T-Mobile US has constructed a convoluted spectrum deal with Comcast that will bolster the former’s far-reaching low-band spectrum position and broadband capabilities and could hint at the latter’s long-term mobile communication plans.

The deal calls for T-Mobile to purchase a variable amount of Comcast’s extensive 600 MHz spectrum licenses. That variability is tied to Comcast’s ongoing interest in those spectrum assets. T-Mobile in a government filing stated the deal could cost it between $1.2 billion and $3.3 billion, depending on the actual licenses transferred between the two companies.

The filing indicates that licenses definitely included in the deal cover 39 million people in several markets, including parts of New York City; Orlando, Florida; Kansas City; and Missouri. Licenses that could be removed from the deal cover 110 million people in markets including Chicago; San Francisco; Baltimore; Washington, D.C.; Boston; Miami; and Nashville, Tennessee. Most of the licenses are just 10 megahertz, except for the Nashville licenses, which are 20 megahertz.

During the Bank of America Media, Communications and Entertainment Conference this week, Peter Osvaldik, T-Mobile EVP and CFO, explained that the still-coalescing deal will become firm in early 2027, with an expected close in early 2028. However, T-Mobile will gain immediate access to the licenses in the meantime.

“It will be accretive to the business today and accretive for consumer good as, really, that spectrum is not out there being deployed at the moment and we have the radios ready to go,” Osvaldik said.

The executive added that the spectrum purchase did not meet any immediate capacity concerns, but was a good deal for the carrier.

Calling the 600 MHz spectrum "the bedrock of our low-band strategy," Osvaldik said it was good for both the amount of coverage it has and its ability to penetrate buildings. “We are obviously the ones that have it deployed across the board," he added. "Of course, that cash outlay is way in the future, but allows you to lease it at a rational rate in between and put it to good use for consumers.”

T-Mobile is still working through a $3.5 billion acquisition of 600 MHz spectrum it signed last year with a pair of license holders. That deal included 600 MHz licenses that are between 10 megahertz and 30 megahertz each, and in total cover more than 108 million people. They are spread across several states and include large markets like San Francisco, Chicago, Los Angeles, Boston, Philadelphia, Seattle, Dallas, Phoenix, Houston, Salt Lake City and New Orleans.

That low-band spectrum pool is not deep, as it pales in comparison to the more than 150 megahertz of 2.5 GHz mid-band spectrum T-Mobile is using to power higher speeds of its 5G network, but it does provide much broader coverage due to its superior propagation characteristics. The carrier is also integrating its broad spectrum assets through carrier aggregation technology to form a bigger transmission channel to help boost coverage and capacity of its rapidly growing fixed-wireless access (FWA) service.

The deal also potentially shines more light on Comcast’s mobile communication plans.

The cable and entertainment giant currently offers cellular telecom services through a longstanding roaming agreement with Verizon that also complements a Wi-Fi-based service that taps into customer routers. This model has proven somewhat successful as Comcast serves approximately 6 million Xfinity Mobile customers, with recent growth surpassing that of established mobile operators.

However, Comcast’s management has been coy on the company’s long-term cellular connectivity plans.

Comcast late last year struck a deal with telecom equipment vendor Samsung to provide 5G radio access network (RAN) gear that can tap into Comcast’s deep spectrum holdings. This includes its 600 MHz and Consumer Broadband Radio Service (CBRS) spectrum that sits in the 3.5 GHz–3.7 GHz bands.

The Samsung deal includes a newly developed 5G Strand Small Cell that is designed to be mounted on Comcast’s existing aerial cable lines. This all-in-one piece of equipment is central to the deployment as it will allow Comcast to mount cellular antennas where it’s already running cable connections for wireless backhaul.

Tom Nagel, SVP of wireless strategy at Comcast, at that time explained in a blog post that the cable provider will limit initial deployment to its core cable markets.

“We have no plans to build out a full national wireless network. Rather, where it makes sense, we plan to selectively deploy our own 5G radios in dense, high-traffic areas of the markets we serve today,” he stated.

Nagel added that Comcast’s licensed spectrum holdings cover around 80% of the homes with access to its wired cable product and 50% of the U.S. population. “And those are the areas where we’ll focus,” he said.

Comcast further bolstered those efforts earlier this year when it signed a deal with Nokia to provide a 5G standalone (SA) core to power Comcast’s 5G network build. The Nokia 5G SA core networking software includes the vendor’s Packet Core platform, operating software and consulting services.

Comcast earlier this year also struck a deal with virtualized edge computing pioneer Vapor IO to host Vapor IO’s Kinetic Edge data center platform to support third-party edge service providers.

Elad Nafshi, Comcast EVP and chief network officer, told SDxCentral at the time that the “early move” was tied to the cable giant looking “at value creation in the edge compute business.” He explained the trial was building off of Comcast’s current virtualized cable modem technology system (vCMTS) that underpins its current gigabit internet service.

“It really gives us a lot of opportunity to monetize where our strengths are,” which Nafshi said includes location, network and connectivity to deliver compelling services to customers.

“We want to make sure that we are in the forefront of the edge compute promise in that we’re able to test the full optionality that it affords us and maximizing both the benefits to Comcast and the benefit for our customers,” Nafshi said.

The trial also propels Comcast to the forefront of the nascent edge and multi-access edge computing (MEC) markets.

“You’ve certainly seen other approaches from some of the wireless carriers and what they’re doing with that,” Nafshi said. “I think that we have a pretty unique opportunity to really take this to market, see what works, see what doesn’t work, see what makes sense, see what doesn’t make sense and examine that and the completeness of portfolio, from a technology but also from a scalability standpoint, and take it from there.”

Comcast CEO Brian Roberts, during a recent Goldman Sachs investor conference, revealed the company was “spinning up” a trial commercial cellular service in its hometown of Philadelphia, which is a license not included in the T-Mobile deal. Roberts explained that the move was fiscally modest as it was finding a lot of usage was coming from a very small geographical footprint.

“So if this works, we're going to continue to be able to look at more markets, and I think we're in a really good space,” Roberts said.

Comcast's potential sale of most of its 600 MHz spectrum licenses does jibe with Roberts' comment about a constrained geographic footprint. The 600 MHz spectrum it has is not very deep so there is not an excess amount of capacity for high-bandwidth services, and its extensive propagation characteristics are overkill when tied to a small coverage focus.

It's more likely that Comcast would rely on its CBRS spectrum, which it spent more than $450 million to acquire during a government spectrum auction in early 2020. That would fit into its ongoing strategy of tying more of its high-value cable customers to an accompanying lower-margin mobile service as a way to maintain those customers with a reasonable financial return.