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AT&T Expected to spend $22 Billion in the AWS-3 Auction

January 23, 2015 - Written By Alexander Maxham

The big AWS-3 Auction is set to take place this year. This is the auction that T-Mobile and Sprint really need to win. But it looks like AT&T and Verizon aren’t giving up without a fight. It looks like AT&T is going to be spending around $22 billion in this auction. According to AT&T’s disclosure that it entered into credit agreements worth more than $11 billion. Which means AT&T may end up buying more airwaves than Verizon. Not that either of these carriers really need it. But it’s there for the taking.

New Street Research analysts wrote in a research note following these agreements that AT&T has about $21.8 billion of liquidity and it will likely spend the “vast majority” of that on spectrum in this auction. Stating “We believe AT&T is raising capital to fund spectrum purchases; however, they will also need $15 billion to close the DirecTV transaction which they expect to do in May.” These analysts had previously assumed that the big two – AT&T and Verizon – would spend around $15 to 20 billion each in the auction, with 65MHz and 50MHz spectrum is up for grabs. These analysts also thought that T-Mobile – the fourth largest carrier – would spend about $2-3 billion and Dish Network would spend $2-6 billion.

This auction is going to continue until there are no new bids or waivers in a given round. The latest auction round, round 280, there were only 12 new bids. The total amount in provisional winning bids has reached up to about $44.87 billion. Once the bidding in the auction ends, the commission will then issue a new public notice declaring the auction is complete. The FCC will also then identify the winning bidders, as currently the bids are anonymous. We should know who gets the spectrum by mid to late February. And it’ll definitely be interesting to see

So it looks like AT&T is going all in this time around. Which isn’t a bad thing for their customers. It’ll be interesting to see who gets the spectrum from this auction.