Executive summary
Mobile spectrum needs are the driving force behind the US telecoms M&A frenzy


US telecoms market :

  • The US mobile telecoms market is mainly split between 4 national players
  • A long awaited merger between Sprint/T-Mobile might boost T-Mobile spectrum and Sprint business fortunes
  • In order to approve the merger, the DoJ (Department of Justice) wants to establish a 4th mobile player to maintain market competition

Spectrum, spectrum, spectrum :

  • The US telecoms regulator (FCC) and mobile operators chose to prioritize mmWave spectrum in order to launch 5G; however mmWave limitations make this choice unsustainable in the longer run, increasing mid-band spectrum attractiveness
  • In their quest to launch nation-wide 5G networks, mobile operators are increasingly looking for additional ways of acquiring mid-band spectrum, mainly through M&A deals
  • Spectrum allocation and holdings have been shaping the US telecoms market for the past decades and will remain the main driver M&A and partnerships for the 5G era

Key players :

  • Sprint: while struggling on the business front, Sprint holds the most important share of mid-band spectrum making it an attractive target
  • Dish: holds significant spectrum, but do not operate a telecoms network yet, it is faced with a march 2020 deadline to either sell or operate
  • T-Mobile: needs to acquire spectrum in order to power network operations and its upcoming nation-wide 5G network
  • Other players: Verizon and AT&T need spectrum while non-telecoms players (Charter, Comcast, Amazon …) are looking for telecoms synergies and/or mobile telecoms diversification

Possible scenarios :

1) Merger goes through

  • New T-Mobile sells Boost, some spectrum holdings & eventually a part of Sprint’s former network to Dish, who can:
    • Run an MVNO
    • Build/upgrade a network with dedicated spin-off and/or resell the business
  • The new T-Mobile sells Boost & some spectrum holdings to Amazon who will partner with Dish to build a new mobile network

2) Merger plan falls apart

  • Sprint is acquired by another player (Dish, Comcast, Amazon, …) or Sprint to sell a part of its spectrum to other mobile operators
  • T-Mobile to find alternatives to get spectrum (Leasing or asset swap with Dish, lobbying toward FCC for the C-band auction … )

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