Analysts warned high prices in a US auction of C-Band spectrum (3.7GHz to 4.2GHz) could spell bad news for operators, as the tally from the ongoing sale climbed well beyond $75 billion.
Bids hit $76.5 billion after 50 rounds, more than doubling the $30 billion in spending Wells Fargo Securities analysts expected and beating the $45 billion forecast by MoffetNathanson.
Craig Moffett, a senior analyst for the latter, flagged the auction tally as worrisome in a research note, arguing operators would “necessarily suffer lower returns as a result of having paid more than expected for spectrum that will generate no more revenue than expected.”
He warned the massive investments made in the sale “risk displacing the capital investment needed to put the acquired spectrum to use” and, in a worst-case scenario, “financially destabilising one or more players.”
However, analysts at Lightshed Partners disagreed, asserting the steep prices would not negatively impact capex but instead increase pressure on “any high bidder to build more quickly to secure a return on this investment.”
The sale began 8 December, with a total of 280MHz of spectrum and 5,684 licences in play. Moffett tipped the proceeding to wrap and winners to be announced by “early February.”
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