The Future of 5G Will be Shaped by the Mid-Band Spectrum Bidding War

As 5G continues to make strides in developing and implementing technologies for mainstream adoption, we’re actively monitoring and anticipating the industry moves. One of the trends we’ve been tracking is the upcoming announcement for 5G spectrum bidding, which is at a staggering $81 billion (FCC predicted last summer this number to be between $20-$30 billion). The 5G Mid-Band spectrum auction is one of the most important because it enables Carriers to broadcast on more ubiquitous and faster 5G frequencies vs. mmWave. According to a recent CNBC article, the winners are set to be announced in the coming weeks. 

As a brief background to spectrum bidding, in order for wireless carriers to transmit data through certain spectrums, they need to have licenses in order to operate within that band. With the bulk of 5G in the Mid-Band spectrum, nearly all of the major telecom carriers (Verizon, AT&T, and T-Mobile) are on a level playing field in that they all need additional spectrum in this range. Whichever company wins the bidding war will be able to get a head-start on building out a faster, more robust 5G network, changing the dynamics of the telecom industry. 

As a leader in wireless connectivity and emerging 5G technology, Broad Sky has been following these developments closely. Based on the history of all the main ISP’s jockeying for 5G position, below are a few thoughts on how we believe the bidding will shake out:

  • The recent auction results are crucial for gaining Mid-Band Spectrum to accelerate the Carrier’s 5G strategies. 
  • Verizon needs the most spectrum in this range.  Previously, they were focused on mmWave in densified areas (Stadiums, Event centers, etc) which made sense at the time, but then the global pandemic hit.  Verizon will pivot to gain more Mid-Band spectrum.
  • AT&T also needs Mid-Band Spectrum but they had to scrape together capital.  Was it in time and enough? 
  • T-Mobile, through the Sprint acquisition, gained around 100MHz of Mid-Band 2.5GHz, so they will not require as much as Verizon and AT&T. Other assets aside, just looking at spectrum as cost, T-Mobile paid roughly $265 Million per Mhz in the acquisition. The current C-Band auction equates to a higher cost at roughly $289 million per MHz. Although T-Mobile is in a leadership position in current Mid-Band spectrum holdings, we expect that they will be a significant bidder in this auction —if nothing else to drive up costs for the other two.
  • Dish’s 5G strategy is unique. Unlike the other Carriers, Dish did not have an existing 4G network and can build a 5G network from the ground up.  Currently, Dish holds Mid-Band Spectrum licenses and some mmWave. Because the FCC requires Carriers to utilize their licensed spectrum, and DISH is early in their 5G network build-out, they are loaning unused spectrum to the major Carriers.  The question becomes, “What happens when they want the spectrum back?” 
  • Other cable companies are spanning into LTE offerings via direct or partnerships.  It will be interesting to see how much spectrum they bid on in the current auction. Though it’s not over yet, we speculate that T-Mobile and Verizon will be vying for the top 5G position, moving AT&T down to #3.

Broad Sky anticipates the FCC will announce the auction winners in Q1 or Q2 of 2021.

Broad Sky + 5G Industry Moves in the Short-term on the hardware front: 

In the enterprise space, the hardware and chip manufacturers are focused initially on Mid-Band 5G. The consumer and Carrier marketing strategies are predominantly focused on mmWave. In Q1 2021, leading manufacturers such as Cradlepoint and Peplink are rolling out Mid-Band, 5G-enabled hardware combined with higher category 4G LTE modems. This strategy enables enterprises to adopt a wireless strategy that can access 4G LTE and 5G where it is available.    

‘The equipment manufacturers plan to have Carrier certifications completed by the end of Q1 2021 with availability to the enterprise sector in Q2. Broad Sky is actively working with the manufacturers to test the design and hardware and provide performance metrics to the manufacturers. 

To learn more about Broad Sky’s work in 5G and other next-gen wireless connectivity solutions, we invite you to visit our LinkedIn page, or connect with Beau Barker, VP of Technology at Broad Sky, to get started today!