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T-Mobile US ( TMUS ) stands to gain from the availability of more radio spectrum than expected in a government auction of airwaves, though it’s not good for the wireless communications provider if the auction drags on, says a Goldman Sachs report. T-Mobile says it could spend up to $10 billion in the auction. Other bidders are expected to be AT&T ( T ), Verizon Communications ( VZ ) and cable TV firm Comcast ( CMCSA ). The complex “Broadcast Incentive Auction,” which started March 29, is expected to free up airwaves now owned by local TV stations. The Federal Communications Commission said Friday as much as 100 MHz of spectrum may be available for bidders in most U.S. markets. About 70 MHz had been forecast. The next step in the auction involves setting initial prices for the airwaves in specific cities. “While broadcasters will only sell if they get their desired prices, a large spectrum supply may yield attractive prices for wireless carriers,” Brett Feldman, a Goldman Sachs analyst, said in a report. “We view this as most positive for T-Mobile, which is looking to bolster its thin low-band spectrum position in this auction so it can provide coverage that is more competitive with AT&T’s and Verizon’s.” UBS analyst John Hodulik had a similar view. “Greater spectrum availability is a positive for T-Mobile, given its low-band needs and Comcast,” Hodulik said in a report. Shares in T-Mobile, controlled by Deutsche Telekom ( DTEGY ), are about even in 2016. T-Mobile stock edged down 0.4% in the stock market today . Analysts say one overhang on shares in Verizon, AT&T and T-Mobile is how much they may spend in the auction. Another view is that telecom mergers and acquisitions are on hold until the auction is over. While the auction has been expected to be over in the September quarter, it may drag on until the fourth quarter. That would be a negative for “ Dish Network ( DISH ) and T-Mobile, since many investors believe that their strategic options will be limited until the auction concludes,” said Feldman. Citigroup recently said Dish Network, which has amassed some 77 MHz of radio spectrum, could resume talks with Verizon over a possible sale after the auction ends. Scalper1 News
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