The Italian C-band spectrum auction wrapped with record prices achieved, and higher than forecast. The result significantly impacts the likely prices to be charged for a similar auction of satellite C-band assets in the US.
Italy auctioned 200 MHz of C-band spectrum and achieved $0.42 per MHz ‘pop’*.
Equity analysts at investment bank Exane/BNP said the Italian market has less attractive characteristics than the US market because mobile ARPUs are lower and spectrum licences shorter. “In other words, US spectrum pricing could be higher. However, the Italian auction was a particularly competitive one driven by the presence of a new entrant and the very structure of the combinatorial clock auction. Note that Finland also auctioned C-band spectrum but this auction was less competitive (3 blocks of 130 MHz for 3 bidders) and only netted $0.04 per Mhz POP. In other words, the design of the US C band auction will be an important driver of value.”
The bank reminds investors that even at just $0.19 per MHZ pop, we estimate the US C-band spectrum could be worth €10 per SES Share and €3 per Eutelsat share.
*MHz pop is the name of a telecommunications industry measurement. It refers to one megahertz of bandwidth passing one person in the coverage area in a spectrum licence. If you have 6 MHz of spectrum reaching a region of 1 million people, you have 6 million MHz pops