The Federal Communications Commission’s auction of 2.5 GHz overlay licenses wrapped up last week after about a month of bidding. Winning bidders have been announced, and as expected, T-Mobile US used the auction as a way to bolster its 2.5 GHz holdings at a steep discount compared to the prices that its competitors have paid in recent midband spectrum auctions.
Here are five highlights from the 2.5 GHz auction:
-Of the 8,017 licenses available, 98% of them sold: 7,872. The vast majority of those (7,156, to be exact) were won by T-Mobile US at a cost of about $304 million. The national operator acquired a vast swatch of spectrum holdings and leases in the 2.5 GHz band when it merged with Sprint, and it has used that spectrum as a key part of its 5G deployment strategy. This auction was expected to be dominated by T-Mobile US, and it very much was—and T-Mo rounded out its national midband spectrum footprint at a fraction of the billions that AT&T and Verizon have had to spend in recent auctions, in order to establish a national midband spectrum footprint for 5G.
-The auction raised more than $427 million in gross bids and around $419 million in net proceeds after bidding credits (again, most of that coming from a single bidder—T-Mobile US). This auction wasn’t expected to be a blockbuster on the order of the C-Band auction, given that many of the spectrum licenses on offer are encumbered, particularly in urban areas that typically drive big bids by the national carriers. However, it is by far the smallest-grossing of the midband auctions. The CBRS Priority Access License auction raised around $4.5 billion; the C-Band raised a record-smashing $81 billion in bids and the most recent 3.45-3.55 GHz auction raised a more-than-respectable $22.5 billion in bids.
-This auction was expected to be one in which T-Mobile could add to its holdings, but small and rural providers would also have a chance to pick up some midband spectrum without as much competition from national operators. It seems to have largely played out that way. Despite the dominance of T-Mobile US as a winning bidder, most of the field of qualified bidders came out of the auction with some spectrum. There was a field of 82 qualified bidders, and 63 of them walked away with licenses. The FCC says that 77% of those winning bidders qualified as either small businesses or entities which serve rural communities–by the nature of their businesses, then, those bidders were seeking local or regional spectrum rather than a national footprint. Most of those bidders (around 50) bought 15 or fewer licenses. Over the course of the auction, bidding activity was consistently elevated in the middle of the country, where most small providers are located.
“The successful auction of new flexible-use geographic overlay licenses ensures that this important mid-band spectrum will be used to its fullest potential by a wide array of service providers to bring service to all Americans, especially those in rural areas,” said the FCC in a statement.
-Other large operators besides T-Mobile US played minimally or not at all in this auction. Verizon won 12 licenses in nine counties and will pay a total $1.5 million. AT&T was a qualified bidder but won no licenses. Dish Network participated as Carbonate Wireless but also won no licenses. US Cellular won 34 licenses in 34 counties for a sum of about $3.5 million.
-The top five licenses winners based on total gross bids were T-Mobile US at $304.3 million; PTI Pacifica at $17.7 million; TeleGuam Holdings at $16.6 million; Evergy Kansas Central at $12.7 million; and Cellular South at $11.9 million. In terms of which companies won the most individual licenses, the top five were T-Mo with 7,156 licenses; the North American Catholic Educational Programming Foundation with 107; Evergy Kansas Central with 54 licenses; LICT Wireless Broadband Company with 46; and Broadband One of the Midwest with 42 licenses.
