The 5G market in the US just got a lot more interesting

Why is it important: For those who keep track, AT&T, Verizon and T-Mobile are vying for position in the 5G world primarily based on the spectrum they have access to in so-called midbands. Here’s a rundown of who’s leading this race and why we’ve yet to enjoy the long-awaited benefits of 5G.

While much of the recent U.S. 5G coverage has understandably focused on the C-band debacle that the FAA and the airline industry are unfairly foisting on the cellular industry, another major piece of news emerged late last week. (Note: if you are looking for background information on C-band connectivity and airline security, please see this column I wrote for USA Today last November).

Last Friday, the FCC announced the results of yet another auction of radio frequency (RF) spectrum for cellular networks, technically called Auction 110, which has suddenly changed the balance of potential power in large US telecommunications networks again.

For those watching, AT&T, Verizon and T-Mobile are vying for position in the 5G world primarily based on the spectrum they have that they have access to in so-called midbands (essentially between 2.5 and 4 GHz). . As we’ve learned, these midrange frequencies are essential to deliver on 5G’s promise of faster speeds, lower latency, and better coverage. In fact, they are so important that all 5G networks around the world except the US are based on the mid-range RF spectrum.

Unfortunately, when 5G networks were first designed and planned in the US, these frequencies were not available because they were being used by other industries and applications, including large satellite TV antennas and military/defense targets.

However, things have changed in the past few years when the FCC began to restore this spectrum and reallocate it for 5G use. As a result, huge and costly efforts have been made to obtain access rights to these frequencies. The spectrum grab started back in April 2018 when T-Mobile announced its intention to acquire Sprint, primarily to gain access to approximately 160 MHz of radio spectrum, starting at 2.5 GHz, which Sprint had previously acquired.

Then, in 2020, FCC C-Band auctions generated a record $81 billion for access to 280 MHz of spectrum in the 3.7-3.98 GHz band. The big winner was Verizon. It won 60 MHz of the first 100 MHz to be deployed (called block A and the part it included yesterday in more than 46 markets) and 80 to 140 MHz of the next block (called block B), which is expected to be turned on sometime in late 2023. In total, AT&T won about 100 MHz (40 MHz in block A, which the company launched yesterday in eight urban markets, and 60 MHz in block B).

T-Mobile also purchased about 30 MHz in block B from the C-Band auction to replenish its inventory. 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 approximate national averages.

However, in this latest Auction 110, which covered frequencies from 3.45 to 3.55 GHz, AT&T was the big winner, up-and-coming Dish Networks came in second, and T-Mobile also won a little more. While the official final details on what was purchased and how it will be used cannot be revealed until January 31st, PC Magazine has reported (see below).AT&T and Dish win big in latest 5G auction”) that AT&T acquired 40 MHz in most markets and Dish acquired 30 to 40 MHz in many markets. Again, T-Mobile got a cut as well – presumably up to 20MHz in the top 12 markets – and a few smaller carriers like US Cellular got some as well. However, Verizon did not participate at all and did not receive any new spectrum.

As a result, when you start making ballpark calculations on these spectrum assets, the big advantage that T-Mobile currently has over AT&T (and that Verizon’s assets will allow them to catch up) starts to get a little smaller. Also, unlike block B in the C-band auction, this new spectrum could be brought into service this year. This means, for example, that AT&T could theoretically include 80 MHz of the mid-range this year, while Verizon will be limited to 60 MHz.

T-Mobile still has the upper hand, but in many markets they have only used 100 MHz of their total capacity. In addition, Dish Networks can use this new spectrum and use the additional spectrum purchased from the CBRS auction (another chunk of midrange that is expected to be used primarily for private networks – see my column “CBRS vs. C-band: understanding the 5G mid-band” or more) and become a viable fourth alternative in a number of places.

Of course, network coverage and speed is much more than just spectrum – many important network technologies can be used to optimize a given set of spectra more efficiently than another – but it certainly serves as a good indicator of how to think about things.

In other words, what initially looked like a bit of a lopsided market in terms of U.S. mid-range 5G firepower now looks much more competitive. This is sure to be a big win for consumers and businesses looking to take advantage of the many benefits that a mid-band powered 5G network can provide, as competition at this level is bound to lead to better service and more attractive prices.

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

Bob O’Donnell – Founder and Principal Analyst Technalize Research LLC technology consulting firm that provides strategic consulting and market research services to the technology industry and the financial professional community. You can follow him on Twitter @bobodtech.

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