Advanced Television

FCC auction disappoints with $427m

September 1, 2022

By Chris Forrester

The latest FCC auction for 5G spectrum, ended after 73 bidding rounds and generating $427.7 million in overall bids – which is widely less than expected. Pre-auction estimates had, from some experts, been predicted to reach $3 billion.

The auction (No. 108) covered the 2.5 GHz band and involved 7872 licences out of the 8017 on offer.

The pre-auction estimates put theoretical values of $0.10-$0.20 per MHz-POP. The actual amounts bid averaged less than 2 cents per MHz POP.

The FCC will issue its list of winning bidders in a few days, although T-Mobile is widely expected to have been a major bidder looking to fill gaps in its nationwide 5G cellular coverage.

Craig Moffett of MoffettNathanson in his comments on the result, said: “While we won’t know for sure who ‘won’ the licences in question for another week or so, it is universally assumed that T-Mobile was far and away the auction’s principal buyer. They are the only US company that uses 2.5 GHz spectrum (2.5 GHz is the backbone spectrum band of their 5G network), and the licences at auction were best seen as the ‘holes in the Swiss cheese’ of T-Mobile’s otherwise national 2.5 GHz footprint. There was a great deal of spectrum here for sale, but it wasn’t geographically contiguous, and thus it would be difficult for anyone other than T-Mobile to use it. Nor should one expect spectrum speculators to have played a large role; after all, if there is but one true exit – i.e., to sell to T-Mobile – then bidding more than T-Mobile was willing to pay would seem an ill-advised strategy. Usually, we refrain from using the term ‘winner’ when discussing auction results.”

Categories: Articles, M&A, Spectrum

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