Thursday, April 9, 2009 05:10 PM
Shaw keep 'em guessing at wireless auction
Andrew Willis
One goal in any poker game is to keep opponents guessing at your hand, and that's just what Jim Shaw is doing in the first round of the wireless auction.
Shaw Communications' CEO has the rest of the table scratching their heads as they weigh his $176-million initial wager on Tuesday, as its defies expectations that Mr. Shaw would simply buy space in order to flip it.
As a month-long auction begins, Shaw Communications is showing interest in wireless spectrum that overlaps his company's western Canadian cable customer base, along with licenses in Montreal and Toronto. In a research report Wednesday, RBC Dominion Securities said: “The size and breadth of Shaw's bidding shows that the company is definitely serious about wireless, counter to past comments from management.”
RBC Dominion used the metaphor of a high-stakes poker game to explain where this auction will go from here. “Some bidders may start small, while others will place big bids to maintain eligibility points between rounds,” the investment bank explained. “Consequently, [we] caution investors from drawing too many concrete conclusions from the bid results in the early rounds. Over the coming weeks (the auction will likely run ~30 days) bidders may begin withdrawing and true bid patterns will be revealed.”
“The key question is whether any of the new entrants can successfully acquire a national license area,” concluded the investment dealer.
