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UBS Analyst: T-Mobile, Comcast will be Surprise Winners in Government Spectrum Auction

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According to John Hodulik, an analyst from financial services firm UBS, T-Mobile and Comcast will come out as the top two bidders in the Federal Communications Commission’s auction of radio spectrum. Hodulik is projecting that T-Mobile will be spending between $8 billion to $10 billion in order to acquire about 30 MHz of airwaves. As for Comcast, the cable TV company is expected to spend between $5 billion to $6 billion to get 20 MHz of spectrum. Together, T-Mobile and Comcast will be taking three-fourths of all the auctioned spectrum. Hodulik also predicts that Verizon, AT&T, and Dish Network will be grabbing 5 MHz of airwaves each in the auction.

The FCC will be announcing the results of the auction by mid-April. In February earlier this year, the agency had disclosed that bids topped $19.6 billion.

Hodulik pointed out how T-Mobile has been historically less competitive in rural markets in the United States. But if the major wireless carrier manages to acquire 30 MHz of low-band airwaves from the auction, it should be able to close the performance gap with the leaders and likely increase the level of competition across America. UBS also says that industry leaders Verizon and AT&T were not likely to bid aggressively. Last Thursday, AT&T was named the official winner of the FirstNet contract for building a nationwide mobile public safety network.

As for Comcast, it makes no secret of its plans to start offering mobile services before the end of this year, leveraging an MVNO agreement it had struck with Verizon. Hodulik, however, predicts that the cable TV company will likely not make an aggressive move to go into the wireless business until the level of competition abates, possibly through industry consolidation.

It was in late 2011 that Comcast, as well as Time Warner Cable and Bright House Networks, sold airwaves worth $3.6 billion to Verizon. According to some industry watchers, Comcast could leverage the new airwaves it acquired in order to renegotiate its MVNO agreement with Verizon.


Source: FierceCable

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7 comments:

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  1. So Tmo will add coverage while Comcast plays fourth-dimensional chess, but I still don't think Xfinity Wireless will be competitive due to Comcast's habit of overcharging consumers.

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  2. Interesting news indeed. T-Mobile should buy out DISH to get the rest of low spectrum and the mid-spectrum that DISH holds and Comcast should go after Sprint. Comcast should be able to get a good price on Sprint since it might have to spend more money to upgrade further the network.

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  3. THIS IS WHAT TMOBILE HAS NOT HAD THAT HAS MADE IT LOOSE THE indoor reception BATTLE.

    If TMO gets this, then there will be three major carriers that have excellent indoor coverage and prices should fall.

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    1. The 700 MHz spectrum works 4X better in buildings, extends twice as far from each tower, and is deployed to >350 markets now. 272M people can use it with a Band 12 device. They are in the middle of adding 11M from Janesville, WI across Chicago Metro area to Gary IN, using the 700 MHz they bought from LEAP. The 600 MHz will take a while to deploy, and they will have to get new handsets out.

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  4. It seems Verizon is moving onto the next generation of call and data performance with their money: http://launch.newsinc.com/share.html?trackingGroup=90470&siteSection=90470_pp&videoId=32025553
    These auctions are most likely going to be yearly so this is not that big a deal

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    1. Yearly?
      So if someone wins, and then invests in the infrastructure, they can possibly loose the rights to use it afterwards?
      So why would anyone bid for this?

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    2. We don't know whether FCC will conduct yearly spectrum auctions. Since 1994 they conducted 87 auctions, an average of one each quarter. The excessive TV spectrum auction was delayed for a long time.

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