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TECHnalysis Research Blog

January 20, 2022
US 5G Market Just Got Much More Interesting

By Bob O'Donnell

While most of the recent coverage of 5G in the US has understandably been focused on the C-Band fiasco that the FAA and airline industry are unfairly foisting onto the cellular industry, another big bit of news hit late last Friday. (By the way, if you’re looking for a backgrounder that can explain the issues around the C-Band connection to airline safety in understandable language, check out this column I wrote for USAToday last November: “The FAA says 5G could interfere with planes: Is its concern actually warranted?“)

On Friday, the FCC announced the results of another radio frequency (RF) spectrum auction for cellular networks, technically referred to as Auction 110, that suddenly shifted the balance of potential power across the big US telco networks once again. For those keeping track, AT&T, Verizon and T-Mobile have been jockeying for position in the 5G world, primarily based on the spectrum holdings they have access to in what’s referred to as mid-band frequencies (essentially between about 2.5 and 4 GHz). As we’ve learned, these mid-band frequencies are essential for delivering on 5G’s promise of faster speeds, lower latency, and better coverage. In fact, they’re so important, that all the 5G networks around the world, except the US, are based around mid-band RF spectrum. Unfortunately, when 5G networks were first being designed and planned for in the US, those frequencies weren’t available, because they were being used by other industries and applications, including large satellite TV dishes and military/defense purposes.

All that changed over the last few years, however, as the FCC started to reclaim this spectrum and reallocate it for 5G usage. As a result, there have been huge, expensive efforts to acquire access rights to these frequencies. The spectrum-grab began back in April of 2018 when T-Mobile announced its intentions to purchase Sprint, primarily so it could get access to about 160 MHz of RF spectrum, starting at 2.5 GHz, that Sprint had previously acquired. Then, in 2020, the FCC’s C-Band auctions generated a record $81 billion dollars to get access to 280 MHz of spectrum from 3.7-3.98 GHz. The big winner there was Verizon. It won 60 MHz of the first 100 MHz to be deployed (called the A Block and the part that it turned on in over 46 markets yesterday) and between 80 to 140 MHz of the next chunk (called B Block), which is expected to be turned on sometime in late 2023. AT&T won about 100 MHz total (40 MHz in the A Block, which the company turned on in eight metro markets yesterday, and 60 MHz in the B Block). T-Mobile also picked up about 30 MHz in the B Block of the C-Band Auction to round out its holdings. (To be completely accurate, the numbers vary by metro market because licenses are sold by market—and there are over 100 of them—but these numbers are rough national averages.)

In this latest Auction 110 however, which covered frequencies from 3.45 to 3.55 GHz, the big winner was AT&T, with up-and-comer Dish Inc. coming in second and T-Mobile picking up a bit more as well. While the official final details of what was purchased and how it will be used can’t be revealed until January 31, it’s been reported by PC Magazine (see “AT&T, Dish Win Big in Latest 5G Auction”) that AT&T acquired 40 MHz in most markets and Dish acquired between 30-40 MHz in many markets. Once again, T-Mobile also picked up some—supposedly up to 20 MHz in the top 12 markets—and a few smaller carriers, such as US Cellular, got some as well. Verizon, however, did not participate or gain any new spectrum at all.

As a result, when you start to do some rough math on these spectrum holdings, the big lead that T-Mobile currently has over AT&T (and that Verizon’s holdings will allow them to catch up on) starts to get a bit smaller. Plus, unlike the B Block of the C-Band Auction, this new spectrum could be turned on for service this year. That means, for example, that AT&T could theoretically turn on 80 MHz of mid-band spectrum this year, while Verizon would be limited to 60 MHz. T-Mobile still has the advantage, but in many markets, they’ve only turned on 100 MHz of their total capacity. On top of that, Dish Inc. could leverage this new spectrum and use some additional spectrum it acquired through the CBRS Auction (yet another chunk of mid-band frequencies that is expected to be used primarily for private networks—see my Forbes column “CBRS Vs. C-Band: Making Sense Of Mid-Band 5G” for more) and become a viable fourth alternative in a number of places.

Of course, there’s much more to network coverage and speeds than just spectrum—lots of critical network technologies can be used to optimize a given set of spectra more efficiently than another—but it certainly serves as a good proxy for how to think about things. In other words, what initially looked like a bit of a lop-sided market in terms of mid-band 5G firepower in the US is now looking to be much more competitive. That’s bound to be a big win for consumers and businesses who want to take advantage of the many benefits that a mid-band powered 5G network can enable, as competition at this level is bound to drive better services and more attractive pricing.

Now, if people could just get back to trusting science and we could move beyond this whole sad FAA fiasco, I think we can really start to enjoy the long-awaited benefits of 5G. Clearly, the best is yet to come.

Here’s a link to the original column:

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.