For wireless carriers, spectrum is king. Having more of it is certainly better than not having enough, and usually the smallest carriers, T-Mobile and Sprint (NYSE:S), are always looking for more. But Sprint announced this week that it'll skip next year's 600 MHz auction, saying it doesn't need the spectrum that's going up for sale.

In a recent press release, Sprint CEO Marcelo Claure explained:

Sprint's focus and overarching imperative must be on improving its network and market position in the immediate term so we can remain a powerful force in fostering competition, consumer benefits and innovation in the wireless broadband world, Sprint has the spectrum it needs to deploy its network architecture of the future.

Sprint Network
Source: Sprint.

Why is Sprint so confident in its own network? It ranks behind Verizon and AT&T, and is just slightly ahead of T-Mobile, according to RootMetrics. It all comes down to the company's purchase of Clearwire two years ago. 

Sprint picked up a large amount of 2.5 GHz band spectrum when it purchased Clearwire in 2013. And right now, the carrier has about 120 MHz of 2.5 GHz band, and nearly all of it is in the top U.S. wireless markets.

In total, the company has about 150 MHz of spectrum, outpacing all other carriers, but that doesn't necessarily mean Sprint has the upper hand in the spectrum world. 

The problem with what Sprint owns
Claure claims Sprint will be the No. 1 or No. 2 carrier in most major markets within the next two years, but there's at least one reason to be a bit skeptical. 

One of Sprint's biggest problems is that while the 2.5 GHz band is great for capacity, it falls short in how well it can be spread around. That means in cities where 2.5 GHz is deployed, it will be able to handle a lot of devices, but the signal strength won't travel very far. 

Sprint also has another problem: network speed. RootMetrics ranked Sprint's network the slowest and worst for data performance out of the four major U.S. carriers. Sprint knows this, and it has deployed what's called two-carrier aggregation to help improve it. 

Carrier aggregation is an LTE-Advanced technology that essentially allows two separate bands of spectrum to work together to make network speeds faster. On Sprint's fiscal-first-quarter earnings call, Claure said:

Traditionally, one area that we were lagging behind was speed. And now as we've rolled out carrier aggregation in up to 80 different markets, we have seen speeds to be between 125 megabits to 135 megabits per second in many cases.

It's pretty clear Sprint is trying to improve the vast amount of spectrum it has, but there's another roadblock that could inhibit that company's plans: money.

Network upgrades aren't cheap
Upgrading a network for faster speeds, more coverage, and increased capacity costs a carrier a pretty penny. Here's how much each plan on spending over the year:

Carrier 2015 Spending
 Verizon  $17.5 billion to $18 billion
 AT&T  $18 billion
 Sprint  $15 billion (over the next three years)
 T-Mobile  $4.4 billion to $4.7 billion

Source: FierceWireless.

Sprint will average about $5 billion in spending each year over the next three years. That surpasses T-Mobile's spending, but just marginally, and it doesn't come anywhere near what AT&T and Verizon are shelling out.

Sprint needs this instead
It's clear that Sprint technically doesn't need any more spectrum, so sitting out of next year's 600 MHz auction may not be detrimental to the carrier. Instead, Sprint needs to focus its attention on beefing up its existing spectrum, making it faster across all of its major markets and improving its data performance. 

While it'll likely do that with the network upgrades currently underway, I doubt it will keep pace with network leaders Verizon and AT&T. Both of those companies already have superior networks, and both are outspending Sprint by more than 3 to 1 to make their networks even better. Unless Sprint somehow can spend its money more efficiently than the other carriers, it appears it will continue to fall behind the market leaders. 

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.