AWS Auction Winding down with Bargain Basement Bids

Sharon Armbrust | August 31, 2006, 08:23 AM

The AWS Auction was moving quickly through its latest stage yesterday 8/30, the first day the FCC bumped the rounds/day up to six. At the beginning of the day there were 119 new bids in Round 59. By the end of the day in Round 64, the new bids were down 25% to 89. If that rate of decline were to hold, the auction could be over in a week or so.

Practically all of the big bets have already been put to bed. And the remaining bidders were competing in the bargain basement for the most part. The average provisional winning price/MHz pop across all the market licenses which got new bids during the day (in 6 rounds)was 15 cents/MHz pop. That compares to an average 70 cents/MHz pop cost for the top 50 most expensive licenses on a total dollar basis through yesterday. Those licenses have all been in the hands of their presumable prospective winners for at least 15 rounds, most for over 30 rounds. It's also a far cry from the top prices for a pair of big metros (Chicago and Washington DC) which have provisional winning bids of $1.57-1.59/MHz pop respectively.

Only 27 licenses with market populations over one mil. garnered new winning bids and just six licenses (four markets) with over two mil. pops were vied for during the day. Tampa has Cingular, Metro PCS and SpectrumCo circling, with the three trading places in the Tampa 10 and 20 MHz BEA licenses, but at distinctly different price levels. In Round 64 Cingular took over the 10 MHz BEA from Metro PCS at 72 cents/MHz pop, while SpectrumCo moved in on Cingular in the 20 MHz BEA with a 44 cents/MHz pop bid. The only other market with a 3-way battle was Puerto Rico. AWS Wireless pushed Triad out of the 10 MHz REA and Triad overbid Centennial Michiana in a 10 MHz BEA in the four mil. population island market. A 3rd Puerto Rico license is still in the hands of the FCC.

After Round 64 the FCC still held 82 licenses, 53 of which are RSAs, with the rest mostly off-shore markets. Failing any last minute surprise moves, the AWS Auction is almost history with the winners expecting to head home with ample amounts of spectrum at historically low prices. At the end of the day yesterday the average across the board provisional price per license was 53 cents/MHz pop. If you take away the top 50 license bids (on price/MHz pop basis), the remainder licenses were going for less than 25 cents/MHz pop on average. That's less than the DEF block PCS licenses attracted 10 years ago in 1997.