Original URL: https://www.theregister.com/2006/08/23/cellcos_lead_aws_auctions/
Cellcos regain lead in AWS auctions
As satellite providers throw in the towel
Posted in Networks, 23rd August 2006 06:02 GMT
At the end of round 25 of Auction 66, the ongoing FCC sell-off of licenses in the AWS band in 1.7GHz and 2.1GHz, bids totalled $11.3bn.
Despite all the excitement over the entry of new challengers to the established cellcos, those incumbents were at the top of the bidding tree after round 25 on Friday, while the satellite operators had dropped out.
However, the various cable-driven groups remained in play.
After round 25, T-Mobile USA, Verizon Wireless and the Sprint/cableco joint venture were the top three bidders to date, especially for the most prized licenses on offer, the six large regional 20MHz F Block allocations, which together cover nearly all the continental US.
Verizon Wireless looks poised to win four of these, including the large north eastern one, while T-Mobile, whose need for spectrum for 3G roll-out is urgent, is likely to gain the other two, for the western and central regions, as well as some valuable, though more localised, licenses in New York City and in western and Midwestern districts.
The Sprint venture's major gains look set to be in metropolitan markets throughout the US, particularly New York City and surrounding areas. It has high bids in about 95 markets.
With bidding for the F blocks slowing in the past few rounds, it is now unlikely that alternative candidates will gazump Verizon and T-Mobile.
Verizon Wireless only placed bids on F-block spectrum, ignoring the rest of the 1,116 licenses available, and at round 26 had committed $2.8bn for this spectrum, including $1.3bn 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 looks set to pay about $1.3bn for its two regional F-blocks and also has high bids on 128 smaller licenses, with a total of $3.8bn on the table so far.
The bidding is also slowing for some of the regional D and E-block licenses, which cover the same geographic areas as the F-blocks, but with only 10MHz apiece.
The regional carriers have been in hot pursuit of these. Big players in the early rounds, they have proved unable to match the budgets of the national players in the F-blocks, but may do well in the 10MHz race. In particular, MetroPCS Communications is likely to have landed such regional licenses in the Northeast and West, as well as a New York City license.
Leap Wireless and Leap-backed Denali Spectrum License have high bids for a Great Lakes D-Block license and a Central E-block license.
Satellite players drop out
The satellite television providers, DirecTV and EchoStar, which were bidding together, dropped out of the auction earlier in the week, making it increasingly likely that the former will bring forward its planned alliance with Clearwire, to use that company's WiMAX network to add mobility to its services and create a satellite/wireless quad play to take on the cableco/Sprint partnership and the large telcos' all-IP programs over fiber, DSL and 3G.
While the major cableco quad play activity centre on Sprint Nextel's own planned WiMAX network - through that cellco's venture with Comcast, Time Warner Cable, Cox and Advance/Newhouse - there was also cable interest in Auction 66.
As well as the Sprint group, which remains a major bidder, the major cableco that remains outside the alliance, CableVision, was also in the running. However, CableVision - bidding as the family of its chairman Charles Dolan - dropped out after round 24.
NextWave, which plans to create a third national WiMAX network alongside those of Sprint and Clearwire, also remains a major bidder, as do other regional players such as US Cellular.
From the point of view of creating a new wireless landscape in the US, and kickstarting broad competition in quad play services, the auction may be disappointing, since most spectrum is likely to remain with the carriers with the greatest interest in the status quo.
This will shine a brighter light on the planned 700MHz auction in early 2008, which offers spectrum of more disruptive potential even than AWS, because of its strong propagation quality; and whose timing will be better for disruptive new entrants armed with WiMAX or similar technologies.
It is also likely to light an even greater fire under the broadband wireless/quad play activities outside the classic 3G spectrum, notably the Sprint/cableco plans in 2.5GHz WiMAX and Clearwire's roll-out. And, of course, the early interest of the television providers will have upped the prices, making the FCC likely to reap its targeted reward of $15bn by the end, which comes when there are no further bids.
While many smaller players are dropping by the wayside, at least outside localised and rural bids, there could still be up to 70 more rounds, taking several more weeks.
Copyright © 2006, Wireless Watch
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