T-Mobile US Inc (TMUS) Sees Ray Of Hope In Airwave Auction Not Getting Delayed
There is some kind of hope for T-Mobile US Inc (NYSE:TMUS) in respect of the spectrum, which it lacks. That is also subject to airwave auction taking place as scheduled next year in the first half. It is for this main purpose the company was interested in aligning or merging with DISH Network Corp (NASDAQ:DISH). However, it would not come so easily for the telecom service provider since hectic competitions are expected, and all the big players will remain in the fray.
Concern On Proposed Rules
There are already concerns voiced by the TV broadcasters on the proposed rules. The Federal Communications Commission will meet next week to take steps to ensure that the wireless airwave auction takes place in the first half of next year itself. That will benefit T-Mobile US Inc (NYSE:TMUS), according to Guggenheim Partners’ analyst, Paul Gallant. The July 16 meeting will also witness a vote on the difficult composition of the Broadcast Incentive Auction.
There is also a threat that the auction might be pushed back after the presidential election. That means a delay for those who are not holding enough spectrum. Verizon Communications Inc. (NYSE:VZ), AT&T Inc. (NYSE:T), and Sprint Corp (NYSE:S) will also be participating in the auction.
Bidding For Small Carriers
The FCC is planning to allocate about 30 MHz of airwave for bidding that is limited to the small telecom carriers, which might be a favorable factor for T-Mobile US Inc (NYSE:TMUS). However, both T-Mobile and Sprint Corp (NYSE:S) are seeking more allocation of the airwave. It remains to be seen whether the next week meeting will discuss anything on this issue. The FCC chairman was firm that that the existing allocation was sufficient for the smaller companies.
The earlier auction of AWS-3 ended in late January this year. The auction could generate as much as $41 billion after adjusting for discounts offered to the bidding partners like DISH Network Corp (NASDAQ:DISH), a satellite broadcaster. The company needs to connect a minimum of 40% of the airwave before the year 2017.
Reconfigure For Wireless
Currently, domestic TV stations are having wide swath of spectrum. The regulators want to reconfigure them for the purpose of wireless broadband services. However, that can be possible only if the TV broadcasters are ready to give up their spectrum rights either in part or whole. The FCC is hoping for 70-80 MHz from the 120 MHz airwaves currently they have.
A research report from Wells Fargo & Co (NYSE:WFC) said that the regulator has held back its move for a pricing mechanism. That was obviously because broadcasters fear that it would result in lower valuations of the airways. However, a group of smaller TV Stations has been seeking favorable changes. The Expanding Opportunities for Broadcasters Coalition wanted a reduction in opening prices of TV stations by $8 million. In any case, T-Mobile US Inc (NYSE:TMUS) has hopes of getting some airways from the next year auction.
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