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Analysts: US Carriers Could Bid $33 Billion in Spectrum Auction

January 14, 2016 - Written By Alexander Maxham

There’s been a lot of talk of the upcoming spectrum auction that’s set to take place pretty soon. The FCC is going to be auctioning off the 600MHz spectrum, that was once used by TV broadcasters, and in a few years it’ll be used by wireless carriers. This spectrum is like gold to carriers. Simply because it is low-band spectrum, which is better for coverage – especially indoor coverage – and it means carriers can use less towers and cover more area. T-Mobile has been very adamant that they want plenty of 600MHz spectrum. Since they have the least amount of low-band or sub 1GHz spectrum in their portfolio, they could stand to gain the most from it.

Sprint has already stated they are going to be sitting out of this auction, and Verizon seems pretty luke warm to the incentive auction. Now it appears that the auction could only bring in about $33 billion in total. This is primarily due to the current price war going on with the four major carriers, as well as the growth in the industry dying down. The FCC was expecting the auction to bring in around $45 billion, and even one broadcaster had much higher expectations. Around $84.9 billion. According to the analysts, it looks like AT&T might spend the most, at around $10.6 billion, followed by T-Mobile at $8 billion, Verizon at $6.2 billion, and Dish at $4.7 and “others” making up the remaining $3.6 billion. In that other category, analysts believe Comcast, Charter Communications and American Movil might bid in the auction.

In 2015, the FCC held the AWS-3 auction, in which nearly $45 billion was spent by the carriers, for more spectrum. Given the spectrum up for auction in this Incentive auction, many would think that the carriers would be willing to spend more. But these days the carriers don’t have the kind of cash sitting around that they used too. Thanks to carriers like Sprint and T-Mobile becoming very competitive with AT&T and Verizon in the past few years, profits have started to dwindle, and thus there’s not much left for buying spectrum. Nevertheless the spectrum auction is going to be one to watch. If T-Mobile can pick up a good amount of 600MHz, we could see a whole new industry in the next few years with plenty more competition.