Sprint says it will not participate in the upcoming incentive auction for 600-MHz spectrum, which could have a number of ramifications. The move is not unexpected. Sprint has the most spectrum of any of the four national providers and also labors under a debt burden and cash flow crunch.
After its acquisition of Clearwire, Spectrum easily has access to more spectrum than it arguably needs at the moment, though many would argue Sprint could benefit from access to more lower-frequency spectrum, which provides better coverage.
In fact, Sprint has suggested it could sell some of its spectrum to raise cash. The Clearwire acquisition added 133 MHz of spectrum for Sprint. Leap Wireless spectrum now is owned by AT&T while MetroPCS spectrum was gotten by T-Mobile US.
Because of the unusual nature of the upcoming incentive auction, sellers have to be convinced to relinquish their spectrum before it can be released for auction. So higher payouts provide more incentive for releasing spectrum than lower payouts.
Losing a major bidder does not likely help much, in that regard, especially since a portion of the spectrum has been set aside for bidders other than AT&T and Verizon. Unless other bidders appear, that reserved spectrum might have only one leading bidder, T-Mobile US.
But that’s where the possibilities are most uncertain. Given a chance to acquire spectrum without confronting rival bids from AT&T, Verizon or Sprint, might third parties decide it is time to buy spectrum and create their own networks?
Might this provide an opening for Comcast, Altice, Google, Apple or some other contender? The announced decision by Sprint certainly will lead to discussions about the possibilities.
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