US DTH giant Dish Network’s shares jumped nearly 4% yesterday as the country’s AWS-3 spectrum auction broke through its US$10.1bn reserve price in less than a week.
The strong start is a boost for Dish because the mid-band spectrum on offer is…
US DTH giant Dish Network’s shares jumped nearly 4% yesterday as the country’s AWS-3 spectrum auction broke through its US$10.1bn reserve price in less than a week.
The strong start is a boost for Dish because the mid-band spectrum on offer is similar to frequencies it already owns.
New Street Research analyst Jonathan Chaplin said the current bidding implies a value of US$20bn for Dish’s existing airwaves, assuming 60% of the paired spectrum value is attributed to downlink.
“Prices have been rising an average of 18% per round,” he said.
“If bidding continues at this pace through four rounds tomorrow, the average for paired spectrum would be closing in on US$2 [per MHz-POP], for a total auction value of US$31bn.”
The auction kicked off on 13 November and there are 1,614 licenses up for grabs in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz spectrum bands. Bidding is conducted anonymously, although Dish and local telcos Verizon, AT&T and T-Mobile US are widely expected to be the biggest players. There are 70 qualified bidders.
Dish dominated the country’s H block spectrum auction earlier this year, sweeping up all the licences after paying the US$1.564bn reserve price.
The satellite broadcaster plans to use its spectrum holdings to deploy a terrestrial LTE network across the US.
Its chairman Charlie Ergen has reportedly told Deutsche Telekom, the owner of T-Mobile US, that it may be interested in buying its US mobile operator after the auction is completed to help build out the network.
Meanwhile, Ergen could be set to take a 60% stake in LightSquared under the troubled US satellite/terrestrial venture’s latest restructuring plan.
The AWS-3 sale is likely to run for many weeks based on previous auctions in the country. The FCC telecoms regulator has said it will be paused on 26 November because of the US Thanksgiving holiday, to be resumed on 1 December. It had raised US$16.43bn as SatelliteFinance went to press, although some bidders have applied for discounts that could affect the total amount.
Dish’s shares closed up 3.94% to US$67.85.
