T-Mobile US racks up another $3.3 billion in spectrum spend

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T-Mobile US has brokered a deal that will see it buy up to US$3.3 billion worth of 600 MHz spectrum from cable operator Comcast.

Never one to shy away from a major spectrum purchase, T-Mobile this week unveiled an agreement that will boost its 600 MHz portfolio in some major US markets with the option of others also being thrown in. All for a pretty hefty fee, of course.

Under the terms of the deal, T-Mobile will acquire $1.2 billion worth of frequencies covering around 39 million pops in New York City; Orlando Florida; Kansas City, Missouri; and elsewhere. That part of the deal is set in stone. The remainder of the transaction, which brings the total sum up to $3.3 billion, includes licences covering 110 million pops in major cities like San Francisco, Boston, Washington DC, Miami and others. However, the seller, Comcast, has the right to decide to remove any of those licences from the deal, should it so desire.

The cable operator has plenty of time to make up its mind. The transaction is, of course, subject to regulatory and antiturst approvals, and the two operators aim to file for permission from the FCC to transfer the licences in the first half of 2027, with closing coming as late as the first half of 2028. In the meantime, T-Mobile will lease the spectrum from Comcast.

In each market the spectrum in question is a 10 MHz block, aside from Nashville – one of the optional markets in the deal – where Comcast is selling 20 MHz.

If indeed it does choose to sell. At this stage, it seems that the cableco is essentially hedging its bets. It has found a buyer to enable it to monetise spectrum it doesn’t need any more, but it has a few more years to change its mind.

Comcast became a mobile player when it launched Xfinity Mobile in 2017, an MVNO that runs on Verizon’s network. It has been working on adding its own spectrum into the service in dense, high-traffic areas, and has recently focused on starting to offer 5G using the 3.5 GHz, otherwise known as CBRS, spectrum it acquired in mid-2020.

“Our 5G network field tests with CBRS spectrum have exceeded our expectations and we’ve found the band to be highly efficient and a significant part of a 5G network. This strong CBRS spectrum performance has made us realize that we are unlikely to need the 600 MHz spectrum licenses that we currently hold to support our wireless customers,” Tom Nagel SVP, Wireless Strategy, at Comcast wrote in a blog post this week.

“We’ll continue to test with 600 MHz in our Philadelphia market and if our perspective changes, we’ve secured the option to reclaim the 600 MHz spectrum within our markets, giving us excellent optionality if we need it in the future,” Nagel said.

The very idea of not needing mobile spectrum is doubtless an alien concept to T-Mobile…although to be fair it is supporting 117 million mobile customers to Comcast’s 6 million. Included in its myriad spectrum purchases over the past few years – and the acquisition of Sprint can be factored in too – was the $3.5 billion purchase of 600 MHz frequencies just over a year ago that gave it between 10 MHz and 30 MHz in a range of markets.

This latest deal, whether it turns out to be a $1.2 billion or a $3.3 billion buy, or something in between, will supplement those frequencies and bolster T-Mobile’s 5G offering. And in the meantime, it gets to lease airwaves. This deal looks like a win for both parties.


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