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Will NextWave’s Planned Sale of its Spectrum Holdings Offer Opportunities for Smaller Carriers?
NextWave has announced that it plans to sell its US spectrum holdings. But will this help or hinder smaller players?
NextWave has retained Deutsche Bank and UBS Investment bank to assist it in the sale of its US spectrum having concluded that it can make a solid business from its equipment business alone. The advantages to NextWave are considerable as the recent 700 MHz auction demonstrated that carrier are willing to spend big for licensed spectrum and thus NextWave could garner significant cash for its holdings, which are considerable.
The numbers are compelling. NextWave's US spectrum holdings include AWS spectrum at 1.7/2.1 GHz, 2.3 GHz WCS spectrum and 2.5 GHz spectrum split between BRS and EBS leases that pass over 251 million POPs. In fact NextWave holds 154 AWS licenses, 30 WCS and 39 EBS and BRS licenses. This is a pretty vast footprint.
In the past, NextWave has expressed interest in partnering with carriers to exploit this spectrum in an attempt to help drive its radio products business. But that effort seems to have largely never gotten off the ground. A number of regional players in the US could have greatly benefitted from this spectrum.
So who would likely buy this spectrum? The AWS component of NextWave's holdings are its largest so figure current AWS spectrum holders to bid strongly such as T-Mobile, Comcast, Leap Wireless and Verizon. NextWave's WCS spectrum is not a likely target for Verizon however as that company sold its own WCS holdings recently to Horizon Wi-Com.
The question is will the sale of this spectrum trickle down to smaller players? I hate to be negative but I seriously doubt it. The big players will bid to warehouse it as usual and most of it will lie fallow until they are ready to do something with it, if they ever are. Can some smaller carriers win a few markets? Well, yes that could well happen, but I would expect to see whole block bidding most likely by major players.
Tim Sanders
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