Patrick,
"If the fcc estimates 500 million in revenue where do you come up with 5 billion?"
I haven't seen the numbers after round 5, Friday afternoon, but they're probably at or near $500M already. And the auction is just getting started. It'll probably go easily for several more weeks. You know the FCC is going to underestimate the revenue, just so they'll come out looking good when their number is blown away. The other "experts" have been estimating $4 Billion. And then there are estimates by the Strategis group (copied from the CVUS thread):
"Bids in FCC local multipoint distribution service (LMDS) auctions are likely to range from pennies per pop in rural areas to $25-$30 in major urban markets, according to study by Strategis Group. It predicts auction could generate $4 billion. Strategis predicts big market for LMDS, reaching "conservative" $7 billion annual revenue by 2007, making it what company calls best wireless technology since cellular."
Here's how the bidding is shaping up after round 4:
(also copied from the CVUS thread)
Top 10 prices after ROUND#4 (price=gross$/pop)
1. New York, NY - B321 - A
price - $3.78
highest bidder - Cortelyou
highest bid gross - $35,964,000
highest bid net - $35,964,000
2. Denver, CO - B110 - A
price - $3.29
highest bidder - ALTA Wireless
highest bid gross - $6,830,000
highest bid net - $3,756,500
3. Pheonix, AZ - B347 - A
price - $3.27
highest bidder - ALTA Wireless
highest bid gross - $7,872,000
highest bid net - $4,329,000
4. New Orleans, LA - B320 - A
price - $2.99
highest bidder - Telecorp
highest bid gross - $4,094,000
highest bid net - $2,251,700
5. Philadelphia, PA - B346 - A
price - $2.70
highest bidder - Cortelyou
highest bid gross - $15,928,473
highest bid net - $15,928,473
6. SLC - Ogden, UT - B399 - A
price - $2.70
highest bidder - WNP
highest bid gross - $3,531,000
highest bid net - $1,942,050
7. Orlando, FL - B336 - A
price - $2.48
highest bidder - BCK/Rivga
highest bid gross - $3,110,000
highest bid net - $1,710,500
8. San Diego, CA - B402 - A
price - $2.48
highest bidder - NEXTBAND
highest bid gross - $6,183,000
highest bid net - $6,183,000
9. Seattle - Tacoma, WA - B413 - A
price - $2.48
highest bidder - NEXTBAND
highest bid gross - $6,705,000
highest bid net - $6,705,000
10. Los Angeles, CA - B262 - A
price - $2.48
highest bidder - NEXTBAND
highest bid gross - $36,011,000
highest bid net - $36,011,000
The top markets are barely getting bid on yet. No San Francisco here, nor Chicago, nor DC, Boston, Dallas, Miami, etc. So I think we've just begun. You know these markets are going to go for more than SLC, Phoenix, Orlando, etc. To get anywhere near Strategis' numbers, there is a long way to go. At least a factor of ten.
"If the auction only generates 500 million to 1 bill does your outlook change at all?"
Well, we won't see the strong short term pop that we could if the auction raises $5B and estimates for WinStar's licenses reach $60 per share, but we've come a long way from a year and a half ago when we were praying for strong license values to support the stock price. We're gonna be valued from here on out on growth rates, revenues, and EBITDA. Takeover value might be a lot less than what we've hoped for, but most are hoping for no takeovers anyway. Interest in the values for licenses will probably start to fade into the background. |
