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$35B+ Spectrum Auction Dings Verizon, Shines Dish

Dan Jones
11/24/2014

The $35 billion-plus price tag for the FCC's ongoing AWS-3 spectrum auction caused Citigroup to downgrade its rating for Verizon Monday. The same firm upgraded satellite TV player Dish last Friday because of its existing holdings of similar mid-band radio waves.

Citigroup analyst Michael Rollins downgraded Verizon Communications Inc. (NYSE: VZ), one of the bidders in the auction, from a "buy" rating to neutral Monday morning, citing the high costs of the current spectrum auction for the operator and increased competition.

The Advanced Wireless Services (AWS-3) sell-off -- known as Auction 97 -- stands at $35.1 billion bid after 29 rounds this Monday. The Federal Communications Commission (FCC) had set the minimum reserve for bids at $10.1 billion, which the 70 bidders for the spectrum blew through early last week. (See FCC's AWS-3 Auction Tops $14B.)

The FCC started the current auction on November 13. The AWS-3 auction includes 65MHz of spectrum in the 1.7GHz and 2.1GHz bands, including 50MHz of paired channels for LTE uplink and downlink. Most of the bidding so far has been around the 50MHz of paired spectrum. (See this FCC page for more details on the spectrum that is up for grabs.)

The Citigroup analyst raised his target price to 94 cents from 79 cents for Dish Network LLC (Nasdaq: DISH)'s stock on Friday.

The much higher than expected bidding for AWS-3 raises the value of Dish's current mid-band holdings. The US satellite provider holds 50MHz of spectrum: 40MHz in the AWS-4 (2/2.2GHz) band and 10MHz in the adjacent 1.9GHz H-Band. The H-Band could potentially be paired with AWS-4 for an uplink and downlink channel.

Winning some of the AWS-3 spectrum would give Dish more bandwidth to interoperate with LTE services on the AWS-1 (1.7/2.1GHz) spectrum and potentially work with its AWS-4 spectrum in the future.

Dish is a bidder in the current auction, along with AWS spectrum holder T-Mobile US Inc. , Verizon and others. (See AWS Auction: Could It Bring Dish & T-Mobile Together?)

— Dan Jones, Mobile Editor, Light Reading

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pzernik
pzernik
11/30/2014 | 8:53:48 AM
Re: Now at $35.6B
When does the auction close Dan?
DanJones
DanJones
11/25/2014 | 4:35:16 PM
Re: Getting a bit rich for some bidders? Now at $36B!
Up above $37B now. How much higher can this go? FCC has a shortened day of bidding tomorrow for Thanksgiving.
DanJones
DanJones
11/24/2014 | 5:42:33 PM
Getting a bit rich for some bidders? Now at $36B!
The auction hit $36B with round 31. 

The prices are getting a bit much for some bidders it appears. 25 licenses are now back in play.  

 
DanJones
DanJones
11/24/2014 | 5:31:52 PM
Re: Now at $35.6B
The qualified bidders are listed here. 

Some, like AT&T and T-Mobile, are very obvious. Other LLCs are not so much.

The FCC won't release which groups have bid for what until the auction closes.
mendyk
mendyk
11/24/2014 | 5:12:38 PM
Re: Now at $35.6B
Dan -- Is there any way to determine the extent to which non-operator speculators are driving up the bidding? I remember this happening in a much earlier spectrum auction, with predictably bad results.
DanJones
DanJones
11/24/2014 | 4:59:51 PM
Re: Now at $35.6B
This is the license that is still held by the FCC:

 

https://auctionbidding.fcc.gov/auction/results/results.htm?topage=newPublicItemDetail&fromPage=newWatchlist&watchlist_id=-1&page=1&rowcount=10&sort=0&asc=true&oldsort=null&bip_id=4429&rhStart=0&rhRowcount=10&rhAsc=false&rhPage=1&rhSort=0

A bargin at $1M+
DanJones
DanJones
11/24/2014 | 3:26:51 PM
Now at $35.6B
Now at $35.6B, 1 license still without a PWB.
DanJones
DanJones
11/24/2014 | 2:33:31 PM
Re: VZ stock is dinged....
Auction probably doesn't have much longer to run, there appears to be only one license without a provisional winning bid left, it could end today.
Ray@LR
[email protected]
11/24/2014 | 2:05:11 PM
VZ stock is dinged....
Verizon's share price is down 1.54% to $49.44 today.

Dish is up 2.27% to $75.37.

 

What will happen if the auction keeps giong...?
DanJones
DanJones
11/24/2014 | 1:10:51 PM
Round 29 is now closed
Up at $35.1B now.
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