Airwaves Auction’s Risky Signal for AT&T

[Commentary] Proceeds from the government’s auction for wireless airwaves are rising into the stratosphere, but the identity of the big spenders remains a mystery. The market appears to have its theories, though.

Investors have a sense that AT&T will emerge as the biggest buyer. Of the auction’s roughly $45 billion in projected proceeds, T-Mobile is expected to account for about $3 billion. Some speculate Dish’s auction spending has also exceeded expectations, but it probably couldn’t have spent more than $10 billion. Assuming Dish stretched that still leaves $32 billion worth of proceeds to divide between AT&T and Verizon. Split evenly, that would come out to $16 billion apiece. But if the market is right in implying AT&T bought more, it isn’t a huge leap to see it emerging with a $20 billion spectrum bill. Spectrum is important for AT&T’s strategic future, but a massive spectrum purchase could exacerbate its current pain.