Sprint and T-Mobile seem to be teaming up for purchasing wireless airwave spectrum in an upcoming auction. We are talking about no less than $10 billion, according to The Wall Street Journal, so things are as serious as they can be. T-Mobile will lead the partnership, while the funds will likely come from the $45 billion financing package being constructed by SoftBank Corp to enable Sprint’s purchase of T-Mobile, but Sprint has no problem with that as this is the only chance for the two carriers to achieve their goal.
T-Mobile and Sprint becoming A Single Entity
T-Mobile and Sprint will act as a single entity for business reasons, without breaking any legal bounds. But this doesn’t have to mean that a Sprint acquisition of its U.S. counterpart is no longer in talks. This could happen later this summer, though the company has said that regulatory approval could take even longer than that.
As we have told you before, U.S. regulators have been clear about the necessity of maintaining four wireless competitors in the marketplace, with Sprint and T-Mobile being on third and fourth positions, while AT&T’s attempt to buy T-Mobile three years ago was shot down by the U.S. Justice Department.
So, while Sprint and T-Mobile has set aside no less than $10 billion for the spectrum auction, AT&T has also prepared $9 billion, while Verizon’s plans are still a mystery at this point.
The Importance of such a Low-frequency Spectrum
Why is this low-frequency spectrum so desirable? Well, it seems to be able to travels farther and penetrates buildings better, reducing the need for cell towers. You can only imagine what this means for wireless carriers as these ones.
As for the low-frequency spectrum already in use at this point, AT&T and Verizon seem to own most of it and that’s exactly why Sprint and T-Mobile are making these efforts to win the new auction. And we have even heard that FCC set aside a minority share for both Sprint and T-Mobile, but this doesn’t mean that AT&T and Verizon don’t have the chance to purchase most of this spectrum.
In fact, anything is possible at this point, so stay tuned for more!