Record-breaking! US 5G license auction turnover has reached $69.8 billion

According to the Chinese website of the Wall Street Journal on the 24th, the ongoing wireless license auction of the Federal Communications Commission (FCC) has reached a record high of more than 69.8 billion US dollars after three weeks of bidding. This auction may change the prospects of mobile phone operators in the next decade.

The auction has surpassed the $44.9 billion raised by the FCC in 2015 from the auction of mid-band mobile phone licenses. At the time, U.S. mobile operators hoped to use mid-band licenses to strengthen their 4G services. Today, these companies are now investing billions of dollars in next-generation 5G services. The 5G standard is expected to speed up the transmission of data to wireless devices such as mobile phones and personal computers, cars and industrial machinery.

The report pointed out that the $69.8 billion bid amount has exceeded Wall Street's highest forecast, indicating that multiple companies are competing for the most valuable wireless rights. The 5G license auction will start on December 8 and will be suspended due to the Christmas and New Year holidays until January 4, 2021, when the total bid amount may be higher.

It is worth mentioning that the FCC will not announce the winning bidder until a few days after the auction ends, which means that the suspense may not be revealed until February next year.

Bids are confidential until the auction is over, and analysts expect incumbents such as AT&T and Verizon to take a large share of the licenses to compete with rival T-Mobile US Inc., a multinational mobile phone operator and a subsidiary of Deutsche Telekom, which acquired assets of Sprint, the fourth-largest U.S. wireless operator, in February.

The report quoted Walter Pichek, a telecom analyst at research firm LightShed Partners, as saying that mid-band spectrum is the direction of 5G development. The merger of T-Mobile US and Sprint "clearly puts pressure on Verizon and AT&T," forcing them to invest heavily in bidding for 5G licenses.

According to reports, the FCC is auctioning licenses for spectrum between 3.7 GHz and 4 GHz, which is a mid-band spectrum that is very suitable for 5G services. After winning the license, the winner will need to spend at least another $13 billion to help a group of satellite companies that are already using these frequency bands to modify their equipment.

Frank Lawson, an analyst at Wall Street investment bank Raymond James, noted that given the low borrowing costs and relatively stable service revenue of mobile operators, they can afford the large expenses.