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Contributors: Douglas McIntyre Jon C. Ogg

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Wednesday, August 23, 2006

FCC Auction Results Still Surprising; T-Mobile Is Most Aggressive

Stock Tickers: DT, VZ, VOD, S, T, BLS, LEAP, CMCSA, TWX

The additional dollar rate of licenses really seems to be slowing down and the bids essentially go until there are no more at this FCC auction, so we thought we would show how this is going so far. We have compiled the results through Round 38 of the bidding. This may go into September still, but it seems to have slown down. If you look on the FCC site they show these results in a nearly-live format. This is expected to toal out at $14 billion to $15 billion according to pre-auction estimates, so these "winning bidder" numbers may actually end up looking different at the end.

The clear winner so far, which has been a little surprising here, is Deutsche Telekom's (DT) aggressive bidding for the T-Mobile unit here in the US. It was thought that Verizon (VZ) was going to be the most agrressive pre-auction, so that is why we say this is surprising. This actually may be an indication that T-Mobile may try to agressively grow with more WiMax and communications offerings. T-Mobile is not thought of in the same light by most when they compare up to Sprint NexTel, Verizon, or Cingular. Maybe that will change, maybe it won't. At one point T-Mobile was even going to be sold, but the price never reached the level the company was seeking.

Auction No. 66 is for 1,122 licenses:
36 Regional Economic Area Grouping licenses,
352 Economic Area licenses,
734 Cellular Market Area licenses.

Qualified Bidders: 168
Rounds Completed: 38
Bidding Days: 11
Results for Round 38
Gross Bids: $12,743,128,200 ($11.8 Billion is from the top 5 bidders)
Dollar Change: $76,153,000
Net Bids:$12,563,802,750
Dollar Change: $55,014,600 (from end of Round 37)
New Bids: 289
Licenses with PWBs*: 978
FCC Held Licenses: 144
Eligible Bidders: 128
* PWBs = Provisionally Winning Bids

Cellco dba Verison Wireless; Verizon (VZ), Vodafone (VOD)
Cingular: AT&T (T), BellSouth (BLS)
Cricket: Leap Wireless (LEAP)
MetroPCS (private, for now)
SpectrumCo LLC: Comcast (CMCSA), Time Warner (TWX), Sprint Nextel (S), Cox Communications, Bright House Networks.
T-Mobile: Deutsche Telekom (DT) unit

Consortium new bids Licenses Winning Bids eligibility
Cellco Partnership 0 4 $2,798,738,000 179404211
Cingular AWS, LLC 20 45 $1,185,569,000 136093685
Cricket Licensee
24 54 $737,857,000 90061053
MetroPCS AWS, LLC 1 5 $960,146,000 82485264
SpectrumCo LLC 18 112 $2,036,019,000 263745264
T-Mobile License LLC 31 132 $4,100,643,000 354814737

Total from Top Bidders:
352 $11,818,972,000

Jon C. Ogg
August 23, 2006

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