Cingular Wireless L.L.C. moved even closer to completing its previously announced deal to acquire 34 PCS licenses from bankrupt license holder NextWave Telecom Inc. following approval of the $1.4 billion deal by NextWave’s bankruptcy court last Thursday.
The court’s approval followed NextWave’s announcement earlier this week that it received no qualified competing bids for the licenses as of the Sept. 15 deadline that would have forced a competitive auction for the spectrum.
“No qualified bids were submitted by the bid deadline,” NextWave said in a court filing. “As a result, no auction is going to be held.”
Licenses in a number of top markets are included in the deal, including San Francisco, Los Angeles, Boston and Chicago. The licenses, which are in a number of markets where Cingular already owns spectrum or offers service, are expected to bolster Cingular’s network migration plans that include the overlay of its legacy TDMA network with GSM-based next-generation technology.
Analysts had expected some of Cingular’s competitors could tender a qualified bid in an attempt to either steal spectrum that Cingular apparently feels it needs or at least drive up the price Cingular would have to pay for additional network capacity and coverage. Those expectations were fueled by comments from Verizon Wireless in August that it was looking at a potential bid and from recent remarks from AT&T Wireless Services Inc. that it was prepared to spend an additional $1 billion to bolster its spectrum portfolio.
NextWave, which still owes the Federal Communications Commission more than $4 billion for licenses it won during auctions in the mid 1990s, is expected to reap approximately $660 million in net proceeds from the sale with the FCC pocketing approximately $714 million.
