AT&T top buyer at U.S. airwaves auction; Dish spends big

By Alina Selyukh and Malathi Nayak

WASHINGTON/SAN FRANCISCO (Reuters) - AT&T Inc <T.N> spent close to half the total in the record-setting U.S. sale of airwaves for mobile data, with Dish Network Corp <DISH.O> spending heavily to manage a surprise win at No.2 ahead of Verizon, results showed on Friday.

AT&T bid a total of $18.2 billion to win licenses of so-called AWS-3 spectrum. Dish itself did not win any licenses, but had invested in bidding partners SNR Wireless LicenseCo LLC and Northstar Wireless LLC, which bid a total of $13.3 billion.

The two companies, backed also by financial firms including BlackRock Inc <BLK.N> but with little to no revenue, had applied to receive a discount as small-business entities, bringing their net bid amount to $10 billion.

Verizon and T-Mobile <TMUS.N> bids were $10.4 billion and $1.8 billion, respectively, according to the results of the Federal Communications Commission's largest ever auction.

"Dish was the one that surprised most, spending a couple of billion more than anticipated," said Jefferies & Co analyst Mike McCormack.

Dish's larger-than-expected bid for over 700 licenses put a damper on the investors' hypothesis that the satellite company had expected to turn around and sell the newly acquired airwaves to Verizon or another buyer. However, Dish's plans remain unclear.

Shares of Dish fell 4.3 percent to close at $70.35 on Thursday.

Verizon made slightly lower-than-expected bids but the company had hinted to investors that it would do so in December, McCormack added.

The record $44.9 billion auction, which ended on Thursday, demonstrated the voracious appetite of wireless carriers and other companies for spectrum to satisfy the growing consumer demand to stream video and other data-guzzling content.

AT&T, Dish's partners and Verizon snapped up airwaves in some of the most coveted and expensive markets, such as New York and California.

Verizon and AT&T shares were relatively unchanged before closing at $45.71 and $32.92, respectively.

Dish acknowledged in a statement it had invested in two entities that participated in the auction but did not further explain its plans, citing FCC anti-collusion rules.

Verizon said in a statement it bought a total of 181 licenses that cover markets reaching 61 percent of the United States.

AT&T was awarded 251 licenses, while T-Mobile bagged 151 licenses. AT&T's debt leverage may rise given its AWS-3 spectrum investment, it said in a statement.

"The company will use excess cash — after paying its dividend — over the next three years to pay down debt, and expects to return to historical debt ratios," it added.

Sprint, the third-largest U.S. carrier, skipped the AWS-3 auction.

(Reporting by Alina Selyukh and Malathi Nayak; Editing by G Crosse, Dan Grebler and Bernard Orr)