Top Three US mobile networks bid $78B on 5G airwave licensing

Top US carriers Verizon, AT&T and T-Mobile were the winners of an $81 billion auction for highly coveted 5G airwaves.

According to the research data analyzed and published by Sijoitusrahastot, the three mobile carrier network companies spent a cumulative $78.2 billion on bids and accounted for 90% of auctioned licenses.

Based on data from Evercore, Verizon’s total mid-band spectrum following the auction would be 192 MHz. Comparatively, T-Mobile’s spectrum is 301 MHz and AT&T’s, 167 MHz.

US Big Three Carriers’ Capex was 55% of Expenditure on Mid-Band Spectrum

Verizon placed the top bid of $45.45 billion through its Cellco subsidiary. AT&T was second with $23.42 billion while T-Mobile was third with $9.34 billion. Other top bidders were US Cellular with $1.282 billion and New Level II with $1.277 billion.

Verizon took a total of 3,511 licenses, representing 56% of the total 5,684. AT&T took 1,621 licenses or 29% of the total while US Cellular took 254 licenses and T-Mobile got 142 licenses. All bidders spent a total of $80.9 billion on the auction against an expected $20 billion to $30 billion.

Verizon secured two loans worth a total of $25 billion in order to place its winning bid. AT&T borrowed a total of $14 billion from a group of banks. T-Mobile already had licenses acquired during its $26 billion purchase of Sprint in April 2020. According to Evercore analysts, if Verizon had purchased all the available spectrum, it would only have surpassed T-Mobile’s holdings by 16%.

Overall, the three carriers’ collective capital expenditure (capex) for 2020 was 55% of the amount they spent on the auction. AT&T had a $15.6 billion capex, reporting $171.8 billion in revenue. Verizon’s capex was $18.2 billion and its revenue for the year was $109.9 billion. T-Mobile had an $11 billion capex and it reported $68.4 billion in revenue.