Recent Market Falls Could Affect Wireless Airwaves Auction
The bidding for a valuable new chunk of wireless airwaves the federal government is selling was expected to raise $15 billion—or more money than any wireless auction in U.S. history. But with stock markets crumbling, expectations for the auction that begins Jan. 24—called Auction 73—are sliding fast, along with the shares of likely bidders.
Since the beginning of the year, AT&T’s (T) market value has tumbled by $29.5 billion, while Verizon’s (VZ) shares are collectively worth $16.5 billion less. The market’s plunge on Jan. 18 may have marked the biggest single-day loss in telecom market value ever, says Blair Levin, an industry analyst with Stifel, Nicolaus. Even Internet search giant Google (GOOG), which has been looking to purchase the spectrum licenses to build a new wireless network that would compete with the established players, has lost 20% of its value since New Year’s.
A Lack of Bidders?
Combined with the credit crunch, these rapidly shrinking stock values are severely crimping the sector’s financing options for big spectrum purchases in the Federal Communications Commission’s auction. Many potential bidders may now be unwilling, or unable, to bid as much as they’d intended previously
