Verizon is spending nearly $1.9 billion to catch up on 5G spectrum, as the biggest carriers race to roll out higher-speed connections nationwide. This morning, the Federal Communications Commission revealed the winners of an auction for licenses to valuable spectrum that’s especially useful for 5G. Verizon was the biggest spender by far. Dish came in second, spending $912 million. Charter, Comcast, and Cox all spent hundreds of millions on spectrum as well.
Companies spent big on this auction because the spectrum, in the 3.5GHz band, can be used for higher-speed 5G deployments. Verizon, in particular, has been in a tough spot: its 5G strategy so far has largely relied on millimeter-wave deployments. Those offer the highest-speed connections, but they only work at extremely short ranges — so it doesn’t really work as a nationwide strategy. The midband spectrum that Verizon gained access to from this auction will help it deploy higher-speed connections that can span a longer distance (though not as long of a distance as the spectrum it uses for LTE).
As for Dish, it’s been buying up spectrum for years, but it finally needs to put that spectrum to use. The company acquired assets from Sprint (as part of its sale to T-Mobile), and it’s in the process of launching what is supposed to be a nationwide mobile network.
It’s less clear what Charter, Comcast, and Cox plan to do with their spectrum, but there are a couple of possibilities. Charter and Comcast offer mobile phone service, but they piggyback off of bigger networks. Midband spectrum could also be used to wirelessly deliver at-home internet service.
T-Mobile has been rapidly expanding its 5G network, and as of July, AT&T claims its 5G network is available nationwide. While T-Mobile is now in a good spot, thanks to Sprint’s cache of midband spectrum, the company has previously had to make huge bids to catch up in the airspace race. It spent nearly $8 billion in 2017 to better build out its LTE network.