TMUS T Mobile US Inc

By Drew FitzGerald 

AT&T Inc., Verizon Communications Inc. and T-Mobile US Inc. were the biggest spenders on a pair of Federal Communications Commission auctions designed to spark investment in next-wave 5G networks, according to results released Monday.

The auctions covered two swaths of wireless spectrum at frequencies once considered too extreme for cellphone service. FCC Chairman Ajit Pai has made those frequencies a cornerstone of his strategy to spur 5G investments.

Bidding across both auctions totaled less than $3 billion, compared with nearly $20 billion raised in a previous FCC auction that freed up frequencies used by local television broadcasters for cellphone use.

Verizon led spending on the first auction around 28 gigahertz after it bid $505 million. The leading cellphone carrier by subscribers was expected to focus on that auction to fill in gaps in the more than $3 billion worth of licenses it had already bought through private purchases.

AT&T spent the most on 24 GHz licenses, bidding $983 million. It was followed by T-Mobile, which bid $803 million in the auction. Midwestern carrier US Cellular Inc. also earmarked cash for licenses in its service area and won $129 million and $127 million worth of spectrum in the 28 GHz and 24 GHz auctions, respectively.

Analysts expect the telecom companies to follow up their spectrum purchases with heavy investments in wireless infrastructure. The airwaves are considered useful for new 5G networks that promise to make cellphone connections zippier and home broadband more affordable, assuming phone companies are able to offer new internet service at prices that are competitive with cable.

The earliest U.S. 5G networks are still unproven, however, and some companies' construction has met opposition from residents annoyed by more visible antenna systems.

Some weather forecasters are also opposed to commercial activity at an extreme edge of the 24 GHz range, which they say is too close to the frequencies their satellites use to predict severe weather.

The auction's conclusion could also shake up the telecom sector by allowing more companies to hold merger talks, according to New Street Research analyst Jonathan Chaplin. FCC rules designed to prevent coordinated bidding in the auctions had the side effect of discouraging acquisition discussions. Mr. Chaplin said in a research note that companies are freer now to "wheel-and-deal until the run up to [the] next auction, which begins on December 10th."

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

(END) Dow Jones Newswires

June 03, 2019 20:29 ET (00:29 GMT)

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