T-Mobile Emerges a Wireless Auction Winner

Maybe T-Mobile USA was a big winner in the recently completed government wireless auction after all -- with AT&T picking up the bill.

The record $45 billion in bids pushed up the market value of “mid-band” spectrum, a category that includes the airwaves AT&T turned over to rival T-Mobile in 2012 as part of the breakup fee for their failed merger. The breakup fee was one of the costliest ever. AT&T took a $4 billion charge, covering the $3 billion in cash it paid T-Mobile and the $1 billion book value of the spectrum it surrendered. Today, the cost looks even worse in light of the higher estimated values for mid-band spectrum. Analysts at New Street Research LLP estimates that same spectrum is worth $4.7 billion in the wake of the auction, putting the current value of the cash and airwaves AT&T gave away near a staggering $8 billion.