T-Mobile spectrum plans include participation in 600 MHz incentive auction and continued purchases of 700 MHz A-Block licenses on the open market
T-Mobile US is looking to add a cool $1 billion to its spectrum funds, highlighting an expected aggressive posture leading into the Federal Communications Commission’s 600 MHz incentive auction proceedings.
The carrier said it plans to raise the funds through a senior notes offering, with proceeds earmarked for “the purchase of 700 MHz A-Block spectrum and other spectrum purchases.” Deutsche Bank Securities, Citigroup Global Markets, J.P. Morgan Securities, Barclays Capital Inc. and Goldman Sachs are the joint book-running managers for the notes offering, with Credit Suisse Securities, Morgan Stanley & Co. and RBC Capital Markets down as co-managers.
T-Mobile US is expected to be a significant participant in the 600 MHz auction proceedings, which kicked off this week with the beginning of the reverse auction process where television broadcasters offer to sell their current spectrum holdings to the FCC. Once completed, the FCC will begin the forward auction process, which will see those interested in using the newly available spectrum bid for packaged licenses.
Analysts have predicted T-Mobile US could bid as much as $10 billion in the proceedings, though there is some uncertainty due to the carrier being able to bid on reserved licenses that in many locations are outside the reach of deep-pocketed rivals AT&T and Verizon Communications. T-Mobile CEO John Legere has publicly stated the carrier plans to bid aggressively in the auction.
“Let’s be clear, we are showing up, we are going to be very aggressive, we do have the balance sheet and we’re preparing for it, and we will scoop up as much as humanly possible,” Legere said. “It will be the biggest mistake any of them ever made, if they don’t show up.”
The carrier has also been aggressive in buying up – and deploying – 700 MHz A-Block licenses on the open market in a move to expand the reach of its LTE network. The carrier recently reported it had entered into agreements to acquire 700 MHz spectrum licenses covering 48 million potential customers, pushing its total 700 MHz spectrum coverage to 258 million pops.
T-Mobile US has been building up its war chest of funds for spectrum purchases, including $4 billion raised last year.
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