The United States Federal Communications Commission’s (FCC) latest 5G spectrum auction was dominated by the nation’s largest wireless carriers, Verizon Communications Inc. and AT&T Inc. Verizon committed $45.45 billion and AT&T committed $23.41 billion for 5G wireless airwaves in a government auction as the largest U.S. mobile carriers race to build faster networks.
Verizon, which bid under the name Cellco Partnership, was the highest-bidder earning 3,511 spectrum licenses with AT&T coming second with 1,621 licenses, as according to the FCC, both the wireless carriers pitched in spending equal to a combined $69 billion. According to a report by Bloomberg, participants in the auction also included T-Mobile US Inc. and pay-TV providers such as Comcast Corp., Dish Network Corp., and Charter Communications Inc. Some of the companies have already tapped the debt market to help pay the tab. The auction started in December and ended on Jan. 15 and the analysts’ estimates of $47 billion were exceeded within days before settling at $81.2 billion.
T-Mobile, along with the backing of its controlling stockholder, Deutsche Telekom AG, spent $9.3 billion for 142 licenses to build on an already-large holding of mid-band 2.5-gigahertz airwaves gained with the takeover of Sprint Corp. in April. In after-hours trading Wednesday, T-Mobile rose as much as 4.9% to $125.28 with Verizon and AT&T receiving little changed.
The extravagant spending in the bidding underscores how crucial these so-called mid-band frequencies are to companies trying to seize global leadership in emerging 5G technology. Also known as the C-band spectrum, this includes 500 MHz of spectrum between 3.7 and 4.2 GHz. It has also been put to use by satellite providers to deliver video programming to cable providers. About 200 MHz of the spectrum in this band will continue to be used for TV programming.
5G technology is the next generation of wireless service, expected to increase network speeds and make networks more responsive and the mid-band spectrum is considered important for 5G deployments. It offers both geographic coverage and the capacity to transmit large amounts of data. This combination has been found to be especially appealing to wireless giants who have been trying to fill out their spectrum portfolios.
“It is essential to America’s economic recovery that we deliver on the promise of next-generation wireless services for everyone, everywhere,” FCC Acting Chairwoman Jessica Rosenworcel said in a statement, according to CNET. “This auction reflects a shift in our nation’s approach to 5G toward mid-band spectrum that can support fast, reliable, and ubiquitous service that is competitive with our global peers.”