 |
 |
|
AWS: Satellite players call it quits
Aug. 17, 2006 Satellite television providers EchoStar Communications and DirecTV Group have pulled out of the advanced wireless service spectrum auction. The satellite companies made the largest up-front payments of the auction: $972.5 million. They were aggressive bidders in early rounds, attempting to capture spectrum that would have given them a national footprint. But after a week, as bid prices soared, the satellite consortium was eventually left with a single spectrum license covering Alaska, and then it dropped out completely from the bidding.  Top 10 Highest Bidders by the end of Round 18: As of round 18, two dozen of the original 168 eligible bidders have dropped out of the auction. EchoStar and DirecTV were the most notable quitters. However, Bear Stearns analyst Phil Cusick noted that not buying spectrum doesn’t necessarily put the satellite vendors out of the wireless game. “We believe that they could choose instead to buy satellite providers Motient [Corp.] or SkyTerra [Communications Inc.] to access nationwide spectrum,” Cusick wrote in a research note. “The [Direct Broadcast Satellite] player withdrawal is a positive for companies that need to buy spectrum in this auction like Leap [Wireless International Inc.], MetroPCS [Communications Inc.], and T-Mobile [USA Inc.], but not necessarily a change for national telco's or tower companies as the DBS players may have another route to compete in the wireless space.”  As for auction action in round 18, Verizon Wireless bid $2.8 billion to keep its grip on four of the 20-megahertz regional F-block licenses. The carrier was the high bidder for F-block licenses in the Mississippi Valley, Great Lakes, Northeast and Southeast regions. T-Mobile USA, meanwhile, bid $2.6 billion for 74 licenses around the country in round 18. Most were smaller market licenses, but T-Mobile USA also had high bids on four regional licenses covering 10 MHz and 20 MHz chunks in the Central and Western regions. Sprint Nextel Corp.’s joint venture with four cable companies was still going strong in the 18th round, with high bids on 63 licenses totaling $1.2 billion. The licenses mainly cover small cities and metropolitan markets around the continental United States and Hawaii. Leap placed high bids worth $163 million on 26 licenses that all covered relatively small geographic areas—a reversal from the large regional licenses that Leap had previously been competing for. The other bidding entity Leap is backing, Denali Spectrum License L.L.C., placed high bids worth $568 million on two 10 MHz regional licenses in the Great Lakes and Southeast. To help fund its auction activities, Leap announced that it had entered into agreements with affiliates of Goldman, Sachs & Co. and CitiGroup Corporate and Investment Banking for the sale of 5.6 million shares of stock. The companies are offering the stock publicly for $42 a share, according to Leap. Leap said it will use the money for working capital and to fund its spectrum purchases in the AWS auction.  Other active bidders in the 18th round included: 1- U.S. Cellular Corp.’s bidding entity placed high bids on 17 licenses worth $11 million in states including Oklahoma, Ohio, Pennsylvania, New York and Alaska. 2- Cellular South bid $6.65 million for 13 licenses in Alabama, Florida and Tennessee. Cable One Inc. bid $5.4 million for 26 licenses in states including Mississippi, Texas, Arizona, Idaho, Oklahoma and Nebraska. Dolan Family Holdings L.L.C., backed by the chairman of CableVision System Corp., bid $5.5 million for 7 licenses in Connecticut, New Jersey and New York. The AWS auction had raised a total of $9.46 billion in high bids as of the 18th round, an increase of about 5 percent from the previous round. Of the 1,122 licenses up for grabs, 740 have received bids. Participants placed a total of 270 bids in the 18th round. Source: RCR News  
© Wireless Industry News.
|