WW Associates Presents
2.5 Ghz Marketplace Awards &
Analyses
NIA 2005
February 16
2003 BRS Collectors Award
Nextel – Fleet afoot Bankruptcy Purchases
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$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
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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 ultrareliable 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
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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
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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
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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
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Size Matters
Density Counts
Pop Growth Rates
Enterprise Values
Landscape Changes
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Top 3, 10, 30, 50
More demand/supply
Future value premium
Big Business Centers
Intra/inter mkt alliance
Act Based on Own EBS Portfolio
Market # EBS Current Status/
Size
License Not under contract
Small Single Go with 1st offer regional/Clearwire
Talk to Nextwave,
Large Single Inquire Incumbent
Large Multi Talk to Clearwire,
Nextwave, etc.
Mix
Multi Go to Clearwire +
some to Nextwave
Seismic
Change
Cable entry,
new national
Big Bells or
Cable enter
Big Bells or
Cable enter
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
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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
Ask WW
Jim Wiesenberg
jwiesenberg@cox.net
602.690.4929