Sprint not participating in the 600 MHz auction (report)

[smooth25]

I would have liked Sprint bidding, if for no other reason than to drive the prices up for the others. It is going to be interesting to see if Verizon is out as well, they've also made rumblings about not participating. VZ might be better served with Dish spectrum. They have ample low band but need to supplement their middle band holdings.

 

I get the counter arguments that Sprint needs to fund NGN but low band is such a finite resource. It's nice Sprint has a national band for low band LTE with band 26 but it would have been nice to supplement that in certain markets that are strong for Sprint.

With the reserve and restrictions on AT&T and Verizon, Sprint would have been in good position for lowland spectrum at decent prices. They are helping T-Mobile by not participating and at least raising the prices. T-Mobile is in great position now to get lowband at a bargain.

 

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[nexgencpu]

Try coming out to Los Angeles and then say the same thing.  Its easy to say that when a market is urban and things are very well tight together.  But in LA the market is so spread out that low band spectrum makes a huge difference.

So you were banking on 600Mhz being considerably better than Sprint's current 800Mhz? Again, I still believe adding macro sites with full builds for those situations using proven tech is still a smarter way of going about this..

[mittenmitten]

To me, the 600mhz spectrum is like buying really nice materials to build a lemonade stand. You will have a nicer lemonade stand, and it'll last longer, but the faster you build the stand, the more time you have to turn profit. Why waste money on nicer materials, when you already have the bare essentials to start your business.

 

Densification will overshadow T-Mobile in the short term. If Sprint cuts off their funding, by stealing customers quickly, T-Mobile will stall, having dug themselves into a hole betting on an asset they can't utilize in the short term.

 

I personally think this is a great strategy; Sprint is going to do exactly what T-Mobile did to them. They're going to pump out the improvements, make a huge fuss about it, and generate a lot of buzz and excitement while T-Mobile is broke (relatively speaking).

 

If Sprint desperately needs low band spectrum down the road, they can get it through M&A, exactly like every other carrier has done in the past.

[derrph]

Anything can change. Sad news yes but there's a real reasoning behind it that will come to the light soon enough.

 

Worse case more players back out such as Verizon and then the fcc delays the auction more. That would put T-Mobile in a tough spot.

 

 

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[nexgencpu]

Legere is already on this like glue...

 

https://twitter.com/JohnLegere/status/647827225719341056

 

I hope Marcelo addresses this with a proper response.

[ericdabbs]

So you were banking on 600Mhz being considerably better than Sprint's current 800Mhz? Again, I still believe adding macro sites with full builds for those situations using proven tech is still a smarter way of going about this..

 

No it has nothing to do with 600 MHz being considerably better than 800 MHz.  The point of having more low band spectrum is to add more capacity to share among users deep indoors.  I don't even care if 600 MHz in the real world allowed you to browse data another 100 feet vs. 800 MHz.  I think there is too much trust in this NGN plan when we have really no idea where Sprint is targeting these macro sites and small cells.  Macro sites take a gazillion years to get through approval with permits so it isn't going to be "Sprinting" any time soon anyways.  And then by the time these new macro sites are built and Sprint has some 600 MHz spectrum then it can deploy 600 MHz on these new macro sites as well as all of its current NV macro sites to provide even more coverage.

 

Don't get me wrong I want the NGN plan to continue to execute and I think it can do fine despite the 600 MHz auction but I just think time is what is going to be the bottleneck and not necessarily funding which has shown to be true with NV 1.0.  I don't think NV 1.0 was behind schedule due to funding but rather the red tape (permitting, backhaul delays, not enough crews, etc).  Remember once you obtain the spectrum from the FCC, it stays with the carrier forever unless they don't meet build out requirements.  But with low band spectrum that will be fairly easy to do.

 

To me, the 600mhz spectrum is like buying really nice materials to build a lemonade stand. You will have a nicer lemonade stand, and it'll last longer, but the faster you build the stand, the more time you have to turn profit. Why waste money on nicer materials, when you already have the bare essentials to start your business.

 

Densification will overshadow T-Mobile in the short term. If Sprint cuts off their funding, by stealing customers quickly, T-Mobile will stall, having dug themselves into a hole betting on an asset they can't utilize in the short term.

 

I personally think this is a great strategy; Sprint is going to do exactly what T-Mobile did to them. They're going to pump out the improvements, make a huge fuss about it, and generate a lot of buzz and excitement while T-Mobile is broke (relatively speaking).

 

If Sprint desperately needs low band spectrum down the road, they can get it through M&A, exactly like every other carrier has done in the past.

 

 

I actually think of 600 MHz as another tool in the tool belt but its not going to slow down my current project.  When it comes time to use it because the current tools don't work then its time to bust it out.  Sprint is not going to obtain any 600 MHz through M&A unless it buys out Tmobile so you can forget about that happening.  It used to be easier to acquire spectrum through M&A when there were more smaller carriers but now the only other smaller carrier is US Cellular.

 

Tmobile has proven to be a huge force and market changer so I doubt people will be flocking in droves especially given the culture and reputation it has received the last 2 years.  People's perception has a huge impact which is why Tmobile has roared back from 34 million customers to over 55 million customers today. Really the only downside negative on Tmobile right now is their native voice and data coverage which it is addressing by obtaining 700 MHz licenses and adding more low band spectrum in the future.

[JeffDTD]

Its a long game of positioning. The densification plan, the statements about being open to a merger, opting out of a big auction. It is all intentional.

 

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[Arysyn]

Legere is already on this like glue...

 

https://twitter.com/JohnLegere/status/647827225719341056

 

I hope Marcelo addresses this with a proper response.

I read the comment tweets on there and really don't understand how America giving money to Israel has anything to do with Sprint announcing they will not participate in the 600mhz auction. Very odd.

[nexgencpu]

No it has nothing to do with 600 MHz being considerably better than 800 MHz.  The point of having more low band spectrum is to add more capacity to share among users deep indoors.  I don't even care if 600 MHz in the real world allowed you to browse data another 100 feet vs. 800 MHz.  I think there is too much trust in this NGN plan when we have really no idea where Sprint is targeting these macro sites and small cells.  Macro sites take a gazillion years to get through approval with permits so it isn't going to be "Sprinting" any time soon anyways.  And then by the time these new macro sites are built and Sprint has some 600 MHz spectrum then it can deploy 600 MHz on these new macro sites as well as all of its current NV macro sites to provide even more coverage.

 

Don't get me wrong I want the NGN plan to continue to execute and I think it can do fine despite the 600 MHz auction but I just think time is what is going to be the bottleneck and not necessarily funding which has shown to be true with NV 1.0.  I don't think NV 1.0 was behind schedule due to funding but rather the red tape (permitting, backhaul delays, not enough crews, etc).  Remember once you obtain the spectrum from the FCC, it stays with the carrier forever unless they don't meet build out requirements.  But with low band spectrum that will be fairly easy to do.

 

 

 

I actually think of 600 MHz as another tool in the tool belt but its not going to slow down my current project.  When it comes time to use it because the current tools don't work then its time to bust it out.  Sprint is not going to obtain any 600 MHz through M&A unless it buys out Tmobile so you can forget about that happening.  It used to be easier to acquire spectrum through M&A when there were more smaller carriers but now the only other smaller carrier is US Cellular.

 

Tmobile has proven to be a huge force and market changer so I doubt people will be flocking in droves especially given the culture and reputation it has received the last 2 years.  People's perception has a huge impact which is why Tmobile has roared back from 34 million customers to over 55 million customers today. Really the only downside negative on Tmobile right now is their native voice and data coverage which it is addressing by obtaining 700 MHz licenses and adding more low band spectrum in the future.

Call me crazy if I have much higher hopes for something Sprint has had years to truly understand and finally execute on vs something that will be new and unknown and take years to be usable, I think we will have to agree to disagree.

[utiz4321]

I just don't see how sprint can deploy VoLTE on its current spectrum with out a super dense network every where. This is even more incomprehensible to me if I a right in my understanding there is no way to hand off between VoLTE and cdma still.

[ericdabbs]

Call me crazy if I have much higher hopes for something Sprint has had years to truly understand and finally execute on vs something that will be new and unknown and take years to be usable, I think we will have to agree to disagree.

 

Its just two different opinions on long term strategy.  Ultimately we both want Sprint to have a great voice/data network and really the debate is about how to best approach that solution.  I just think if you have the rare opportunities to obtain low band spectrum which time and time again we have all clamored at one point as to why Sprint did not participate in the 700 MHz auction because having low band spectrum was so crucial on expanding LTE coverage rather quickly but it was different times and circumstances so it wasn't going to be possible.  However I do question if Marcelo was at the helm in 2008 and 700 MHz was available for auction if he would do the same thing now and skip participating in that auction even if he had Masa as his backer.

 

At the same time here at S4GRU we have all criticized Verizon/AT&T for having a lot of low band spectrum which is great for initial LTE deployment but bad for long term capacity.  And I think Verizon/AT&T has realized that the past 2 years which is why Verizon has been focusing on obtaining more AWS mid band spectrum and AT&T beginning to deploy WCS and adding AWS spectrum to fill in the capacity needs which helps close that loop on having spectrum of all types.  Sprint and Tmobile were the other way around where they have a ton of mid band spectrum but lacked low band spectrum for coverage and it just seems so ironic that when given the opportunity to obtain some low band spectrum that they would not be chomping at the bits to try to get some of it.  Hell I don't even know why Marcelo had to release this statement at all to the rest of the wireless community.

[S4GRU]

Its a long game of positioning. The densification plan, the statements about being open to a merger, opting out of a big auction. It is all intentional.

 

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Best post in this thread. You get it. The others are distracted.

 

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[shannonbrian]

They better start optimization of network now.

[chamb]

Best post in this thread. You get it. The others are distracted.

 

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Since Sprint has a whole bunch of Spectrum available to deploy, maybe they (Marcelo) want to see the whole 600 auction fail to happen.

It probably will fail to happen if there are no real bidders to drive up the price.  The TV stations are not going to be willing to give up their spectrum if they do not reap a boatload of cash. The auction may just be canceled and soon.  Think about it. If the auction gets canceled, the other three will be more Spectrum constrained than Sprint.

[bucdenny]

Since Sprint has a whole bunch of Spectrum available to deploy, maybe they (Marcelo) want to see the whole 600 auction fail to happen.

It probably will fail to happen if there are no real bidders to drive up the price.  The TV stations are not going to be willing to give up their spectrum if they do not reap a boatload of cash. The auction may just be canceled and soon.  Think about it. If the auction gets canceled, the other three will be more Spectrum constrained than Sprint.

 

Maybe FCC will reconsider setting the reserve at 40Mhz after all on Sprint's bluff.

[Jones]

Its a long game of positioning. The densification plan, the statements about being open to a merger, opting out of a big auction. It is all intentional.

 

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For Sprint to make this move so public this far in advance of the auction there must be an underlying motive because it would seem to be the wrong move as usable low band spectrum is finite.

They must believe the money required to buy then deploy the spectrum is not in their long term plan.

 

Just thinking here... saying that they are open to a merger with a cable operator and then deciding to publicly say they aren't participating in a spectrum auction might imply talks (maybe glances/winks/nods) with an cable co. who has spectrum that would align with Sprint already, in which case a 5x5 slice of 800 Mhz would be all they need to deploy VoLTE

coughDishcough

[Jones]

Since Sprint has a whole bunch of Spectrum available to deploy, maybe they (Marcelo) want to see the whole 600 auction fail to happen.

It probably will fail to happen if there are no real bidders to drive up the price.  The TV stations are not going to be willing to give up their spectrum if they do not reap a boatload of cash. The auction may just be canceled and soon.  Think about it. If the auction gets canceled, the other three will be more Spectrum constrained than Sprint.

I don's think a major telecom company would place that kind of a bet without some sort of insider information.

[cortney]

excitement for densification just went to 11.

 

Preciously. It's very good to see Sprint is confident they can use what they have. Let the people blinded by the media bs get all frustrated over this. 

 

And to others: B41 is good and all, but that's for urban areas and the congested parts of suburban areas. That should continue and it's great. However, for everyone here not in cities, I hope Sprint puts plenty of emphasis on filling roaming gaps and extending the borders of their native coverage with B26 and making sure all low-band is optimized and adjusted promptly.

 

Otherwise, things are looking good. 

[cortney]

Also, as has been stated multiple times, 600Mhz best case scenario, the user will not experience any of it until nearly 2020 at best.

 

Don't get me started on Ericsson/Sprint deployment track record...

 

Seriously. Why are people so obsessed over 600MHz? Magentans think T-Mobile can have the whole continent blanketed with it by late 2016 to 2017 or something, when it is a long ways away from even being able to be used, let alone getting deployed after the auction even happens whenever it does.

[RedSpark]

Sprint Won't Join 2016 Airwave Auction, Saying Network Is Ample

 

Link: http://www.bloomberg.com/news/articles/2015-09-26/sprint-won-t-join-2016-airwave-auction-saying-network-is-ample

 

"“Sprint’s focus and overarching imperative must be on improving its network and market position,” Chief Executive Officer Marcelo Claure said in the e-mailed statement. “Sprint has the spectrum it needs to deploy its network architecture of the future.”"

 

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Well, this is a bit surprising given Sprint's participation/support for a 30 MHz Reserve...

 

So now T-Mobile is free to get 30 MHz of 600 MHz spectrum?

[Arysyn]

Seriously. Why are people so obsessed over 600MHz? Magentans think T-Mobile can have the whole continent blanketed with it by late 2016 to 2017 or something, when it is a long ways away from even being able to be used, let alone getting deployed after the auction even happens whenever it does.

It is very doubtful to be deployed so soon as 2017, but its also doubtful T-Mobile is going to wait beyond the very soonest possible timeframe to deploy it.

 

The main reasons I've read for Sprint benefitting from the spectrum, is both to keep so much of it going to T-Mobile and for Sprint to have more lowband spectrum many people say Sprint could really use. Both reasons are very good reasons, and is why I support Sprint being at the auction.

 

The issue against it obviously being about finances, whether Sprint saving for the auction would negatively impact their financial backing for NGN. I fully understand this and would be against Sprint participating in the auction if I thought this was the case. However, with Softbank's backing. I believe Sprint can fully afford both, though I can understand that by doing both, it may reduce Sprint's financial ability to afford a merger with T-Mobile. I'm hoping the reason Sprint isn't going to participate in the merger, is because they are planning to spend alot of money ensuring they can purchase T-Mobile.

[utiz4321]

Best post in this thread. You get it. The others are distracted.

 

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That is a hell of a bet. If the dems capture the White House again and sprint or T-Mobile become free cash flow positive they'll like run into the same regulatory problems as they did before.

[Fraydog]

I'm taking whatever year people think that T-Mobile will be able to deploy 600 MHz and subtracting a year from it. Most seem to think 2019, I would guess a year earlier than that.

 

As far as those who aren't concerned, I respectfully disagree. Even if you want more consolidation, why wouldn't you want to have a position of strength in any potential negotiations with Deutsche Telekom? This doesn't seem to be the best way to force that. Unless, of course, Masa is banking on small cells to fit into the T-Mobile network while their macro cells continue to left the heavy load, maybe even more so if 8t8r b41 is added to those macros. If I'm DT I'm laughing hard. Forget Legere here for a minute. It's Hottges who makes the call on this. He's still open to Sprint. But if he takes control, guess what branding and network survives.

[Arysyn]

That is a hell of a bet. If the dems capture the White House again and sprint or T-Mobile become free cash flow positive they'll like run into the same regulatory problems as they did before.

It definitely is more likely for these mergers to have a chance at realistically happening if there is a Republican administration. However, on the Democratic side there is a chance still if its Hillary, but if its Bernie who wins it, then yeah I definitely concede there being any chance at these happening. Though I'm not meaning to get political, just saying.

[Volaris]

From a consumer's point of view, I'm very happy with Sprint's decision. Remember, for consumers to benefit, both T-Mobile and Sprint need to be strong so they can successfully compete and be profitable. A few points:

1. T-Mobile needs 600MHz more than Sprint. Both for capacity (they don't have tons of 2.5GHz) and low band reasons (their 700MHz isn't nationwide like Sprint's 800MHz). To their credit, T-Mobile is also expanding outside their native coverage quicker to compete against Verizon and AT&T. 600MHz will but more pressure on those two.
2. Profitability. T-Mobile is profitable and has said it's predicting profits from here on. They can afford to add debt. They have less debt than Sprint. Sprint on the other hand, has burned up over $50 billion in the last few years and counting. Sprint's most important goal right now is to become profitable. Adding ~$10 billion in debt to win in this auction would not help Sprint become profitable.
3. Sprint needs to focus on 2.5GHz densification. It's where their capacity and speed lies. 800MHz can be used as a last resort band. If 800MHz gets congested, better off to densify in that area (which helps improve coverage!).
4. For those of you still thinking T-Mobile and Sprint will eventually merge... Sprint's decision will save money for both. Sprint because they won't have to take on new debt at high interest (T-Mobile's credit rating is better), and by not competing against each other, T-Mobile will be able to acquire 600MHz cheaper in most markets.