PCS Reauction Update: Day 14
Bankers Trust Research/BT Alex. Brown Research
Jeffrey Hines,Bo Fifer
April 12, 1999
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NEXTEL COMMUNICATIONS INC. [NXTL] "STRONG BUY"
WESTERN WIRELESS CORPORATION [WWCA] "STRONG BUY"
CLEARNET COMMUNICATIONS INC. [CLNTF] "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 14
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52-WK Earnings Per Share
FY Price Price 3-5 Yr
Est.
Ticker End 04/12/1999 Range 1998 1999 2000 Growth
Chg?
NXTL 12 37.56 43-15 (6.46)A (4.57) (2.91)
N
WWCA 12 40.94 43-14 (2.95)A (3.40) (2.34)
N
CLNTF 12 13.69 19-6 (10.93)A (9.44) (7.71)
N
MICTF 12 7.63 10-4 (7.65)A (6.64) (5.74)
N
OMPT 12 13.88 29-5 (12.18) (12.15) (8.56)
N
PTEL 12 19.56 24-9 (10.02)A (11.01) (8.85)
N
AERL 12 7.81 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 labors
on after day 14 (12-Apr). After 56 rounds of bidding (the pace of the
auction has increased to 8 rounds/day), the auction has yielded net
bids of $412 million and appears to be on the brink of conclusion. As
the auction winds down, these preliminary results have taken on
greater significance and winning footprints are beginning to take
shape (please see our note dated 22-Mar for identification of the top
10 qualifying participants).
-- TOP FIVE BIDDERS BY NET BID
(we note that an entity's bid amount can fluctuate (wildly) from round to
round--as opposed to necessarily rising each round--if it loses a high bid
position)
Bidder Markets Bid ($Mil)
Cook Inlet/VoiceStream PCS 28 192.3
OPCS Three 32 45.2
Viper Wireless 6 32.3
ABC Wireless 64 30.1
Leap Wireless 36 18.7
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
51 3 $412M 0% 57
52 2 $412M 0% 57
53 2 $412M 0% 57
54 0 $412M 0% 57
55 2 $412M 0% 57
56 2 $412M 0% 57
Source: Federal Communications Commission.
-- NET-NET: We've called for an end to this auction three times now. New
high bids have basically ceased--in fact, we even had a recent round
with no new high bids. 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 approaching zero asymptotically, implying an imminent close
to the auction. The end must be near (we hope)! 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.
The WEIGHTED average bid for all markets with an active bid remains
$3.78/POP, $13.48/POP in the top-10 markets (as measured by per-POP
bids)... Stay tuned. |
