Verizon, AT&T and T-Mobile spend nearly $80B on 5G spectrum auction
The FCC has announced the winners of a wireless airwave auction it conducted over the past few months which racked up a record $81B in bids. The mid-band spectrum, sometimes called the "Goldilocks band," is well-suited for 5G networks because it is able to transmit large amounts of data on a wavelength that can travel long distances. The 280-megahertz spectrum is also especially important to wireless giants who have been trying to fill out their spectrum portfolios.
The big winners? Verizon (NYSE:VZ) - via its Cellco Partnership subsidiary - bid nearly $45.5B on the airwaves. AT&T (NYSE:T) - through AT&T Spectrum Frontiers - bid $23.4B, while T-Mobile (NASDAQ:TMUS) bid $9.3B (it already acquired some mid-band through its merger with Sprint). The results were in line with industry expectations and reflect how important securing licenses for the airwaves is for the carriers.
"These record-breaking results highlight the demand and critical need for more licensed mid-band spectrum and demonstrate the importance of developing a robust spectrum auction pipeline," said Meredith Baker, CEO of CTIA (a trade group that represents the wireless industry). The bidders are still under a quiet period, so they are not permitted to comment publicly.
Outlook: The COVID-19 pandemic has shown just how critical our connectivity is given remote work and remote learning trends that have led to a boom in broadband-powered services. 5G will not only lead to eye-popping speeds, but more people can be on a network simultaneously with less drop-offs. However, performance of 5G remains dependent on the type of spectrum a carrier has available, with mid-band providing a strong combination of fast speeds and broad coverage.
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