PCS REAUCTION UPDATE: DAY 13
Bankers Trust Research/BT Alex. Brown Research
Jeffrey Hines,Bo Fifer
April 12, 1999
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NEXTEL COMMUNICATIONS INC. [NXTL] "STRONG BUY"
CLEARNET COMMUNICATIONS INC. [CLNTF] "STRONG BUY"
WESTERN WIRELESS CORPORATION [WWCA] "STRONG BUY"
MICROCELL TELECOMMUNICATIONS INC. [MICTF] "STRONG BUY"
OMNIPOINT CORPORATION [OMPT] "BUY"
POWERTEL INC. [PTEL] "MKT. PERFORM"
AERIAL COMMUNICATIONS INC. [AERL] "MKT. PERFORM"
PCS Reauction Update: Day 13
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52-WK Earnings Per Share
FY Price Price 3-5 Yr
Est.
Ticker End 04/09/1999 Range 1998 1999 2000 Growth
Chg?
NXTL 12 39.38 43-15 (6.46)A (4.57) (2.91)
N
CLNTF 12 14.13 19-6 (10.93)A (9.44) (7.71)
N
WWCA 12 41.50 43-14 (2.95)A (3.40) (2.34)
N
MICTF 12 7.88 10-4 (7.65)A (6.64) (5.74)
N
OMPT 12 13.56 29-5 (12.18) (12.15) (8.56)
N
PTEL 12 20.13 24-9 (10.02)A (11.01) (8.85)
N
AERL 12 7.44 8-2 (4.71)A (4.32) (3.99)
N
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HIGHLIGHTS:
-- Stage 3 (the final stage) of the re-auction of PCS frequencies continues
after day 13 (9-Apr). After 48 rounds of bidding (the pace of the auction
has increased to 6 rounds/day), the auction has yielded net bids of $411
million and appears to be on the brink of conclusion. As the auction winds
down, these preliminary results have taken on greater significance and
winning footprints are beginning to take shape (please see our note dated
22-Mar for identification of the top 10 qualifying participants).
-- TOP FIVE BIDDERS BY NET BID
(we note that an entity's bid amount can fluctuate (wildly) from round to
round--as opposed to necessarily rising each round--if it loses a high bid
position)
Bidder Markets Bid ($Mil) POPs
$/POP
Cook Inlet/VoiceStream PCS 28 192.2 18.8
10.20
OPCS Three 32 45.0 18.5
2.43
Viper Wireless 6 32.3 4.8
6.77
ABC Wireless 64 30.1 14.4
2.08
Leap Wireless 33 18.7 11.0
1.69
Source: Federal Communications Commission.
-- TOP FIVE MARKETS BY NET BID
Market Bidder Bid ($Mil)
Bid/POP
Chicago (30MHz) Cook Inlet/VoiceStream 117.9
$14.41
Dallas (30MHz) Cook Inlet/VoiceStream 62.4
$14.41
New Orleans (15 MHz) Viper Wireless 18.0
$13.18
St. Louis (30 MHz) OPCS Three 14.6
$5.33
Detroit (30 MHz) OPCS Three 13.2
$2.80
Source: Federal Communications Commission.
-- RECENT BIDDING ACTIVITY BY ROUND
New Net % Eligible
Round High Bids Bids Chg. Bidders
43 8 $410M 0% 57
44 11 $411M 0% 57
45 7 $411M 0% 57
46 9 $411M 0% 57
47 7 $411M 0% 57
48 5 $411M 0% 57
Source: Federal Communications Commission.
-- NET-NET: How long can this auction drag on? We can't believe much
longer. New high bids have basically stopped coming in and bidding units
in new high bids as a percentage of total bidding units (the FCC's main
determinant of when to close a stage) is nearing zero, implying an imminent
close to the auction. Most of the new bidding continues to be on smaller
licenses, and in fact, we are comfortable projecting Western Wireless as
the winner of both the Chicago and Dallas markets. This is an important
strategic win for the GSM carriers, although New Orleans (the other
strategic hole in the GSM footprint) appears likely to wind up in the TDMA
footprint. WE OVERLOOKED SBC's GSM NETWORK IN LAS VEGAS IN PREVIOUS
REPORTS CITING THAT MARKET AS ANOTHER GSM DEFICIENCY. Our apologies to SBC
and the entire GSM Alliance. The WEIGHTED average bid for all markets
with an active bid currently stands at $3.78/POP, $13.36/POP in the top-10
markets (as measured by per-POP bids)... Stay tuned. |
