In our latest installment of our series debunking myths, I’m going to address Sprint’s throw-it-on-the-wall-and-see-if-it-sticks claim that AT&T currently has the largest licensed spectrum holdings of any wireless carrier and that, rather than deploying our spectrum, we are warehousing it.
The first is a particularly odd accusation coming from Sprint given that Sprint’s CEO, Dan Hesse, has repeatedly boasted that Sprint has the best spectrum position in the industry. Keep in mind that Sprint is a 54% owner of Clearwire, so it not only has access to its own near-nationwide portfolio of PCS spectrum, but it also has access to Clearwire’s spectrum holdings as well – which is the spectrum supporting Sprint’s 4G products and services.
Outside the beltway, Sprint is not hesitant to brag about its strong spectrum position. Last July, for example, Mr. Hesse said, “We have the spectrum resources where we could add LTE if we choose to do that, on top of the WiMAX network. The beauty of having a lot of spectrum is we have a lot of flexibility.”
The fact is that Sprint/Clearwire’s combined spectrum position far surpasses AT&T’s current holdings and will be deeper than AT&T’s holdings post-transaction. Clearwire alone has access to 150 MHz in the 2.5 GHz band in the nation’s top 100 metro areas, and boasts a market average of about 120 MHz. Sprint adds close to 50 MHz of additional PCS spectrum on top of that.
Mr. Hesse has specifically boasted that the Sprint/Clearwire spectrum holdings give Sprint a competitive advantage, saying “We have a lot of spectrum. That means we can offer a lot of bandwidth at lower cost. Are you dealing with 10 megahertz of spectrum or 120 megahertz?”.
And just this week, Clearwire’s COO touted the company’s spectrum position and its ability to meet the capacity needs of its “rapidly” growing customer base. In an interview with CNET, he said, “We have more spectrum assets than anyone else. And we can handle more capacity than any other carrier.”
In a broadband world, capacity is king, and even a combined AT&T/T-Mobile spectrum portfolio will, on average, fall far shy of the Sprint/Clearwire holdings.
The warehousing arguments are even more ridiculous. Sprint claims that we are squatting on and not deploying our AWS and 700 MHz spectrum. Spectrum in these two bands (which AT&T has spent more than $9B to acquire over the last three years) are the foundation for our 4G LTE network deployment, which will commercially launch this summer in certain markets and eventually expand to cover 97% of all Americans. So far from “warehousing” this spectrum, these bands are vital to our ability to introduce next generation wireless technologies, with enhanced speeds and capabilities, and new devices and applications.
As discussed in our merger myth series, if these bands were dedicated to our current mobile broadband UMTS platform, they would not be available for an LTE build. We would then be in the same position as T-Mobile, which dedicated its AWS bands to UMTS, leaving it no clear path to LTE.
The bottom line is that this transaction will allow AT&T to use the spectrum assets of both entities more efficiently, increasing network capacity and output, bringing 55 million more Americans into the mobile broadband tent. It will also allow us to free up additional spectrum that can be used for more spectrally efficient LTE services, thereby putting scarce spectrum assets to their most efficient use – the functional equivalent of new spectrum. In this broadband age of spectrum constraints, that is the math that really matters.