Verizon's deep pockets will do little to threaten T-Mobile's crushing 5G supremacy

Verizon's deep pockets will do little to threaten T-Mobile's crushing 5G supremacy
America's biggest ever wireless spectrum auction may have technically wrapped up last month with an astounding bid total of more than $80 billion, but until early March, it looks like we'll be left waiting and guessing who actually came out on top by seizing the largest chunk of said C-band spectrum made available by the FCC in late 2020.

Of course, industry pundits have a pretty good idea which of the three major US wireless service providers managed to outspend the other two... yet again, but unfortunately for Verizon, this is not a winner-takes-all situation. 

Instead, many experts believe T-Mobile and AT&T also splashed the cash to improve their own market positions, which in turn is likely to make it difficult, nay, virtually impossible for Big Red to take the 5G infrastructure lead for at least several years to come. That's because the national leader in terms of mobile subscribers entered the auction with a huge mid-band accumulation deficit compared to the second-largest US carrier by user numbers.

Verizon will close the gap... slightly

If the latest forecast put together by Evercore's financial analysts proves accurate, Verizon should end up owning a little over 190MHz of mid-band 5G spectrum all in all after the FCC announces the winners (and indirectly, the losers) of its record-breaking recent auction. 

That would compare quite unfavorably to the 301MHz tally predicted to sit next to T-Mobile's name when considering current and potential post-auction holdings, but at least Big Red will be able to surpass AT&T's projected total of 167MHz.

That's not nothing, and for what it's worth, Verizon and AT&T's combined mid-band numbers would exceed T-Mobile's market-dominating spectrum hoard, which is not the case right now. Obviously, we're using the term "hoard" metaphorically, as well as affectionately, given that the "Un-carrier" has done a tremendous job this past year or so of deploying and integrating every last drop of spectrum officially acquired from Sprint on April 1, 2020.

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We can definitely expect T-Mobile, Verizon, and AT&T to put to good use all of their newly purchased network-enhancing resources in the near future, but we're probably still talking about a matter of years, and unless we're missing something, the status quo could remain largely unchanged even at the end of that timeframe.

Just how important is this mid-band component?

In short, the answer to that million $95 billion-dollar question (including auction bidding and clearing costs) is "extremely." 

While T-Mobile has been aggressively advertising a so-called 5G "layer cake" approach combining low, mid, and high-band technology into an almighty network capable of delivering mind-boggling speeds in small areas of major cities and... decent download numbers in most other places, the middle layer is undoubtedly the key to wireless industry supremacy going forward.

That's because a mid-band 5G signal can strike by far the best balance between speed and availability, with low-band spectrum suffering in the former department and high-band (or mmWave) technology unable to penetrate many commonplace obstacles or travel very far.

Thanks to all those Sprint-acquired riches, T-Mobile is in a very privileged position right now, already covering more than 100 million people with what Magenta is calling its "Ultra Capacity" 5G service. That figure is obviously set to continue growing this year (and beyond), and while Verizon can tout the highest 5G speeds available in the US, as well as "nationwide" low-band coverage of its own, its mid-band disadvantage looks completely insurmountable.

The $44 billion the carrier is expected to spend on C-band spectrum will almost certainly not change that in a meaningful way, and in fact, Verizon would have barely topped T-Mobile's total mid-band holdings by 16 percent if it somehow managed to buy all of the spectrum being auctioned off by the FCC.

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