Cash-Strapped US Carriers May Bid Just $33 Billion on Airwaves

A federal auction of TV airwaves that are crucial to help US wireless carriers improve coverage may yield a lot less than anticipated. Blame the price wars and slow growth that have left some potential bidders cash-constrained.

In the Federal Communications Commission’s auction, expected to begin in late spring 2016, TV stations will voluntarily give up airwaves in return for cash. The sale has been hailed as a once-in-a-lifetime windfall for both broadcasters and the government. Yet bids will total just $33 billion, according to an average of eight analysts surveyed by Bloomberg. That’s well below the $45 billion the FCC may expect and the $84.9 billion estimated by one broadcasting industry group. Over the next few weeks, companies like Verizon, AT&T, and T-Mobile will firm up their strategies as they prepare for the auction, while Sprint sits on the sidelines. “I’d say $33 billion is a relatively small number, but if you look at the balance sheets, they can’t go much beyond that,” said Jennifer Fritzsche, an analyst with Wells Fargo Securities LLC. “The only way it gets bigger is if there’s some dark horse bidder like a private investor."