AT&T has positioned itself to enhance its 5G coverage in the United States thanks to remaining financial resources despite committing $5.75 billion to acquire Lumen Technologies. Analysts at New Street Research believe that this deal won’t hinder AT&T’s efforts to acquire additional mid-band spectrum, particularly the 3.45GHz band essential for strengthening its 5G network. Historically, AT&T and Verizon focused on high-band millimeter wave (mmWave) spectrum for their initial 5G rollouts, which, while fast, falls short in terms of distance coverage, limiting user connectivity.
Meanwhile, T-Mobile opted for the 2.5GHz mid-band spectrum obtained from its acquisition of Sprint. This strategy proved successful, allowing T-Mobile to establish itself as the 5G leader, thanks to mid-band’s favorable balance of speed and distance coverage. In response to T-Mobile’s success, AT&T and Verizon invested heavily, spending over $68 billion on C-band licenses in a recent FCC auction.
However, AT&T recognizes it lags behind T-Mobile and Verizon in mid-band spectrum and is employing a strategy to leverage both C-band and 3.45GHz mid-band spectrum to enhance its standing in the competitive landscape. Current analyses suggest that AT&T has around $3 billion available for further spectrum purchases, although New Street estimates this figure may be as high as $7 billion. This financial cushion could facilitate AT&T’s acquisition of additional 3.45GHz spectrum, which is critical for its competitive strategy against T-Mobile and Verizon.
Nevertheless, AT&T is awaiting an FCC waiver that would allow it to exceed the regulatory limit of 40MHz on mid-band spectrum ownership. If this waiver is not granted, it may force AT&T to reconsider its plans for further expansion in the 3.45GHz band. In a filing with the FCC, AT&T acknowledged that catching up will largely depend on opportunities in the 3.45GHz spectrum, noting the scarcity of upcoming mid-band auctions.