C-Band Prices are Robust, But Not as High as AWS-3 Mid-Band Prices

Mobile operators always are wary of overbidding for spectrum rights, recalling the high prices paid for 3G spectrum in Europe, for example, which nearly bankrupted the auction winners. On the other hand, spectrum assets can be quite strategic, as facilities-based competition leadership without adequate spectrum resources is impossible.  

The robust bidding for 280 MHz of C-band spectrum is an indication of the importance mobile operators place on mid-band assets. T-Mobile’s purchase of Sprint likewise was driven in large part by access to the trove of mid-band spectrum Sprint possessed. 

Spectrum prices in the recent CBRS auctions (also of new mid-band spectrum) generated average prices per person (per MHz-POP) of about 21.6 cents. The C-band auction already has average prices of about 79 cents per MHz-POP, higher when including the additional clearing payments to existing licensees. Including those payments, we already have hit about 95 cents per MHz-POP in the C-band auction.

Prices for the A block of frequencies, which it is estimated can be put into commercial use as much as two years earlier than the BC block, are running higher. After the end of round 44 of bidding, A block licenses were at an average of $1.21 per MHz-POP, with a price of $1.54 including the cost of clearing existing users from the spectrum. 

The robust bidding for 280 MHz of C-band spectrum is an indication of the importance mobile operators place on mid-band assets. T-Mobile’s purchase of Sprint likewise was driven in large part by access to the trove of mid-band spectrum Sprint possessed. 

 source: Sasha Javid

The point is that it now appears C-band assets are of the strategic type, based on bid prices. T-Mobile arguably has little need for additional mid-band spectrum, but Verizon and AT&T obviously do need mid-band assets badly. Other bidders such as the cable companies and Dish Network have needs, but arguably not to the extent of Verizon and AT&T. 

What remains unclear is whether the C-band auction prices will top the AWS-3 auction of mid-band spectrum held in 2015, when prices reached $2.90 per MHz-POP, on average. At least so far, prices do not seem in danger of reaching levels that might be deemed excessive.