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Going for broke: 5G Rivals Face an $81 Billion Tab After Spectrum Buying Spree
USA Created: 19 Jan 2021
AT&T, Verizon expected to turn to bond markets and banks to finance bids in record-setting FCC airwaves auction.

Bidders spent a record $80.9 billion in a U.S. government airwaves-license sale, capping a frenzied auction that will demand a commensurate wave of borrowing in an already-indebted telecom sector.

AT&T Inc., Verizon Communications Inc. and others competed in the Federal Communications Commission’s sale of C-band spectrum rights—a hot commodity for cellphone carriers seeking more frequencies for 5G services. The sale ended Friday ahead of a second phase that determines the specific frequencies each company will receive.

The public won’t likely learn the names of the auction’s winners for several weeks, but Wall Street is already taking cues from traditional network operators seeking loans or issuing bonds that could be used to foot the bill.

AT&T is in talks with banks about a possible one-year loan of around $14 billion and recently borrowed about $3.5 billion in the short-term commercial-paper market, according to people familiar with the matter. T-Mobile US Inc. raised $3 billion through a high-yield bond sale earlier this month. Verizon is widely expected to issue bonds in the coming weeks, analysts said.

The new debt this year adds to several billion dollars in bonds that carriers issued in 2020 before the auction started. AT&T’s discussion with banks was earlier reported by Bloomberg News...
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Source: Wall Street Journal, Drew Fitzgerald & Sam Goldfarb, 17 Jan 2021

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