Bids in the C-Band spectrum auction, which makes available 280 megahertz of prime mid-band spectrum in the 3.7-3.98 GHz band, have surged far beyond what anyone expected. New Street Research, for one, estimated bids would total between $46 billion and $52 billion.
“The C-Band auction has obliterated records for funds raised in a spectrum auction,” wrote Jonathan Chaplin, New Street communications services: U.S. team head. “It has humiliated analysts’ estimates. It has exceeded what we thought the major participants had in available resources.”
The C-Band auction is now forecast to bring in eye-popping proceeds between $73 billion and $80 billion, according to New Street. What’s more is T-Mobile is projected to maintain its lead in spectrum, even though Verizon will purchase more frequencies.
“The big surprise on prices lend strong support for our framework for anticipating market share shifts over time,” Chaplin wrote. “If our new forecast is correct, T-Mobile is very well positioned to take share from Verizon and AT&T; they have a powerful network advantage today, and they may extend it.”
New Street Research projects Verizon to win 100 megahertz for $32 billion; AT&T to win 50 megahertz and T-Mobile to win 65 megahertz; Dish Network to win 20 megahertz and cable to win 20 megahertz.
“Carriers can’t overspend in the auction,” Chaplin wrote in a research note. “The more spectrum they win, the better off they are. Verizon ought to win the most spectrum, narrowing their gap with T-Mobile and buying valuable time; however, T-Mobile will likely maintain a powerful near and long-term advantage.”