T-Mobile Scores in Airwave Auction

The FCC has just concluded auctions for nearly 1,100 spectrum licenses, and T-Mobile looks to have come up winners, with Verizon and cable operators also scoring gains.

The Federal Communications Commission has concluded a spectrum auction originally opened on August 9, 2006 (PDF), and the big winner for the newly-available bandwidth looks to be number four U.S. mobile operator T-Mobile, which won some 120 licenses with bids totallying almost $4.2 billion. The bandwidth offered by the new spectrum licenses in the 1,710 to 1,755 MHz range will enable the company to offer next-generation data services to its subscribers, and make it a likely target for partnerships with other U.S. mobile operators looking to offer 3G mobile services to subscribers in T-Mobile’s newly-acquired turf.

Also coming out ahead in the spectrum auctions: wireless operators Verizon Wireless and Cingular Wireless, as well as SpectrumCo LLC, a consortium of U.S. cable operators (including Time Warner, Comcast, and Cox Communications) and Sprint Nextel. Coming out behind: satellite television operators DirecTV and EchoStar, who dropped out of the bidding after a few days, despite making a splash with an enormous initial deposit.

Some of the licenses offered for auction include allocations currently being used by government agencies; it may take three to four years before all the allocations are available for use by the new licensees. The cost of moving the agencies out of the spectrum—roughly $1 billion—will be covered by the proceeds of the auction, which totaled some $13.9 billion in gross bids, although many of the bidders qualify for bidding credits of up to 25 percent as small business entities, so the total money collected by the FCC will probably be in the $13.7 billion range. The auction reserve was just $2.06 billion.

Winning bidders must make down payments on their licenses within ten business days.