Verizon spectrum sale announcement impacts Clearwire share price (USA)
The share price of wireless broadband carrier Clearwire Corp., fell the most in the past five months, following Verizon’s announcement claiming that it plans to sell some of its spectrum, according to a report by BN.
As per the report, Clearwire fell 14 percent to $1.63 at 1:24 p.m., after retreating 20 percent for the biggest decline since Nov. 18. The Bellevue, Washington-based company’s shares have dropped 67 percent in the 12 months before today.
As per a company statement, Verizon plans to conduct an open-sale process for all of its 700 megahertz A and B spectrum licenses, covering dozens of major U.S. cities and some smaller markets.
Qualcomm, AT&T in talks over spectrum sale
If sources are to be believed, Qualcomm Inc. has held talks with AT&T Inc. over the possible sale of spectrum the chipmaker acquired for its mobile-television service.
Qualcomm paid $683 million for rights to use the 700 megahertz spectrum in federal auctions between 2003 and 2008, and started Flo TV in 2004 to allow users to watch broadcast TV on their mobile phones. The San Diego-based company suspended sales of Flo TV after it struggled to attract subscribers.
According to Qualcomm Chief Executive Officer Paul Jacobs, he is considering a range of options for the Flo TV business, including putting it in a joint venture or shutting it down and selling the spectrum.
As per the sources, the company has spoken with several carriers, including AT&T. Verizon Wireless, the country’s largest wireless operator, and T-Mobile USA are not currently in talks with Qualcomm.
According to Bill Davidson, a Qualcomm spokesman, the company is in discussions with a variety of interested parties and is continuing to evaluate other options.
Spectrum Sale Cost India $31 Billion: CAG
The government’s auditor believes that India’s federal treasury may have lost as much as US$31 billion in revenue after telecommunication airwaves were sold below market rates two years back.
According to CAG, the Indian government collected only US$2.74 billion from the sale of the 2G wireless spectrum to companies. The airwaves were sold in 2008.
Andimuthu Raja resigned on Nov. 14 as the nation’s telecommunications minister after a year-long investigation into the sale of the wireless spectrum. The Central Bureau of Investigation has been examining the role Raja and the Ministry of Communications had in the pricing of the permits since October last year while the Supreme Court has been hearing public interest petitions on the subject.
According to the report, the auditor calculated the maximum estimated loss based on the prices at which the third-generation airwaves were sold in May. Based on another model, the under-pricing of 2G spectrum led to a loss of $11.84 million.
According to CAG, DoT failed to consider applications on a first come, first serve basis, allowing some applicants to jump the queue. The process by which the department issued the permits, called Universal Access Service, or UAS, licenses, lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner.
As per the report, the department issued 122 new licenses to use 2G spectrum in 2008. 85 of the licenses were given to ineligible recipients. Companies including Unitech Ltd., Tata Teleservices Ltd., Shyam Telelink Ltd., (Sistema Shyam Teleservices Ltd.) and Swan Telecom Ltd.,( Etisalat DB Telecom Pvt.), sold stakes in their wireless ventures at significant premiums to the price they paid for spectrum.
The report further showed that these companies, created barely months ago, deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means for getting UAS licenses and thereby access to spectrum. Owners of these licenses, obtained at unbelievably low price, have in turn sold significant stakes in their companies to Indian or foreign companies at high premium.
Clearwire plans to lift up US$5 billion from spectrum sale
Clearwire is planning to sell its abundant supply of spectrum in a bid to raise up to US$5 billion to fund network expansion next year.
According to reports, the U.S. WiMAX network operator’s spectrum sale is currently in its second round and has attracted interest from some of the country’s telecoms industry big guns. The bidders include AT&T, Verizon Wireless, T-Mobile USA owner Deutsche Telekom, and Time Warner Cable, as well as Sprint Nextel, which holds a majority stake in Clearwire.
As per the report, the bidding is already in its second round and is being managed by Deutsche Bank. Clearwire is believed to be selling up to 40MHz of spectrum per market, less than half of its total capacity of over 100MHz in most areas.
Clearwire is known to have held talks with T-Mobile USA about a possible investment in the company, or the sale of spectrum.
According to reports, citing UBS analyst John Hodulik, Clearwire needs to raise around US$2 billion by Q4 in order to fund the expansion of its network in early 2011.
Winning 3G bid might be used as base price for future sale: DOT
www.WirelessFederation.com/news: The base price for all airwaves sale in the future will now be based on the winning bids in each circle for the upcoming third generation (3G) spectrum in India. It may also be recommended by TRAI that the current policy of allocating 2G spectrum based on the operators’ subscriber numbers should be stopped and instead of that the international policy of auctioning should be followed.
As per the recommendation, in the immediate future, the telecom operators will have to shell out huge amounts for radio frequencies besides shelling out the equivalent or more money for 3G spectrum for all additional frequencies.
Rs 25,000 and Rs 35,000 crore has been expected by Government through this auction. By bringing out this proposal, DOT is also expected to rake in an equivalent amount from the 2G spectrum sale in the next fiscal. All fresh allocations of 2G spectrum has been frozen by DOT.
T-Mobile’s $4 Billion Tops FCC’s $14 Billion Spectrum Auction
The FCC’s Advanced Wireless Services (AWS) spectrum auction has concluded with 1,087 licenses auctioned off for nearly $14 billion.
T-Mobile, the top bidder, declined Monday to discuss in detail its plans for the licenses, citing FCC restrictions. The company, a unit of Germany’s Deutsche Telekom AG, said it bid about $4.182 billion for the licenses covering the continental United States, Hawaii, Puerto Rico/U.S. Virgin Islands and Alaska. T-Mobile’s new licenses also cover New York City, Los Angeles, and Chicago.
T-Mobile is the fourth largest mobile phone service provider in the U.S. Like the largest provider — Cingular Wireless ” T-Mobile uses the European-developed GSM standard, which is being upgraded to 3G network technology. The second top bidder in the auction was Verizon Wireless, which offered $2.8 billion for 13 licenses. Verizon Wireless, ranked second in size in the cell phone category, uses CDMA technology as does the next-in-size, Sprint.
If all the funds bid in the auction are collected, the auction will go down as the highest amount ever raised in a spectrum sale.
Steve Largent, president and CEO of wireless trade association CTIA, praised the FCC for running a “smooth and successful auction” and said the coming 700 MHz auction will be important in providing wireless services for consumers and the public safety community.
Source- http://www.informationweek.com
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