Tepid demand, taxation fears drag at 2.5GHz spectrum auction for 5G

There appears to be very little interest in the FCC’s newest auction of midband spectrum for 5G, based on the results of Monday’s second round of bidding. Gross proceeds in the auction – dubbed Auction 108 by the agency – so far total around $108 million.

That figure is up just slightly from the $103 million in total first round bids placed on Friday, the first day of the auction. “Demand at the start of this auction is very tepid,” argued Sasha Javid, chief operating officer for BitPath, on LinkedIn after the first round of bidding. Javid has closely tracked previous FCC auctions, and maintains a detailed website for Auction 108.

As noted by Telecompetitor, most 2.5GHz spectrum licenses around the country did receive bids during the auction’s first round. However, more than half of the 8,000 licenses up for grabs received just one bid – an indication of relatively lackluster competition for spectrum.

The spectrum guessing game

That’s not necessarily a surprise though. Most of the licenses in the auction are relatively narrow geographically and spectrally, and are scattered throughout the country in primarily rural areas.

“It’s a queer collection of licenses, which makes estimating its value hard,” wrote the financial analysts at New Street Research in a note to investors over the weekend. They said they expect the auction to end in September with around $3.4 billion in winning bids, “with substantially all of the licenses going to T-Mobile.”

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