T-Mobile Shells Out $4.2 Billion On Radio Frequency Licenses

T-Mobile spent $4.2 billion bidding on wireless spectrum the past three weeks to expand the geography of its cellular network as it tries to climb up from the No. 4 rung on the U.S. wireless carrier ladder. Though the FCC set up the spectrum auction--one of its largest in 12 years--to give advantages to smaller telecom companies, the big vendors still dominated, filling holes in their national coverage.

T-Mobile bought 116 radio frequency spectrum licenses in the first 18 days of bidding, as it tries to catch up to Cingular, Sprint Nextel, and Verizon Wireless in terms of coverage.

Verizon Wireless was the second-biggest winner, putting up $2.8 billion for four licenses. Sprint, in partnership with several cable providers under the name SpectrumCo, shelled out $2.3 billion for 133 licenses. Cingular trailed the others, bidding $1.3 billion for 49 licenses. The sum from all 73 rounds of bidding totaled about $13.8 billion.

The carriers aren't talking about what they'll do with the new spectrum. But it's likely they'll use it to expand and improve voice service offerings rather than advancing wireless broadband or mobile TV, as the auction's Advanced Wireless Services moniker might imply. Dropped calls are still too big a problem for customers. They want carriers to fix those problems before promoting services based on next-generation cellular technology.