T-Mobile's spectrum deal improves the carrier's 5G Nationwide service in several markets
T-Mobile continues to buy and sell spectrum and announced yesterday that it agreed to get rid of its low-band 800MHz spectrum holdings to private investment firm Grain Management, LLC. The latter focuses on investments made in the global broadband industry and it plans on marketing the 800MHz airwaves to utilities, operators in the infrastructure industry, rural and regional operators, and companies that offer telecom services that meet certain needs.
The deal works out perfectly for T-Mobile because it will get back in return from Grain Management cash and all of Grain's 600MHz licenses. T-Mobile happens to employ low-band 600MHz spectrum for its nationwide 5G service, Such airwaves travel great distances but are slower than the 2.5GHz mid-band spectrum used with T-Mobile's Ultra Capacity 5G service.
"We are very pleased with the terms we reached with Grain and think the deal represents a great value for both parties. This deal would give T-Mobile the opportunity to work with key partners like Grain that share our vision to optimize spectrum for consumers by exploring the possibilities of how emerging technologies can support mission-critical infrastructure and communications – something that is integral to fueling our country’s continued 5G leadership that drives needed economic growth. This deal also gives us a great opportunity to deploy Grain’s 600 MHz portfolio of spectrum on T-Mobile’s network, which is already creating better customer experiences in several markets."-Dirk Mosa, Senior Vice President, Spectrum, Partnerships and Acquisitions for T-Mobile.
The transaction should be finalized at the end of next month and faces some regulatory approvals. The deal will close after all of the necessary regulatory approvals have been received and other closing conditions have been satisfied. T-Mobile kicked off its 5G build-out by spending $7.99 billion to win 31MHz of 600MHz spectrum auctioned off by the FCC in the spring of 2017.
The $26 billion purchase of Sprint gave T-Mobile the 2.5GHz mid-band airwaves it needed to dominate the early years of 5G in the U.S. 2.5GHz is called the "Goldilocks" spectrum. While it might not be as fast as high-band mmWave or travel as far as low-band, mid-band spectrum is faster than low-band and travels longer distances than mmWave. Verizon and AT&T both started their 5G build-outs with mmWave airwaves and were both forced to pivot to mid-band C-band spectrum after coming to the realization that high-band signals do not travel that far.
T-Mobile had already come to the conclusion that mid-band was the way to go with 5G which is why it was so determined to acquire Sprint and the latter's treasure trove of 2.5GHz spectrum. You didn't think that T-Mobile was interested in Sprint for its consumer business, did you? It all worked out swimmingly for the nation's second-largest wireless carrier which is arguably considered the U.S. leader in 5G service.
The 600MHz spectrum that T-Mobile is acquiring is already being used to improve the experiences of T-Mobile customers in certain markets according to Senior Vice President, Spectrum, Dirk Mosa.
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