Citi Predicts Incentive Auction Could Hit $48 Billion in Bids
The forward part of the FCC incentive auction starts Tuesday and one wild card is whether Dish Network will come in in a big way, Citi Research said in a Thursday note to investors. Investors are questioning whether the auction…
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“will be tepid or robust,” wrote Citi analyst Michael Rollins. “DISH has a bigger war chest than expected, and we now see bidding capacity up to $47.5bn,” the note said. “We estimate economic value for the spectrum at $1.99/MHz-POP and believe the auction can reach $37-48bn using 60-80 MHz sold.” Citi expects the auction to close in early 2017, the note said. Citi still likes “Buy-rated T-Mobile given its strategic optionality and bidding flexibility,” the firm said. “DISH retains valuable spectrum that we believe Verizon should pursue after the auction ends.” Dish said recently it had raised a few billion dollars and could use it for spectrum (see 1608030045).