T-Mobile’s 2.5 GHz headache

T-Mobile is in the process of snapping up the remaining 2.5GHz spectrum licenses around the country that it does not already own. That effort ought to come to a head later this month during the FCC’s planned Auction 108 of unused 2.5GHz spectrum licenses in mostly rural areas.

However, an investment firm fronted by a telecom billionaire is developing into a potential fly in T-Mobile’s 5G ointment.

Investment company WCO Spectrum, fronted by Global Crossing founder Gary Winnick, has already placed more than $1 billion in offers across 15 different entities for 2.5GHz spectrum licenses that T-Mobile is currently leasing for its 5G network. Now, T-Mobile must decide if it wants to leverage its “right of first refusal” in order to issue competing bids for those licenses.

If T-Mobile ultimately does buy those contested spectrum licenses, it could be facing up to $10 billion in additional 5G expenses. But if it doesn’t, it could become a long-term spectrum renter rather than a spectrum owner – a situation that could potentially create a brand new dynamic in the US 5G industry.

Tallying the cost

T-Mobile is likely gearing up to drop billions of dollars on 2.5GHz licenses in the coming months. The operator did not respond to questions from Light Reading about whether it has anticipated those costs in its current financial model.

The clearest part of that spending will be tied up with the FCC’s Auction 108, which starts July 29. The auction will release around 117.5 MHz of spectrum across roughly 8,000 licenses in locations scattered across the country. Other companies that have registered to bid in the auction include AT&T, Verizon and Dish Network, alongside smaller wireless operators like ATN International and C Spire.

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