In recent years T-Mobile has made it no secret they’re vying for the number one spot as the nation’s top wireless provider. As it stands, T-Mobile is the leader of 5G coverage in the low and mind-band markets, but it seems that T-Mobile doesn’t actually own a lot of the spectrum it uses to make this possible. It’s come to light that much of T-Mobile’s 2.5 GHz spectrum is leased, and at least one private investment firm is looking to buy it, which could be bad news for T-Mobile.
T-Mobile owes a lot of its “layer-cake” 5G coverage to a mix of low, mid, and high-band spectrum, with a lot bragging about its 2.5 GHz spectrum from its merger with Sprint in late 2019. This particular brand of spectrum has proven lucrative for T-Mobile because it’s forced AT&T and Verizon to scramble to find a comparable mid-band spectrum.
However, about twenty years ago, some U.S. educational institutions received 2,000 licenses for the 2.5 GHz spectrum, also known as the Educational Broadband Service (EBS) spectrum. Most of T-Mobile’s spectrum is leasing spectrum from about 1,100 of these institutions, and one investment company, WCO Spectrum, is making waves trying to purchase the EBS licenses.
Who exactly is WCO Spectrum? A spokesperson for the company told Fierce Wireless, “WCO Spectrum’s mission is to level the playing field for EBS license holders and empower them to make the decisions that are right for their educational organizations and the students and communities they serve.”
Carl Katerndahl, the managing partner of WCO Spectrum’s parent firm, Winnick & Company, believes that the schools have a financial opportunity to monetize and that the investment firm sees a significant financial opportunity to own the licenses and manage the leasing.
This is all in the news as of late because WCO Spectrum made an offer to Christian College of Georgia to buy its 2.5 GHz spectrum for $5.526 million. The college’s legal counsel reached out to T-Mobile to allow the carrier to match the offer, but T-Mobile refused and instead offered $1 million to purchase the license and told the college it didn’t have legal rights to sell it. This then tripped off a slew of legal battles that could mean trouble for T-Mobile.
Between 2005-2007, Sprint leased a lot of spectrum from many educational institutions across the country. When Sprint and T-Mobile merged, those leases then became the property of T-Mobile. However, a large portion of those leases are only for 30 years, so between 2035-2037, T-Mobile could begin to lose a lot of its real estate on the 2.5 GHz spectrum. Regardless of what happens in court, T-Mobile could be in a world of trouble in about 15 years. As much as anyone can tell, T-Mobile hasn’t budgeted to purchase these licenses. Maybe that’s why they’re not looking to buy those licenses or have other plans; either way, according to Evan Carb, principal of his own law firm in Washington, D.C., said, “I assume they’re content with the lease arrangements they already have. But I think their hand has somewhat been forced.”
WCO’s Katerndahl said, “We’re hoping to be disruptive.” The company wants to become the new holder of this lucrative spectrum while also allowing colleges to benefit from what’s considered a non-essential asset.
While we don’t know how this story will unfold, it will be an interesting one to watch. Stay up-to-date on all 5G news with 5Ginsider.com.
Source: Fierce Wireless