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If you were looking for surprise winners out of the blockbuster 4G spectrum auction that ended Thursday, then you’ll likely be disappointed. Only four operators paid more the $1 billion for their licenses and they’re the ones everyone expected to win: AT&T, Verizon, Dish Network and T-Mobile.
According to the auction results released by the FCC on Friday, [company]AT&T[/company] spent the most racking up $18.19 in bids for these Advanced Wireless Services (AWS) airwaves, while [company]Verizon[/company] came in second, spending $10.43 billion. The upstart in the auction, [company]Dish Network[/company], bid $9.99 billion through its two auction entities SNR Wireless and NorthStar Wireless. If there was a surprise in this auction, it was how little [company]T-Mobile[/company] spent: only $1.77 billion.
Though the auction closed with $44.9 billion in total bids, that overall amount was adjusted to $41.3 billion because of discounts applied mainly to Dish Networks’ bids.
AT&T took the most expense license for $2.77 billion in metro New York and Verizon grabbing its Los Angeles equivalent for $2.06 billion. After those top two markets though, you see a three-way race for airwaves between Ma Bell, Big Red and Dish, as all three aggressively went after in the big metropolises like Chicago, San Francisco, Boston and Washington, D.C., as well as the remaining licenses in NYC and LA. Half of the total spending in the auction went to 15 individual licenses even though there were 1,611 total licenses on the block.
Meanwhile T-Mobile seem far more targeted in its license selections – or it just wasn’t ready to pay the high prices asked. Its most expensive license was for the Houston area, costing $263 million. It also picked up strategic licenses in places like Miami, Phoenix, San Antonio, Austin, Indianapolis, Cleveland and New Orleans.
AT&T, Verizon and T-Mobile already have LTE networks in the AWS band so they’re likely planning to use that spectrum to augment their current networks. Dish, on the other hand, has no network at all. It plans to repurpose some of its satellite spectrum for 4G use, and its auction winnings will complement those holdings nicely. The question is whether Dish really plans to become a carrier. It could partner with another carrier like Sprint or T-Mobile to build a network, sell its spectrum or just squat on it to see if it increases in value.
If Dish does choose to squat on its airwaves, it would be particularly shameless considering it just got a steep discount at the auction. As BTIG wireless analyst Walter Piecyk points out, Dish won all of its licenses through its two affiliates NorthStar and SNR, both of which qualify for what’s known as designated entity status. DE status is a kind of “poor carrier” classification that gives a bidder a 25 percent discount on any winning bid. If Dish had bid on its these licenses directly it would have wound up paying $13.3 billion, not $10 billion.
This post was updated several times Friday with more auction details and analysis.