The US 5G license auction amount has reached 69.8 billion US dollars, breaking the historical record

The Federal Communications Commission (FCC) is conducting an auction of wireless licenses and has sold more than $69.8 billion worth of licenses after three weeks of bidding, setting a record and potentially changing the prospects for mobile phone operators for the next decade.

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The auction already exceeds the $44.9 billion the FCC raised in 2015 when it auctioned off mid-band spectrum licenses to bolster their 4G services. Today, the companies are investing tens of billions of dollars to build next-generation 5G networks that will speed up the flow of data to phones and other wireless devices, such as PCs, cars and industrial machinery.

The $69.8 billion bid has already exceeded Wall Street's highest expectations, suggesting that several companies are vying for the most valuable wireless licenses. The auction of 5G licenses began on December 8 and will be suspended during the Christmas holiday and New Year's Day until January 4 next year, when the total amount is likely to rise further.

Each bid is confidential until the auction process is complete. Analysts expect incumbents such as AT&T and Verizon Communications to bid up a large portion of the licenses to take on rival T-Mobile US Inc, which acquired Sprint's assets in February.

"Mid-band spectrum is where 5G is going," said Walt Piecyk, a telecom analyst at research firm LightShed Partners. He added that T-Mobile US's merger with Sprint "clearly puts pressure on Verizon and AT&T" to invest heavily in bidding for 5G licenses. "When the numbers get that big, it's reasonable to assume that all the companies are getting more aggressive," he said.

At the same time, mobile service providers also need to face competition from investment companies and new entrants. Satellite service provider Dish Network won many licenses in the 2015 auction, and the company issued $2 billion in convertible bonds this month to raise more cash to bid. Dish Network previously acquired some of Sprint's assets and gained about 8 million customers from it, and is currently building its own mobile network.

Cable Internet service providers, which have been experimenting with wireless service for years, could also influence the outcome of the auction. Comcast and Charter Communications, which spent nearly $1 billion in a smaller auction of licenses earlier this year, also joined forces to bid.

The FCC is auctioning licenses for spectrum between 3.7 GHz and 4 GHz, a mid-band spectrum that is ideal for 5G services.

The auction was so competitive that it will bring a windfall to the U.S. Treasury. After winning the license, the winning bidder will have 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 Louthan, an analyst at Raymond James, a Wall Street investment bank, said that given the low borrowing costs and relatively stable service revenue of mobile phone operators, they can afford the large expenses. He pointed out: "Investors view these companies as some of the safest companies. I don't think a slight change in debt ratio will make a big difference."

The FCC will not announce the winning bidder until a few days after the auction ends, which means the telecom industry may not get the suspense until February next year.