Verizon Licks Its Cheap Megahertz Pops

Since the winners of the government spectrum auction were released Thursday, analysts have been working overtime on their spreadsheets to figure out who got the best deals. The latest from Rebecca Arbogast, who follows the market closely for Stifel Nicolaus, concludes that Verizon, which went into the auction well behind AT&T in the amount of spectrum it owned, got the best deal. It purchased a total of 8.5 billion MHz pops for $9.36 billion. That comes out to an average $1.10 per MHz pop. That average is made up of the nationwide C block, which was relatively inexpensive, as there was little competition, and some very competitive local licenses. AT&T bought far less capacity for a much higher price. It bought a total of 2.1 billion MHz pops for $6.64 billion. That represents $3.15 per MHz pop. The most expensive license was in the Chicago area. After heated bidding among Verizon, AT&T and US Cellular, the regional B block license for Chicago was sold to Verizon for $892 million, or $9.19 per MHz pop. The other expensive regions included Seattle ($7.79 per MHz pop to AT&T), Oklahoma City ($7.32 per MHz pop to Verizon); Pierce, Wis. ($6.51 per MHz pop to AT&T), Milwaukee ($6.17 per MHz pop to AT&T), and Philadelphia ($6.05 per MHz pop to AT&T). The companies with the third and fourth most winning bids in the auction were Dish Network and Qualcomm. They bought spectrum that is designed mainly for one-way broadcasts, presumably of wireless television service. As this spectrum is less useful, it sold for far lower prices than the spectrum suitable for cellphone calls.
http://bits.blogs.nytimes.com/2008/03/21/verizon-licks-its-cheap-megaher...
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