T-Mobile USA needs spectrum. It is one of the most valuable infrastructure pieces to fill the carrier jigsaw puzzle. Sadly, T-Mobile USA’s parent Deutsche Telekom doesn’t want to fund the carrier as much as AT&T and Verizon Wireless are willing to pay.
Instead of fighting a fair fight, T-Mobile asked the Federal Communications Commission if it would increase the amount of reserved spectrum to 40MHz for the company. Earlier today, the FCC declined T-Mobile’s plea, claiming it would stay with 30MHz reserved spectrum.
Reserved spectrum allows smaller wireless operators to acquire spectrum without having loan billions. Even though Verizon Wireless recently said it had topped out spectrum, it is expected to buy a chunk from the FCC early next year when the auction starts.
The spectrum will be in the 600MHz band, a much more valuable band than the 3.5GHz auction earlier this year. The low frequency is much better for passing through buildings, something T-Mobile desperately needs.
Losing the bid for more reserved spectrum may mean T-Mobile needs to loan spectrum from Dish Network, AT&T or Verizon Wireless. This will hurt the carrier’s ability to make net profit, since the carriers tend to make ludicrous deals to put the competition out of pocket.
T-Mobile is showing strong performance in 2015, with another two million people subscribing. That propelled the carrier above Sprint, who only added 675,000 new subscribers.