WASHINGTON-The restart of the D-, E- and F-block personal communications services license auction in the new year has begun not with a bang but with a trickle. New bids and new high bids have settled into a single-digit pattern for the 10 rounds per day, and every time the numbers drop to within an “auction should end this week” margin, someone begins to wrangle over a market, and the bidding rises again.
At the end of Round 261 last Friday, total revenues had reached $2.5 billion, with net changes per round averaging between 0.02 percent and 0.04 percent. New bids and new high bids continue to hover around six per round.
“This auction likes to tease people into thinking it’s going to end, and then it doesn’t,” commented Washington, D.C.-based PCS analyst Taylor Simmons. “All along, this auction has been going along at a muted level of competition, but some bidders are stubborn. One fight can prolong this.”
Simmons also mentioned that this auction differs from the C-block auction last year because “bidders have not run out of money and given up.” Of the 153 original players that began bidding Aug. 26, only 28 have pulled out.
Winners of the Top 20 basic trading areas have been determined for some time; the continuing bidding is focusing on much smaller markets. The most expensive BTA is the F block of New York City, with Northcoast Operating Co. Inc. weighing in at $75.2 million. The cheapest Top 20 market is the F block of Pittsburgh, with a scant $195,000 paid by Devon Mobile Communications.
The Top 10 bidders by total dollars continue to be SprintCom Inc. ($544.2 million), AT&T Wireless PCS Inc. ($401.1 million), BellSouth Wireless Inc. ($205.1 million), OPSCE-Galloway Consortium ($181.3 million), Alltel Mobile Communications ($144.7 million), NextWave Power Partners Inc. ($128.9 million), Northcoast ($117.5 million), Rivgam Communicators L.L.C. ($80.9 million), Western PCS BTA 1 Corp. ($80.8 million) and U S West Communications Inc. ($57 million).
It doesn’t appear that any bidder really has changed the course of this auction, as did NextWave with the C block, mainly because so many markets are up for sale this time around.
“This was a big auction, and AT&T Wireless is the big winner,” Simmons said. “They are overlaying where they already have a cellular presence, and they didn’t pay much.” Simmons also pointed out that SprintCom had filled out its nationwide network, missing out on only a few desired smaller markets, but he added that the company paid considerably more for its blocks than the average price per pop-approximately $6.40, compared with the auction average of about half that. “They paid a pretty penny,” he said, “but they filled in every blank.”
Today starts the long-awaited auction of 10 unserved cellular areas in five markets, which include an A- and B-block each
As of Dec. 20, six applications were found by the Federal Communications Commission to be deficient in some way and are being resubmitted. On opening day, bidders must be active on 80 percent of their bidding units to ward off any reduction.
