Bidding activity has slowed dramatically in the FCC's ongoing auction of midband spectrum licenses for 5G. And that means the auction could soon come to a close.

After that, most expect the auction's winners to start opening up their checkbooks – in a big way.

However, based on surprisingly strong late-stage bidding, there's still some debate about where the Andromeda auction will ultimately end. Roughly a week ago, the financial analysts at Raymond James predicted the auction would end at around $21 billion in total bids. And based on bidding activity at the end of last week, that may well be true. As of round 77 on Friday, total winning bids stood at $21.2 billion.

More importantly, though, bidding on big licenses in valuable locations like New York City and Los Angeles has mostly ended. Now bidders are squabbling over licenses covering smaller locations.

A record ending

However, the financial analysts at New Street Research speculated there could still be some action yet to come. "The final outcome ... will still depend on how long it takes for the remaining 4MHz of excess demand to fall to zero," they wrote in a note to investors Wednesday. "If it takes 45 more rounds of bidding (which is possible assuming 5 rounds per day and a daily drop in demand like today's) and prices continue rising roughly 0.3% per round, the final auction price could creep all the way up to $24 billion. We think it much more likely that prices continue slowing from here, with an outcome in the $21-$22 billion range far more plausible (up from our prior guess of $20-$21 billion)."

Early estimates for the auction ranged from $15 billion to $37 billion.

Regardless, the auction has already secured its place in the record books. Earlier this month it passed its $14.8 billion reserve price, a necessary milestone considering that the reserve price is the cost to move existing, incumbent military users out of the band. The FCC's Auction 110 of spectrum between 3.45GHz and 3.55GHz, which started October 5, has been dubbed the "Andromeda auction" by Light Reading because it sounds cool.

And now, with more than $20 billion in total winning bids, the Andromeda auction is officially the nation's third-biggest spectrum auction ever. As noted by Next TV, only the $45 billion AWS-3 auction in 2015 and the $81 billion C-band auction earlier this year generated more in winning bids. The Andromeda auction last week passed the FCC's broadcast incentive auction of 600MHz licenses, which ended with $19.8 billion in winning bids in 2017.

What's next for Andromeda

The next step in the auction will be for bidders to finish competing for licenses around the country. When there are no more bids, the auction will end. However, as in prior spectrum auctions, the FCC is only releasing the amount and geographic location of each bid and not the identity of the bidder. The agency is expected to release the identity of winning bidders after the auction is over, likely sometime in December or January.

The Raymond James analysts expect AT&T to end up spending around $9 billion for licenses in the auction, followed by Verizon with $5 billion, and Dish and T-Mobile to tie with around $2 billion each. The analysts also expect UScellular to spend around $1 billion. Other bidders – such as Grain Management and Columbia Capital – could also surprise with big wins for licenses in large markets.

Then the real work will begin: The FCC is expected to release Andromeda spectrum later this year. The financial analysts at Credit Suisse then expect operators to start installing new radio equipment atop cell towers for the 3.45GHz-3.55GHz band sometime next year. And that spending, according to the Credit Suisse analysts, could help raise overall US wireless industry capital expenditure (capex) to eye-watering levels.

"We project [capex] spend to peak in 2022 at $39.6 billion, with 2023 coming in closely behind at $37.6 billion," they wrote in a recent note to investors. "These elevated levels of capex are primarily due to carriers' investment in C-band. C-band's most important impact might just be the effects to the carrier competitive landscape, as AT&T and Verizon can now compete more effectively with T-Mobile."

They continued: "Similarly, Auction 110's spectrum is midband (3.45GHz) and it will be deployed beginning in 2022, adding another layer to the 5G network spectrum densification theme. Crucially, we believe that if Auction 110 plays out as forecasted, 5G competition amongst wireless carriers will be elevated further."

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano