High Prices at Auction Make Tower Sale Likely

Verizon has announced that they are open to selling their tower assets, assuming the price is right. But with the AWS-3 spectrum auction still going on, currently in stage four, and having raise over $44 billion, it’s safe to assume the winners will come out owning a handful of spectrum with a hefty price tag. Bloomberg recently reported that Verizon Communications will likely top bidders in the auction to satiate their data-hungry users. Analysts at New Street Research have estimated Verizon’s bid to be as high as $20 billion, which will be added to Verizon’s current $107.6 billion long-term debt. “There is no better use of capital for Verizon than spectrum right now,” said Jonathan Chaplin, an analyst with New Street Research, who rates Verizon shares neutral. “All of their value is in wireless. Spectrum is the lifeblood of the wireless business.” This is the reason many believe Verizon will sell their 12,000 tower assets. The auction is expected to end in the next few weeks. Verizon will report earnings early this morning before the market opens and then host their conference call where its spending and financing priorities are sure to be discussed.