A-F block spectrum. And Ft. Wayne is a proverbial red headed stepchild market -- Sprint's only top 100 market with only 10 MHz of PCS A-F block spectrum. So, most importantly, this transaction provides a 20 MHz PCS injection into Sprint's spectrum holdings in both Chicago and Ft. Wayne. For a look at the five largest markets included in the deal, see the spectrum table below:

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Moreover, Sprint's existing PCS D block 10 MHz and PCS E block 10 MHz licenses in Chicago are non adjacent. As such, Sprint has to run an extra set of guard bands -- one set of guard bands for each license. Those extra guard bands take up valuable spectrum, limiting Sprint to only six instead of seven CDMA2000 carriers in its 20 MHz of spectrum and leaving more sites in Chicago spectrum constrained than in any other big market. Synergistically, though, the PCS B block 20 MHz license that Sprint will acquire in Chicago is directly adjacent to its existing PCS D block 10 MHz license, giving Sprint a fully 30 MHz contiguous swath of PCS spectrum, which will allow Sprint to deploy additional CDMA2000 carriers and larger LTE bandwidth (10-15 MHz FDD) when the time comes to add LTE capacity. See the license contiguity in the band plan diagram below:

2qi8ier.png

Speaking of LTE, that is one of the key reasons why USCC is willing to part with its Chicago market. In most of its markets, USCC holds some combination of Cellular 850 MHz, PCS 1900 MHz, AWS 2100+1700 MHz, and Lower 700 MHz spectrum. But in Chicago, USCC controls only the aforementioned 20 MHz block of PCS spectrum. USCC entered the Chicago market just 10 years ago when it acquired PrimeCo, which had been divested as part of the merger that created Verizon Wireless. Since then, USCC has been unable to acquire additional spectrum in Chicago, leaving it effectively incapable of deploying LTE in its largest market while continuing its CDMA2000 operations. So, the deal with Sprint provides an exit strategy for Chicago in what was otherwise a dead end market for USCC.

In the other five of the six markets detailed above, USCC likely could roll out LTE, as it holds additional AWS 2100+1700 MHz and/or Lower 700 MHz licenses in those markets. It should be noted, however, that those non PCS licenses are not being transferred to Sprint in this deal. But as it exits those markets, USCC will almost surely look to sell the other licenses, too, with VZW and T-Mobile being likely buyers for the AWS spectrum, AT&T a strong possibility for some of the 700 MHz spectrum.

Sources: FCC, USCC, Sprint

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A good question is how many towers are owned by USCC and how many are they renting space on? That may explain the lack of interest in the USCC equipment.

 

The lack of interest in USCC's network infrastructure in the transacted markets is likely because those sites would be largely redundant to existing Sprint sites.

 

They have a severe lack of coverage in many of the more rural areas that are involved in the deal.

 

Hold on, that is a distortion. A "severe lack of coverage in many of the more rural areas that are involved in the deal"? No documentation of USCC coverage nor Sprint coverage that I have seen supports that assertion.

 

USCC is not exiting any of its Cellular 850 MHz markets in the area. All of the affected USCC markets run CDMA1X/EV-DO 1900. In other words, they are PCS 1900 MHz only markets. And Sprint's CDMA1X/EV-DO 1900 coverage is very comparable. In some markets, Sprint's coverage may not be quite as extensive; in other markets, Sprint's coverage is more extensive. Transferred subs in northern Indiana, for example, will definitely gain much broader native coverage with Sprint.

 

So, I would like to see some additional proof that USCC CDMA1X/EV-DO 1900 coverage greatly exceeds that of Sprint in multiple transferred markets.

 

AJ

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Look at Randolph County in my home state of Illinois.

 

Sprint has only Red Bud, USCC has Red Bud, Baldwin, and Sparta.

 

Most of the areas though, I'll concede that Sprint has stronger coverage.

 

I'm noticing USCC has spectrum they've never deployed in Carbondale/Marion (BTA 067). Anyone want to build a local wireless carrier? :lol:

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I'm noticing USCC has spectrum they've never deployed in Carbondale/Marion (BTA 067). Anyone want to build a local wireless carrier? :lol:

 

I presume that you are referring to the PCS D block 10 MHz license. It came from AT&T in a quid pro quo roughly four years ago. In that transaction, USCC acquired quite a bit of PCS 1900 MHz spectrum, much of which has been or likely will be divested.

 

See the public interest statement filed at the FCC:

 

http://wireless2.fcc...?applID=4933178

 

AJ

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I presume that you are referring to the PCS D block 10 MHz license. It came from AT&T in a quid pro quo roughly four years ago. In that transaction, USCC acquired quite a bit of PCS 1900 MHz spectrum, much of which has been or likely will be divested.See the public interest statement filed at the FCC:http://wireless2.fcc...?applID=4933178AJ

 

That's precisely what I was referring to.

 

There are other local co-ops getting back in the mobile business who could be interested in that USCC spectrum.

 

https://www.mymobilenation.com

 

These guys are owned by some of the local telephone co-ops in Southern Illinois, including the one in my area, Egyptian Telephone. Right now they don't serve that area. They had plans at first and didn't go through with them. I assume that's because they didn't want to compete with another low cost CDMA provider. There could be a niche for these guys in Southern Illinois, not to mention they play friendly with Sprint, having most of their coverage show up as native on Sprint coverage maps. With ATNI vacating the area and yielding their towers and spectrum to AT&T, there's a place to go now on the low end IMO.

 

SI Wireless DBA Mobilenation could consider buying the USCC spectrum in Southeast Missouri around the Cape Girardeau-Sikeston area and Southern Illinois as well.

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Any word of a timeline when Sprint will start to use the acquired USCC spectrum in Chicago? I hear that it's badly needed in many areas of Chicago on both the LTE and EV-DO side as the vast majority of devices are on the PCS band. Additional LTE and EV-DO carriers on the expanded PCS band are probably the next single most important step (since upgrading backhaul) to address customers' slow data speed concerns. I understand even Spark devices will often default on the PCS band so any expansion here should be noticed by all.

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Any word of a timeline when Sprint will start to use the acquired USCC spectrum in Chicago?

 

Last summer, USCC and Sprint agreed to a January 31 sunset date for the USCC network in Chicago.  That is this week.  I have heard nothing to indicate the network shutdown has been delayed.  So, the former USCC PCS B block spectrum should be free and clear by next week.  Then, Sprint deployment of that spectrum can follow.

 

AJ

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It would be interesting to know if the hardware is already installed/configured at the sites such that a few keystrokes at Sprint HQ can switch on additional carriers to utilize the new spectrum without a site visit, or is that wishful thinking?

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