Sprint, should it ultimately not become part of T-Mobile US, has perhaps one advantage the other three major U.S. mobile service providers do not have: it has lots of mid-band spectrum to deploy in support of 5G, right away.
Most observers say mid-band spectrum is “best” because it offers a good balance of coverage and bandwidth, even if it does not support the highest amounts of capacity available when using millimeter wave spectrum.
At the moment, partly because of its spectrum portfolio, partly because it has fewer customers, Sprint also has the greatest amount of capacity per subscriber.
In a sense, one might say Sprint and Verizon have chosen--to this point--opposite strategies for millimeter wave. Verizon has staked its 5G effort on millimeter wave, while Sprint has eschewed any use of millimeter wave.
With the caveat that much will change once the winners of Auction 103 for 3400 MHz of 5G spectrum are announced, AT&T, Verizon and T-Mobile US are likely to emerge as big new holders of licenses to use 37-GHz, 39-GHz and 47-GHz millimeter wave frequencies.
Sprint would have tough choices if the merger fails. CEO Michel Combes has argued--to be sure, it supported the argument in favor of a merger with T-Mobile US--that Sprint simply cannot compete on its own.
“Simply put, we lack the spectrum assets, scale, and financial resources needed to compete aggressively against the larger wireless companies,” he said. “We cannot build a consistently reliable nationwide 5G network on our own.”
The key phrases might be “nationwide” and “on our own.” Many observers would agree that a smaller Sprint, and a new acquirer are clear possibilities.
Some have suggested that an independent Sprint--if it is not acquired--will have to retrench as a “big city” specialist, and might also have to declare bankruptcy to clear its debt burdens. And that is where a reconsideration of spectrum strategy could occur.
If, as expected, Verizon and AT&T emerge as big holders of millimeter spectrum, while T-Mobile US increases its trove, Sprint will have to consider how its new strategy is supported by its spectrum portfolio.
Many believe Sprint will be forced to sell some of its mid-band spectrum. If that happens, how does the overall capacity portfolio have to change to support any new strategy? If millimeter wave has most value in dense urban areas, how would Sprint move forward with less mid-band spectrum?
Does Sprint absolutely need millimeter wave spectrum? If so, licensed or unlicensed? If not, how does the new business strategy alleviate such needs? Can Sprint create some relatively unique positioning that takes maximum advantage of its present spectrum assets, and simultaneously reduces the need to spend on millimeter wave capacity?
Note in this illustration why mid-band and millimeter wave provides more usable capacity. Bandwidth and channel width are directly related, as are frequency and capacity. Mobile platforms (2G, 3G, 4G) use narrow channels and lower frequencies.
Small cells using more-efficient modulation in the mid-band have wider channels. Wi-Fi has even-wider channels and higher frequency as well. Millimeter wave has extremely wide channels and very-high frequencies. The highest 5G speeds will be possible only with millimeter wave spectrum.
So that implies Sprint might have to reverse course and buy, lease or otherwise acquire millimeter wave capacity.
Sprint has not, for example, acquired millimeter wave spectrum in recent auctions. But that could change.
Much more likely, some might argue, is an even bigger change of strategy based on an acquisition of Sprint by another firm that does not raise antitrust issues. Dish is a possibility; so are a few cable TV operators.
In any of those scenarios, the realm of possibility would include capital to buy spectrum; other network assets; customer bases and revenue sources that broaden Sprint’s addressable product segments.
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