ww associates presents 2.5 ghz marketplace awards & analyses nia 2005 february 16
TRANSCRIPT
WW Associates Presents
2.5 Ghz Marketplace Awards & Analyses
NIA 2005 February 16
2003 BRS Collectors Award
Nextel – Fleet afoot Bankruptcy Purchases
• $145 Mil for what cost WorldCom $1 Bil
• $51 Mil for Nucentrix
• Gained major rights in about 100 M Pops
• Rejected many EBS & BRS leases in each
2003 Stealth Dealmaker Award
Flux Fixed Wireless
• Form D SEC filing lists 2 shareholders
• 1 to a New Yorker for $6.3 M in shares
• 1 to a Texan entity for $7.5 mil in shares
• Speculation - HITN based in New York and Dallas home of original Clearwire
2004 BRS Collectors Award
Fixed Wireless Holdings dba Clearwire• 25 deals per FCC weekly transfer releases• 153 call signs/309 channels/1555 BRS MHz• Cover 58 markets including 25 BTA holdings• F blocks in Atlanta & Seattle• Remainder primarily tertiary markets• Raises $160 M in August Private Placement
2004 Defenders Cup Award
Nextel bolsters its positions in large markets:
• Philadelphia F block
• Dallas & Ft Worth E blocks both acquired
• Austin E&F blocks each acquired
• Washington H channel added
• Also a few bundled and other licenses
2004 Big Market Player Award
Nextwave Telecom buys from IP Wireless
• Las Vegas 4 BRS channels for $2.25 M
• Archdiocese of NY lease rights $12.7 M
Nextwave Telecom to pay Archdiocese NY:
• $1 Mil upfront plus $1.5 mil transition costs
• $2.2-3.6 M rent/royalty/yr for 15 years
NPV about $.10/MHz/Pop in each deal
2005 Sprinters Award
• 28 market De Facto Lease deal with Sprint
• Small Upper Midwest & West Markets
• Clearwire extends 2ndary market position
What all this activity mean
• Last 2 years great “Buyer’s Market”• Bells only feigned interest in 2003 fire sales• Clearwire only game in many small towns• Nextwave 1 toe in 2 big markets as wholesaler• “Sprint Nextel will have the capability to
deploy new services on the two companies’ 2.5GHz combined spectrum holdings that together cover 85 percent of the households in the top 100 markets.” (merger release)
+ Recent Legg Mason Analyses
• On Sprint -Nextel:• “…this time around
MMDS is hotter property, and there may be new opposition to its concentration…”
• 1/20/05 Wireless Merger Reviews
• On 2.5 Ghz rebanding:• “Bells and cable lose
if duoply upset by third pipe to home”
• 2/7/05 Cheat Sheets
+ AT&T Labs Slide at WCAI
• In U.S., 2.6 GHz and 700 MHz are of key importance
• Licensed spectrum is clearly important for ultra-reliable operation, esp. for mission critical use– WiMAX ForumTM certification profiles needed
• Unlicensed operation is likely to be a powerful force in future:– Unlicensed operation key factor in popularity of
802.11– Shortage of licensed spectrum
+ Sprint Nextel Transfer Filing
• Wireless Interactive Multimedia Services
• 2-4 Mpbs to fixed and portable devices
• VOD, games, bus work, on site conferences
• Fingerprint ID, Bio Scanning, Crime locale
• Average 33 MHz licensed BRS per market
• Average 56 MHz leased EBS-BRS/market
EBS holds key to
• Creating a “Lessor’s” market
• Has most of today’s independent spectrum
• Cable Consortium is reviewing its options
• Integrated Providers interest in metro hubs
• Increasing universe to “Tipping Point”
Know your Contract
• Technology usage restrictions
• Past, present or future expiration date
• Be cognizant of any holdover rights granted
• Make your availability known as able
Consider Market Demographics
• Size Matters• Density Counts• Pop Growth Rates• Enterprise Values• Landscape Changes
• Top 3, 10, 30, 50• More demand/supply• Future value premium• Big Business Centers• Intra/inter mkt alliance
Act Based on Own EBS PortfolioMarket Size
# EBS
License
Current Status/ Not under contract
Seismic Change
Small Single Go with 1st offer -regional/Clearwire
Cable entry, new national
Large Single
Talk to Nextwave,
Inquire Incumbent
Big Bells or Cable enter
Large Multi Talk to Clearwire, Nextwave, etc.
Big Bells or Cable enter
Mix Multi Go to Clearwire + some to Nextwave
Big Bells or Cable enter
Fair Market Value
Point of indifference between a willing buyer and a seller.
A concession by either side can get a deal done.
A bird in the hand worth two in bush
NY Times Feb 8th
• Article Headline:
“Valuing MCI in an Industry Awash in Questions”
• S&P analyst Tagline:
“The price tag depends on who the buyer is”
Take-away Comments
• Have more than one party to negotiate
• BLS/FON-NXTL may bid up in metros
• Three bidders can create hockey stick effect
• Bulls and bears get rich, holdouts can starve
• Incumbents may pre-empt seismic change
• New entrants may only pay more initially
