PCS Reauction Update: Day 16
Bankers Trust Research/BT Alex. Brown Research
Bo Fifer,Jeffrey Hines
April 14, 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 16
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52-WK Earnings Per Share
FY Price Price 3-5 Yr
Est.
Ticker End 04/14/1999 Range 1998 1999 2000 Growth
Chg?
NXTL 12 37.50 43-15 (6.46)A (4.57) (2.91)
N
WWCA 12 46.75 45-14 (2.95)A (3.40) (2.34)
N
CLNTF 12 13.19 19-6 (10.93)A (9.88) (8.41)
N
MICTF 12 7.78 10-4 (7.65)A (6.64) (5.74)
N
OMPT 12 13.50 29-5 (12.18) (12.15) (8.56)
N
PTEL 12 21.63 24-9 (10.02)A (11.01) (8.85)
N
AERL 12 8.06 8-2 (4.71)A (4.32) (3.99)
N
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HIGHLIGHTS:
-- The third and final stage of the re-auction of PCS frequencies labors
on after day 16 (14-Apr). After 72 rounds of bidding, the auction has
yielded net bids of $413 million. We've said it before and we'll say
it again: the auction appears to be on the brink of conclusion. As
the auction winds down, we have forecasted several winning footprints,
including a GSM victory in Chicago and Dallas (please see our note
dated 22-Mar for identification of the top 10 qualifying
participants).
-- TOP FIVE BIDDERS BY NET BID
(we note that an entity's bid amount can fluctuate (wildly) from round to
round--as opposed to necessarily rising each round--if it loses a high bid
position)
Bidder Markets Bid ($Mil)
Cook Inlet/VoiceStream PCS 28 192.3
OPCS Three 34 45.1
Viper Wireless 6 32.3
ABC Wireless 63 29.9
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
67 2 $412M 0% 57
68 2 $412M 0% 57
69 3 $412M 0% 57
70 3 $412M 0% 57
71 2 $413M 0% 57
72 2 $413M 0% 57
Source: Federal Communications Commission.
-- NET-NET: We've called for an end to this auction four times now. New
high bids are coming in at less than 2 per round now--in fact, we even
had one recent round with NO new high bids and several rounds in which
the dollar value of net high bids have actually DECREASED. We say
it's time to put an end to this auction, and most of the activity
metrics support that conclusion. The GSM carriers have all but
secured a strategic victory with the acquisition of Chicago and Dallas
markets, although New Orleans (the other strategic hole in the GSM
footprint) appears likely to wind up in the TDMA footprint. The
bidding is concentrated on smaller markets now, as only 3 of the top
10 markets measured by per-POP bids carry populations over 1 million.
The WEIGHTED average bid for all markets with an active bid stands at
$3.81/POP, $13.59/POP in the top-10 markets (as measured by per-POP
bids)... Stay tuned. |
