NextWave Wireless Inc. said it has retained Deutsche Bank AG and UBS Investment Bank to explore the sale of its remaining wireless spectrum holdings in major U.S. metropolitan markets, which could bring a large capital infusion. Under normal circumstances, Dealscape might overlook such news, but once upon a time NextWave was bankrupt, and it almost lost its spectrum assets if not for an unprecedented bankruptcy case.
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San Diego-based NextWave originally won rights to the spectrum in 1996, when it bid $4.7 billion for 63 licenses in an FCC auction. But the company filed for bankruptcy protection in June 1998, having paid only $474 million. Consequently, the FCC repossesed the spectrum rights and reauctioned the licenses in January 2001, receiving $16 billion in bids from the largest wireless carriers -- despite facing a lawsuit from NextWave over the seizure. The case ultimately went to the Supreme Court, which ruled 8-to-1 in favor of NextWave.
Since exiting bankruptcy, NextWave has become a developer of semiconductors for WiMax wireless technologies. Consequently, it no longer needs the spectrum.
NextWave's press release doesn't offer a value for the licenses, which cover 250 million people in the U.S. However, at the time of its bankruptcy and the Supreme Court ruling, the spectrum was reportedly valued between $6.5 billion and $8.9 billion. But it sold some of the spectrum to Verizon Wireless in 2005 for $3 billion and a series of smaller chunks to Cingular (now AT&T Inc.), MetroPCS Communications Inc. and the FCC totaling almost $3.75 billion.
Recently, the FCC auctioned off spectrum in the 700MHz band for almost $20 billion to EchoStar Communications Inc., Verizon Wireless Inc. and AT&T. Bidders left in the cold may be the likely buyers of NextWave's offerings. - Matthew Wurtzel
See NextWave press release from BusinessWire
See story about recent FCC auction from TheDeal.com
See story about NextWave's 2005 deal with Verizon from The Deal newsweekly
See story about NextWave's legal victory from The Deal newsweekly
