Fitch weighs in on spectrum acquisition


Fitch RatingsThere are a lot of companies in the telco and related industries that are considering upcoming opportunities to buy spectrum. International financial observer Fitch Ratings has some thoughts on the wisdom of such a move.

The observations are particular to the AWS-3 auction to be held 11/13/14.

In short, Fitch said, “Acquiring scarce spectrum resources is an important strategic key for many wireless operators and the upcoming advanced wireless services-3 auction scheduled for Nov. 13, 2014 will allow for gains that could help bolster long-term strategy.”

Fitch believes that the auction could bring in as much as $18B. Anywhere from $14B to $17.2B is expected to be spent on 50 MHz of paired AWS-3 licenses.
T-Mobile US and Dish Networks are said to be wildcards – if they show significant interest in the auction, they could drive prices to the high end of the range.

Sprint is said to be keeping its powder dry in anticipation of the incentive auction for television spectrum, which should be a bit of good news for the FCC.

Fitch said, “Verizon Wireless, AT&T Mobility, and T-Mobile have material financial flexibility within their credit profiles to acquire spectrum in the upcoming AWS-3 and TV broadcast auctions. Both Verizon Wireless and AT&T Mobility could spend $12 billion-$16 billion before pressuring the ratings. T-Mobile raised $3 billion of debt in anticipation of the auction. Fitch expects DISH, which has substantial flexibility, may acquire less spectrum if valuations are high and may have more interest in the lower value, uplink spectrum.”