In a strategic move, T-Mobile US Inc. has unveiled plans to acquire airwaves from Comcast Corp. in a cash transaction ranging from $1.2 billion to $3.3 billion. Pending approval from the US Federal Communications Commission, this deal is slated to conclude by 2028.
The coveted low-band 600-megahertz spectrum presents a golden opportunity for the nation’s second-largest wireless carrier. T-Mobile’s objective is to enhance its service coverage in key areas such as New York City, Orlando, and Kansas City, Missouri, among others, as indicated in a federal filing made on Tuesday.
Comcast, on the other hand, has decided to part with these licenses as it currently leverages mid-band spectrum CBRS, rendering the 600-megahertz airwaves surplus to their requirements.
Regarding the Federal Communications Commission’s stance on the Comcast transaction, no official comment has been issued. Interestingly, the market response to this development was rather subdued, with both companies’ shares remaining unchanged as of 5:20 p.m. in extended trading in New York.
This particular band of airwaves holds immense value for T-Mobile due to its ability to cover expansive territories and penetrate obstacles like walls and windows more effectively than higher-frequency alternatives. T-Mobile had initially utilized the low-band spectrum during the initial phase of its 5G nationwide expansion.
Bloomberg Intelligence senior analyst John Butler shared insights into the significance of this acquisition: “T-Mobile’s plan to procure 10 MHz of 600 MHz spectrum from Comcast across regions encompassing up to 149 million people will empower the company with greater control over network quality and the addition of crucial long-range frequencies.
Spectrum ownership, in our belief, offers higher quality assurance compared to leasing, with Comcast retaining the option to exclude certain markets before the close in the first half of 2028.”
Notably, T-Mobile had previously announced its intent to acquire $3.5 billion worth of 600-megahertz licenses from Columbia Capital. This acquisition aims to cover cities like San Francisco, Atlanta, Chicago, Los Angeles, and Boston, among others, but it is still pending FCC approval.
Dish Network Corp. raised concerns with the FCC regarding the Columbia Capital purchase, contending that it could potentially grant T-Mobile an undue advantage in terms of airwave resources.