- A total of 200 spectrum licenses are up for grabs in the AWS-3 auction, which kicked off Tuesday
- Bidding got off to a sluggish start, with 39 markets seeing no bids at all
- In 4-bidder markets, New Street Research speculated that it is EchoStar - not SpaceX - bidding alongside the big three carriers
The AWS-3 auction kicked off this week, with around 200 licenses formerly owned by EchoStar on the block. But with three rounds down, it appears that the auction anticipation – particularly around SpaceX’s involvement – has proved bigger than actual operator appetites.
Bids totaled $59.3 million at the end of three rounds of bidding, with that number jumping only about $5 million from $54 million at the end of round two. Out of the 200 licenses up for grabs, 99 received interest from more than one participant and another 62 from a lone bidder. The remaining 39 licenses, however, had no bids at all.
It’s worth noting that $59.3 million is a far cry from $2.9 billion – EchoStar inked a deal with the FCC when giving up the licenses that it would be on the hook for any shortfall between the auction proceeds and that figure.
“With only 52 out of 200 licenses receiving bids from 3 or more bidders, the overall demand for these licenses seems low,” New Street Research’s David Barden wrote in a note to investors at the end of Round 2. “We suspect we will see protracted bidding on the 3 biggest markets but not much else outside those markets.”
The FCC’s auction dashboard showed licenses in Madison, Wisconsin and Honolulu, Hawaii pulled in the most bids, with five bidders apiece.
Licenses in 14 other markets – including New York City; Chicago; Boston; Charlotte, North Carolina; Sarasota, Florida; and Norfolk, Virginia – received four bids each. The license in New York fetched the highest price at $16.9 million, with two Chicago licenses a distant second at $6.6 million and $5.1 million, respectively.
The biggest question is who is bidding in the busiest markets.
Barden speculated in the aforementioned note that “some local bidders” are likely duking it out with the big three national carriers in Madison and Honolulu. But in the four-bidder markets, it’s less clear if the fourth participant is EchoStar – potentially trying to drive up prices – or SpaceX.
“Is this Charlie trying to support the valuation and ensure he’s not on the hook for any penalty? Or is this SpaceX joining the party? We think it is most likely the former vs. the latter,” Barden wrote.
Two more rounds of bidding are set to take place Wednesday, 1-2 pm and 4-5 pm ET. Additional hour-long rounds are planned for 10 am, 1 pm and 4 pm ET on Thursday.