The Future of 5G Based on the Spectrum Bidding Results

A few weeks ago we wrote a blog post, “The Future of 5G Will be Shaped by the Mid-Band Spectrum Bidding War,” that took a hard look at the upcoming 5G Spectrum auction and, based on our perspective, shared thoughts and predictions on how we thought things would shake out with the major industry telecom players. 

As a refresher, below are the top-line highlights on how we thought the pieces would fall:

  • Verizon needed the most spectrum in this range; they were historically focused on mmWave.
  • AT&T needed Mid-Band Spectrum but they had to scrape together capital – was it in time and enough?
  • T-Mobile required the least amount of Mid-Band Spectrum, based on their acquisition of Sprint. 

On Wednesday, February 24, the FCC finally announced the winners of the auction. The bidding ended at $81 billion, which is much higher than the FCC originally projected ($20-$30 billion). Below are the results of the top license winners:

  • Verizon: 3,511 licenses
  • AT&T: 1,621 licenses
  • United States Cellular: 254 licenses
  • T-Mobile: 142 licenses
  • Canopy Spectrum: 84 licenses

Broad Sky’s Analysis

The results, for the most part, are in line with what we projected, with a couple of surprises. 

  • Verizon led the pack, spending $45 billion to become the leader in the race for 5G. We knew they had money to spend and they didn’t disappoint. 
  • We were a bit surprised to see AT&T as the runner-up—it appears like they were able to get the capital together and make a competitive bid ($21 billion).
  • United States Cellular licenses keep them in the game as a Tier 2 provider in 5G.
  • T-Mobile was in line with what we had predicted. Based on their Sprint acquisition, they didn’t need a lot. 
  • It is interesting to see investors, like Canopy Spectrum, among the 5G auction winners as they don’t have networks to deploy on. It will be interesting to see if they plan to resell spectrum to the carriers or what other strategies they may have.
  • Additionally, we were surprised to see that Charter/Comcast didn’t get much, if anything, based on Canopy’s 84 licenses (the FCC didn’t share winners outside of the top-5). We thought they would move to buy 5G spectrum to build their own networks.

It’s also important to note that the five satellite providers – Eutelsat, Intelsat, SES, Star One, and Telesat – have agreed to vacate their spectrum in order to receive incentive payments of up 

to $9.7 billion. The FCC has secured commitments from all five of these providers. This process enables the FCC to make C-band spectrum (3.7Ghz band) available for 5G more quickly. 

We expect to see more spectrum become available to the License winners as the Satellite providers transition to 4 Ghz from the C-band. 

Broad Sky continues to analyze the data to determine how much spectrum per location will be deployed by the Carriers who participated. From this data, we hope to draw a model that will represent 5G coverage to be deployed on C-Band – in particular, underserved and rural markets beyond the major Metros.

This is just the beginning of the race to 5G, and we’ll continue to actively monitor and share our perspective on industry news and trends, and how it translates to the future of this technology.

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!