T-Mobile and Comcast recently agreed to a deal that will see the carrier lease 71 spectrum licenses in the 600 MHz band (covering 149 million people) from the cable operator to bolster its nationwide low-band 5G network.
Impact: Both companies should benefit from the move, which materialized after Comcast conducted successful employee wireless trials using CBRS spectrum and decided it could operate its own 5G network purely on that mid-band spectrum. The success of the trials apparently convinced Comcast it no longer needed its 600 MHz low-band spectrum, especially the licenses situated outside of Comcast’s footprint. Comcast plans to launch its own CBRS-based wireless network this month in Philadelphia before expanding that to other parts of its footprint, building on the series of field tests that demonstrated the mid-band spectrum provides enough strength to support the company’s wireless operations That made Comcast’s 600 MHz spectrum somewhat superfluous and led to its decision to lease and eventually sell its 600 MHz spectrum to T-Mobile.
T-Mobile already uses 600MHz spectrum in its Extended Range 5G network, which covers all but one or two percent of the U.S. population with low-band 5G capabilities. This should enable the carrier to increase its 5G coverage and ultimately boost network capacity, part of its overall 5G strategy to offer layers of spectrum across its footprint. FierceTelecom noted that New Street Research analysts believe T-Mobile has set a goal to have 40 MHz of 600 MHz spectrum across the country. T-Mobile also purchased 600 MHz spectrum from Columbia Capital last year with enough licenses to cover 108 million people in a deal worth $3.5 billion, but even with that purchase it still had some gaps in some of the country’s larger markets.
Though the specific terms of the leasing agreement weren’t fully revealed, we know from a Comcast blog post that in most cases the cable operator will only lease one 10 MHz license to T-Mobile per market (except in Nashville, where it will get 20 MHz). T-Mobile will make quarterly leasing payments that New Street estimates could be $50 million per year before eventually purchasing the spectrum in 2028 in the rent-to-own scenario upon which the two companies have agreed. According to Wireless Strategy SVP Tom Nagel, the deal shouldn’t have “any material impact” on Comcast’s business. In fact, the deal will ultimately enable Comcast to recoup several billion dollars it could then put toward its own wireless network.
The total purchase price for the spectrum will range between $1.2 billion and $3.3 billion, depending on the number of licenses T-Mobile uses and whether Comcast exercises its right to take back its licenses in markets within its footprint. It has until the first half of 2027 when the license transfer filing goes to the FCC to make that decision. If it decides not to retain any of the licenses, T-Mobile will be on the hook for the entire $3.3 billion. The deal requires that T-Mobile purchase licenses Comcast doesn’t need in places like New York City, Orlando, and Kansas City, all non-Comcast markets. These licenses cover 39 million people and are valued at the $1.2 billion price point. The optional licenses, valued at $2.1 billion, cover markets within Comcast’s footprint, including Chicago; San Francisco; the Baltimore/Washington, D.C. area; Boston; Miami; and Nashville, and give Comcast options depending on the success of its CBRS-based wireless network.
The deal with Comcast isn’t the only splash T-Mobile has made involving spectrum recently either. In a bit of twist, the carrier seemingly joined forces with Charter to urge the FCC to consider opening up the 42 GHz band, considered mmWave spectrum, for spectrum sharing. Unlike Charter and other cable operators, T-Mobile doesn’t usually support spectrum sharing efforts, preferring to the be exclusive user of its licenses. But in this case T-Mobile cited the band’s technical characteristics and its positioning away from other mmWave spectrum as possible reasons to move forward with a non-
exclusive approach. For its part, Charter would like to see a spectrum-sharing strategy for both the lower 37 GHz and 42 GHz bands as it works to develop its own wireless network.