Verizon, AT&T spend the most at latest 5G airwave auction

March 12, 2020, 6:30 PM UTC

Verizon and AT&T spent the most money at the latest federal 5G airwave auction that brought in nearly $8 billion in total proceeds, the U.S. government disclosed on Thursday.

The amount spent signals strong demand for the superfast wireless technology, the successor to today’s 4G mobile networks. After two relatively tepid auctions for similar airwaves in the past few years, analysts had expected total bids of only $2 billion to $4 billion.

Verizon spent the most in the latest auction, with winning bids totaling $3.4 billion, followed by AT&T at $2.4 billion, and T-Mobile at $932 million. No other bidder spent more than $307 million.

The Federal Communications Commission sold more than 14,000 individual licenses to 28 different bidding companies for rights to offer 5G service in metro areas nationwide.

The high-frequency bands, known as millimeter wave, don’t travel very far—only a few city blocks from cell sites, in many cases—but they can carry a huge amount of data. Downloads in the bands available today can approach 2 gigabits-per second, fast enough to download an entire movie almost instantaneously.

The Federal Communications Commission disclosed last month that the highest bids were for the biggest cities, with almost $1 billion for airwave rights in New York City, over $700 million for Los Angeles, and about $350 million for Chicago.

Currently, AT&T and Verizon offer 5G to consumers in parts of a few dozen cities each, while Sprint offers the service in only nine cities. Meanwhile, T-Mobile provides what it describes as nationwide 5G coverage, reaching areas where about 200 million people live, but at speeds only slightly faster than 4G networks.

Over the next few years, carriers plan to quickly expand their 5G networks and need more spectrum rights to do so.

One wrinkle in the auction procedures may have inflated the bids somewhat. AT&T and Verizon already own some licenses in the 39 GHz band, one of those up for bid. Under the FCC’s rules, the carriers were entitled to some of the auction proceeds for surrendering those existing licenses to be sold. In the end, AT&T will collect about $1.2 billion for licenses it sold while Verizon stands to garner $1.8 billion. Taking into account all of the returned funds, winning bidders will only end up paying the government $4.5 billion, about what analysts anticipated.

Top bidders in the FCC’s latest 5G auction:
1. Straight Path/Verizon $3.417 billion
2. FiberTower/AT&T $2.379 billion
3. T-Mobile $932 million
4. High Band License/Columbia Capital $307 million
5. Window Wireless/Dish Network $203 million
6. US Cellular $146 million
7. ATI Sub/Sprint $113 million

More must-read stories from Fortune:

—Google Doodle celebrates International Women’s Day
—Growing coronavirus threat weighs on Apple
—When will PlayStation 5 and Xbox Series X debut?
NASA hiring new astronauts for the first time in four years
—WATCH: Best earbuds in 2020: Apple AirPods Pro Vs. Sony WF-1000XM3

Catch up with
Data Sheet, Fortune’s daily digest on the business of tech.

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward