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Low Bids by T-Mobile, High by Dish, Surprised in 3.45 GHz Auction

The biggest surprises in the 3.45 GHz auction were that Dish Network came in relatively big and T-Mobile small, according to the early analysis of the results, which were released Friday (see 2201140040). Verizon dropped out of the auction, after dominating the C-band sale, as expected (see 2111170037).

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AT&T bid $9.1 billion, Weminuche, a Dish entity, $7.3 billion, and T-Mobile $2.9 billion. Columbia Capital’s Three Forty-Five Spectrum bid $1.4 billion and UScellular $579.6 million. AT&T bought the most licenses in total, at 1,624, followed by Dish (1,232) and UScellular (380).

Other larger bidders included Grain Capital at $375.7 million and Canopy’s Cherry Wireless at $236 million. There were relatively few bids by small and rural carriers. Among those that did bid were Skylake Wireless, Nsight Spectrum, Horry Telephone Co-op, Blue Ridge Wireless, Carolina West Wireless and Agri-Valley Communications.

Dish spent more than expected, and AT&T a smidge less,” MoffettNathanson’s Craig Moffett told investors: “In rank order and in magnitude, the numbers were relatively close to expectations. … The remainder went to U.S. Cellular, and to what is by now a relatively familiar list of private equity investors.” Moffett warned that while “we’ve gotten almost numb to the numbers associated with spectrum acquisition in the U.S.,” the spending is significant. Dish’s bids translate into two years of EBITDA, he said.

With the exception of a small 2.5 GHz auction (whose winner many consider predetermined), we now know all the holdings in the upper mid-band spectrum bands that we think will dominate 5G for the next several years,” New Street’s Jonathan Chaplin told investors. Through 2023, “the T-Mobile spectrum advantage is daunting,” the analyst wrote. “On top of T-Mobile’s time-to-market advantage, for the next two years, T-Mobile has access to more upper mid-band spectrum than all of their competitors combined.”

New Street had predicted bids by AT&T of more than $10 billion, T-Mobile $7.9 billion and Dish $4.9 billion, with Verizon at zero. It saw the Dish and T-Mobile bidding as the biggest surprises.

Dish Chairman Charlie Ergen “saves the FCC from an auction that [Verizon] tried to kill,” tweeted spectrum consultant Tim Farrar.

Verizon and AT&T both took ratings hits after Verizon bid $45 billion, plus transition costs, and AT&T $23.4 billion in the C-band auction (see 103040034). The two hope to start turning on those licenses this week.

Based on the new figures, bidders spent about $600 million in the assignment phase of the auction as they competed for band assignments. The FCC disclosed $22.5 billion in combined gross proceeds for the clock and assignment phases, compared with $21.9 billion after the clock phase. Down payments by bidders are due 6 p.m. EST Jan. 30, and final payments 6 p.m. Feb. 14.

Today’s 3.45 GHz auction results demonstrate that the Commission’s pivot to mid-band spectrum for 5G was the right move,” said FCC Chairwoman Jessica Rosenworcel: “I am pleased to see that this auction also is creating opportunities for a wider variety of competitors, including small businesses and rural service providers. This is a direct result of the Commission’s efforts to structure this auction with diversity and competition front of mind.”