Aug. 20, 2006

The battle for the large regional licenses in the advanced wireless services spectrum auction appears to be largely settled at this point.

Overall, Verizon Wireless and T-Mobile USA appear to be the big winners.

Although the bidding continues, the winning bids for the six largest blocks of spectrum have held steady for the past several rounds. The licenses break down between Verizon Wireless and T-Mobile USA:

Verizon Wireless currently holds four of the six 20-megahertz F-block licenses. Verizon only placed bids on F-block spectrum—ignoring the rest of the 1,116 licenses available—and pushed the bidding at one point up to $3.5 billion for F-block licenses.

As of round 26, the carrier had committed about $2.8 billion for four F-block licenses, including $1.3 billion for the Northeast license alone. Verizon Wireless’ other high bids were on the F-blocks covering the Great Lakes, Southeast and Mississippi Valley regions.

T-Mobile USA’s high bids are holding on the F-blocks covering the Central and Western United States; if no one challenges the nation’s fourth-largest carrier, T-Mobile USA will pay out about $1.3 billion for those two licenses. T-Mobile USA also has high bids on 128 other, smaller licenses. The carrier had total high bids worth $3.8 billion in the 26th round.

The bidding is also slowing for some of the 10-megahertz regional D- and E-block licenses, which cover the same geographic areas as the valuable F-block licenses, but include half the spectrum.

MetroPCS Communications Inc. appears to have landed 10-megahertz regional licenses in the Northeast and West, as well as a New York City license. However, the carrier is still battling for spectrum blocks in other areas, including Florida.

The top 10 highest bids by round 26 are:

AW-REA001-F
Northeast Cellco Partnership d/b/a Verizon Wireless round 16
$1,335,374,000
AW-REA006-F
West T-Mobile License LLC 15 $894,590,000
AW-REA003-F
Great Lakes Cellco Partnership d/b/a Verizon Wireless 14 $615,923,000
AW-REA002-F
Southeast Cellco Partnership d/b/a Verizon Wireless 14 $572,446,000
AW-REA001-D
Northeast MetroPCS AWS, LLC 18 $552,694,000
AW-REA001-E
Northeast T-Mobile License LLC 17 $472,553,000
AW-REA005-F
Central T-Mobile License LLC 15 $470,290,000
AW-BEA010-B
NYC-Long Is. NY-NJ-CT-PA-MA-VT SpectrumCo LLC 20 $468,178,000
AW-CMA001-A
New York-Newark, NY-NJ T-Mobile License LLC 23 $396,232,000
AW-REA003-D
Great Lakes Denali Spectrum License, LLC 20 $365,445,000

Leap Wireless International Inc. and Leap-backed Denali Spectrum License L.L.C., meanwhile, have unanswered high bids for a Great Lakes D-block license and a Central E-block license.

CableVison System Corp. Chairman Charles Dolan’s bidding entity dropped out of the auction at the end of round 24. Dolan’s exit follows that of satellite television providers EchoStar Communications Corp. and DirecTV Group Inc., which dropped out of the auction earlier this week.

However, the Sprint Nextel Corp. joint venture with four cable companies remains in the race, with high bids totaling $1.5 billion for 95 spectrum licenses as of the close of round 25.

The auction so far has raised about $11.3 billion, with 295 new bids in round 26. Of the original 168 eligible bidders, 137 remain; 865 of the 1,122 spectrum licenses have received bids.

Source: RCR News