T-Mobile Faces Competition in Many Markets for Incentive Auction Reserve Spectrum, Wells Fargo Says
AT&T and Verizon will be eligible to bid for incentive auction reserve spectrum in many markets where they now hold less than 45 MHz of low-band spectrum, and that's a point being missed by many investors, Wells Fargo analyst Jennifer…
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Fritzsche said Thursday in a research note. The FCC released information Oct. 15 in a public notice that listed all of the markets in which each of the four major national carriers is reserve eligible (see 1510160065). By Fritzsche’s calculations, AT&T qualifies to bid in 242 markets covering 81.8 million POPs and Verizon in 112 markets covering 58.7 million. Their eligibility overlaps in 69 markets with a population of 19 million POPs, she said. While that means T-Mobile will face off against Verizon or AT&T in many markets, the news isn't all bad for the carrier, she said. T-Mobile already has 700 MHz A-block licenses covering 190 million POPs and recently bought an additional 20 million POPs, she said. T-Mobile will also be helped by Sprint’s absence from the auction and Verizon’s signaling that it may not be that active in the auction, Fritzsche said. She said neither Verizon nor AT&T is reserve eligible in Chicago, the biggest market in which T-Mobile doesn't own 700 MHz spectrum. “In our view, this, in addition to Sprint's absence in the auction, still makes [T-Mobile] well positioned to strategically acquire 600 MHz spectrum in certain markets to augment its existing 700 MHz network,” she said. “But this auction may not be as easy as a cake walk as most think for Team Magenta!”