With a record number of bidders, CBRS auction estimates rise to $10B

The analysts at Raymond James said they expect the FCC's upcoming auction of 3.5GHz CBRS spectrum licenses to generate a total of $8 billion to $10 billion in bids.

"Demand could be quite high given 271 qualified bidders vs. 23 to 70 bidders in the previous five auctions," the Wall Street analysts wrote in a report to investors Monday. "And while the vast majority of Auction 105 [the CBRS auction] qualified bidders are small and have applied for rural (75 bidders), small business (7 bidders) or very small business (129 bidders) bidding credits, the other 60 bidders include 32 public companies."

Cautioned the analysts: "With such a diverse group of qualified bidders and limited supply, it is hard to gauge potential pricing."

Raymond James' new forecast is far higher than those issued earlier this year. For example, Mobile Experts analyst Kyung Mun told Light Reading in January he was expecting roughly $2.2 billion in total bids. Meantime, the Wall Street analysts at research firm Cowen estimated roughly $4.4 billion in bids.

Raymond James' forecast is based on the FCC's final, official list of qualified CBRS bidders, released July 1. The agency reported that 271 bidding entities met the agency's requirements to participate in the auction.

As in past auctions, the FCC initially released the identities of entities that had registered their intention to bid in the auction. That list, released in early June, included 105 entities that submitted a complete application and 243 entities that submitted incomplete applications. The agency's new list is the final, official list of entities that will participate in the CBRS auction, scheduled to start July 23.

Most of the major names included in the FCC's initial list made it onto the agency's final list with one noteworthy exception: fiber company Corning registered its interest in the auction in June, but is not among the official auction participants.

The analysts at Raymond James pointed out that all the major US wireless network operators are scheduled to participate in the auction, as are most of the nation's major cable operators. The firm also noted that a number of regional telecom providers including America Movil, Cincinnati Bell, Consolidated Communications, Frontier Communications, Shentel, SK Telecom and Windstream are also registered to bid.

"And most surprisingly, there are also 11 public energy companies qualified to bid (CVX, EIX, EMA, EOG, EXC, HE, NWE, OXY, PXD, SRE, SO) as well as one REIT (JBGS) and even a Deere, John Deere (DE)," the analysts noted, citing the public companies' stock tickers.

CBRS proponents have stressed that the spectrum could be used for a wide variety of uses, from 4G network augmentation to fixed wireless to IoT services. Further, the CBRS Alliance recently released an initial set of specifications that would support 5G in the CBRS band.

The Raymond James analysts noted that while the CBRS auction is clearly drawing plenty of interest, the upcoming C-band auction in December is "expected to produce dramatically higher bids."

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