Verizon Tops List of 5G Spectrum Bidders -- 2nd Update
By Drew FitzGerald
Verizon Communications Inc. secured more than half of the
wireless airwaves offered in a U.S. government auction that racked
up a record $81 billion in bids, according to details released
Verizon pledged $45.5 billion for the midrange spectrum rights,
which can extend the reach and bandwidth of its fifth-generation
wireless service. AT&T Inc. bid $23.4 billion, while T-Mobile
US Inc. bid $9.3 billion.
The results answered a question that has absorbed
wireless-industry investors since the Federal Communications
Commission started the auction in December. Purchases of licenses
to use certain airwaves are among the biggest checks a cellphone
carrier can write.
Wireless companies have snapped up ever-larger chunks of the
electromagnetic spectrum to keep up with their customers' growing
demand for music, video and software streamed to their smartphones.
A shortage of the asset can degrade service, putting a carrier at a
The most recent spectrum sale offered cellular companies,
cable-TV providers and other qualified bidders a chance to expand
their wireless operations into the C-band range, a swath of
airwaves previously restricted to satellite communications. The
commission auctioned off 280 megahertz of the band, leaving the
rest to incumbent satellite users and guard bands to block
Strong demand for the 5G-friendly frequencies drove initial bids
to a record $80.9 billion. A second phase designed to sort out the
license types awarded to each bidder pushed the total last week to
Regional wireless carrier U.S. Cellular Corp. offered $1.3
billion for licenses in certain areas. An affiliate of
private-equity firm Grain Management spent just under that
Other expected bidders remained largely on the sidelines. An
affiliate of Dish Network Corp. bid $2.5 million, suggesting the
satellite-TV operator will rely on its existing cache of spectrum
to build a new 5G network from scratch. C&C Wireless Holding
Co., a joint venture of cable operators Comcast Corp. and Charter
Communications Inc., won no licenses.
Down payments on the spectrum licenses are due March 10. The
winning bidders will also spend an estimated $14 billion more to
cover the costs of the satellite operators shifting their
operations to a narrower band of the spectrum.
The promised sums could have lasting effects on the companies
that bought the licenses. AT&T recently took out a $14.7
billion loan intended for spectrum purchases, among other
priorities. Verizon and T-Mobile are widely expected to issue new
bonds to pay for their pieces of the pie.
The carriers will use revenue from customers' cellphone bills to
pay back those debts over time. Companies are widely expected to
tout the broader benefits that 5G service offers business devices,
rather than smartphones, as justification for the spending
"They need to attach some revenues to this huge check that
they're writing," said John Hodulik, an industry analyst at UBS
Mr. Hodulik said Verizon in particular will discuss the benefits
C-band spectrum offers its home-internet customers. Combining the
airwaves acquired this year with existing high-frequency spectrum
holdings could support a service that "could actually be something
of a competitor to cable," he said.
The most recent auction wasn't cellphone carriers' last chance
to secure midrange spectrum. Jessica Rosenworcel, the FCC's acting
chairwoman, this week proposed a plan that would launch another
auction for 100 megahertz of similar midrange spectrum in early
Write to Drew FitzGerald at email@example.com
(END) Dow Jones Newswires
February 24, 2021 16:56 ET (21:56 GMT)
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