NextWave Telecom Inc.’s highly anticipated attempt to auction a half-dozen spectrum licenses fell short of expectations as the bankrupt license holder managed to generate only $973.5 million in winning bids.
The final prices included a minimum winning bid of $930 million for 10 megahertz of spectrum in New York City from Verizon Wireless and minimum winning bids of $43.5 million for a pair of 10-megahertz licenses in Florida from MetroPCS Inc.
NextWave withdrew the three remaining 10-megahertz licenses in Denver; Portland, Ore.; and Tulsa, Okla. Each of those licenses required minimum bids of between $35 million and $38 million.
NextWave noted approximately $398 million of the proceeds will be paid to the Federal Communications Commission as part of their recently agreed-to Global Resolution Agreement that was approved last May, with the remaining $575 million being applied to NextWave’s various debts.
“We’re extremely pleased with the results,” said Allen Salmasi, chairman and chief executive officer of NextWave. “Adding nearly $575 million of net proceeds to the company’s balance sheet will greatly strengthen our financial position and will give us ample funds to pay our remaining creditors and complete the Chapter 11 reorganization process. We are now on the path to emerge from bankruptcy with no debt, an attractive spectrum footprint and significant cash reserves.”
NextWave recently returned more than 60 licenses to the FCC as part of the Global Resolution Agreement that included payment options related to debt owed to the FCC and allowed NextWave to move ahead with an auction of some of its licenses. NextWave also recently sold 34 licenses to Cingular Wireless L.L.C. in 32 markets for $1.4 billion.
Analysts were expecting the auction to draw at least $1 billion in bids, but noted that Verizon Wireless’ acquisition last week of Qwest Communications International Inc.’s wireless assets, including licenses and network infrastructure in Denver and Portland, could have dampened the overall bidding prices.
