T-Mobile's latest purchase means your call won't drop when you go inside - CNET

Executives say the low-frequency spectrum already in use has helped the company retain customers, catapulting it to the top of customer satisfaction surveys from companies like JD Power and Associates.

T-Mobile has made huge strides in the past several quarters reducing its so-called chu rate, or the rate at which customers drop its service. For the fourth quarter of 2015, this rate fell to 1.46 percent for is postpaid customers, or customers who pay their bills at the end of the month. A year ago, its chu rate was 1.74 percent.

"It's seems obvious, but this is one of the things that's driving up satisfaction and driving down chu," T-Mobile's CEO John Legere said on the company's eaings call Wednesday.

The latest purchase is part of T-Mobile's ongoing strategy to obtain as many spectrum licenses in this low-frequency range as it can to bolster its coverage and reliability. But T-Mobile executives admit that the deals it's been making on the secondary market won't be enough to keep up with demand and give consumers the coverage they need wherever they go.

"The strategy has been to leverage spectrum we already have and buy what we can on the secondary market," Neville Ray, T-Mobile's chief technology officer, said in an interview. "But there isn't much left to run at."

For that, T-Mobile is hoping to acquire a significant amount of spectrum in the govement's upcoming auction of airwaves taken from the TV broadcasters.

"We've always said whatever spectrum we get in the secondary market is an enhancement," Ray added. "That's why we have filed to participate in the upcoming auction."

T-Mobile lobbied aggressively for rules in the auction that favor smaller players such as itself. A few months ago, the company looked like it would dominate bidding on spectrum the FCC had carved out especially for smaller players. But now the company will likely face stiff competition from some deep-pocketed new rivals.

Cable giant Comcast confirmed earlier this month it plans to participate in the auction. There are also several investment firms that will be bidding on this spectrum.