Sprint will Abstain from 2016 Spectrum Auction

by Matt Klassen on October 1, 2015

In today’s wireless world spectrum is king, arguably the most important de facto natural resource of technological world. For years now network operators (and other interested parties) have fought tooth and nail over the finite amount of bandwidth useable for the transmission of data, resulting, as one might expect, in hoarding that in turn has led to government regulated spectrum auctions as a way of bringing some order (and additional revenue streams) to the chaos.

To that end, the Federal Communications Commission has scheduled the next auction for 2016, putting up what is called “low-band spectrum,” or spectrum in the 600-MHz bands, coveted, as E-Commerce Times writer Quinten Plummer explains, “For the ability of its deep wavelengths to penetrate the thick undergrowth and subterranean passages of concrete jungles.”

But as the most recent spectrum auction looms on the horizon, Sprint, now America’s fourth largest wireless carrier, has taken a decidedly unique stance, stating that it will abstain from the auction, arguing that it has enough spectrum to meet the wireless needs of its customers, and subsequently announced it will redirect those billions of dollars to where it’s needed most: network upgrades.

“Sprint’s focus and overarching imperative must be on improving its network and market position in the immediate term so we can remain a powerful force in fostering competition, consumer benefits and innovation in the wireless broadband world,” Sprint CEO Marcelo Claure wrote in the statement. “Sprint has the spectrum it needs to deploy its network architecture of the future.”

While some may question Sprint’s logic in choosing to sit out this auction, as many believe it will be the last low-band spectrum auction we’ll see for decades, there is a strong case to be made for the wisdom of Sprint’s decision.

“The decision to sit this one out won’t harm Sprint” said wireless analyst Jeff Kagan. “Many people are surprised to learn that Sprint has a very healthy amount of spectrum, so they don’t have the same need as other competitors,” he told the E-Commerce Times in an interview.

Without Sprint in the game, you will see T-Mobile make an aggressive push to grab as much spectrum as possible, as the UnCarrier, surprisingly enough, has very little bandwidth to call its own. Of course T-Mobile will have to fight against the perennial hoarders AT&T and Verizon, who, despite their glut of spectrum resources, are always in the market for more.

Instead of spending billions on spectrum, Sprint has announced a major effort to increase its network coverage and capacity by increasing the density of its network through both macro and small cell sites, technology that will allow Sprint to use the spectrum resources it already has more efficiently in order to increase overall coverage.

In the end, though, I have to wonder if Sprint’s decision to abstain from the auction will actually allow the company to continue to grow, as for every dollar Sprint doesn’t spend on spectrum is another valuable resource its competitors will gain, and their growth, despite what Sprint does, will likely come at Sprint’s expense.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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