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AT&T top buyer at U.S. airwaves auction; Verizon, Dish spend big

January 30, 2015, 11:40 PM UTC
The signage for an AT&T store is seen in New York
The signage for an AT&T store is seen in New York, October 29, 2014. The U.S. government sued AT&T Inc on Tuesday, alleging the No. 2 U.S. wireless carrier sold consumers unlimited data plans but would reduce their Internet speeds once they exceeded a certain amount of data. REUTERS/Shannon Stapleton (UNITED STATES - Tags: BUSINESS TELECOMS) - RTR4C3YS
Photograph by Shannon Stapleton — Reuters

(REUTERS) — AT&T Inc spent close to half the total in the record-setting U.S. sale of airwaves for mobile data, with Verizon Communications Inc and bidding partners of Dish Network Corp also spending heavily, results showed on Friday.

AT&T (T) bid a total of $18.2 billion to win licenses of so-called AWS-3 spectrum; Verizon (VZ) bid $10.4 billion and T-Mobile US Inc (TMUS) bid $1.8 billion, according to the results released by the Federal Communications Commission.

The record $44.9 billion auction, which ended on Thursday, demonstrated the voracious appetite of wireless carriers and other companies for spectrum, which has become a prized commodity as companies race to satisfy the growing consumer demand to stream video and other data-guzzling content.

Dish (DISH) itself did not win any licenses, but it had joint bidding agreements with SNR Wireless LicenseCo LLC and Northstar Wireless LLC, in which it has indirect ownership interests. Those two companies bid a total of $13.3 billion, but had applied to receive a discount as small-business entities, bringing their net bid amount to $10 billion.

As biggest bidders, AT&T, Dish’s partners and Verizon snapped up airwaves in some of the most coveted and expensive markets, such as New York and California.

Dish’s bidding significantly exceeded expectations, said MoffettNathanson analyst Craig Moffett, adding that it put a damper on the investors’ hypothesis that the satellite company had expected to turn around and sell the newly acquired airwaves to Verizon or another buyer.

Dish’s shares fell 1.2 percent in afternoon trading, to $72.57.

Verizon and AT&T bid less than what some analysts had estimated. Verizon shares were relatively unchanged at $46.42 and AT&T shares were up 1.2 percent at $33.36.

Dish acknowledged in a statement it had invested in two entities that participated in the auction but did not further explain its plans, citing FCC anti-collusion rules.

Verizon said in a statement it bought a total of 181 licenses that cover markets reaching 61 percent of the United States. AT&T was awarded 251 licenses, while T-Mobile bagged 151 licenses.

AT&T’s debt leverage may rise given its AWS-3 spectrum investment, it said in a statement.

“The company will use excess cash – after paying its dividend – over the next three years to pay down debt, and expects to return to historical debt ratios,” it added.

Sprint, the third-largest U.S. carrier, skipped the AWS-3 auction.