“Sprint’s focus and overarching imperative must be on improving its network and market position in the immediate term so we can remain a powerful force in fostering competition, consumer benefits and innovation in the wireless broadband world”, Sprint CEO Marcelo Claure said in a statement.
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Sprint’s decision not to participate removes a major player from an auction that is the centerpiece of FCC Chairman Tom Wheeler’s tenure.
A recent WSJ report informed, “The U.S. Federal Communications Commission will auction off valuable 600 megahertz airwaves that can travel long distances and penetrate buildings to wireless carriers in March 2016”.
The FCC specifically came up with forward auction rules, including a reserve (set-aside) of the best spectrum for carriers not named AT&T and Verizon, to encourage competitive wireless cmopany participation, but Sprint said Saturday that it didn’t need any more spectrum. Wireless carriers would like to get hold of the airwaves to provide faster speeds to data-guzzling customers. T-Mobile US Inc., Verizon Communications Inc. and AT&T Inc. are unlikely to drop out of the bidding. There is much speculation tech or cable companies could buy spectrum to build their own wireless offerings.
Sprint has extensive spectrum holdings, but most of it is at higher frequencies. The carrier noted that its current spectrum portfolio is “sufficient” enough to continue its network upgrades.
Underlying Sprint’s decision to stay out of the next auction could be financial trouble. During the second quarter, Sprint faced $2.2 billion in lost revenue due to aggressive marketing for enticing customers to join its network.
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Earlier this month, Moody’s downgraded Sprint’s credit rating two notches, to B3, saying it lacked confidence in the company’s turnaround plan. There are many competing uses for spectrum, such as TV broadcasts, FM radio stations, and so forth, and so the government has taken it upon itself to manage available spectrum by licensing certain frequencies through these auctions.
