Wireless Auctions Restart

Goldman, Sachs & Co. analysts expect bids for spectrum to surge upward today as the FCC C and F Block auctions continue.

by ISP-Planet Staff [January 4, 2001]

Following a holiday hiatus, Goldman, Sachs & Co. investment analysts predict that this week's wireless auctions will receive higher than expected bids for spectrum.

Representatives of the investment firm said the C and F Block wireless auctions will be more frothy than expected this year. At the end of 23 rounds, the total gross high bids stood at $11.7 billion. This is close to analysts $13 billion original estimate of where the auction would end.

According to Goldman, Sachs & Co., bidding was still quite active at the holiday break, so it appears that the total value will surpass its original estimates, into the mid and possibly high-teens billions of dollars.

Chief financial analyst Barry A. Kaplan said the biggest surprise in the current auction has been just how much Verizon Wireless has dominated the auction process.

"Its gross bids totaled $5.5 billion at the break, more than double second place AT&T Wireless Group's $2.1 billion (through the Alaska Native designated entity), and almost 3.5 times Cingular's $1.6 billion (through the Salmon PCS designated entity)," Kaplan said.

In some major markets, like New York, Boston, Seattle, Verizon remains high bidder on both non-designated entity licenses, Kaplan said Verizon is relegating the bidding between the other major players, such as AT&T Wireless Group and Cingular to the one remaining designated entity license.

"We think the ultimate determination of whether the auction ends in the mid-teens, or high-teens billions of dollars will depend on how aggressively AT&T and Cingular attempt to challenge Verizon in the bidding for the non-designated entity licenses," Kaplan said. "As opposed to confining most of their activity to the designated entity licenses."

Representatives from Verizon and AT&T Wireless Group would not comment on the auction the bidding is finished.

—End    

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