DCR Communications Inc. on Monday emerged as the winner for the third digital wireless phone license for Honolulu, offering to pay a hefty $53.6 million.
The company made its bid in a weeks-long Federal Communications Commission auction that ended on Monday, raising more than $10 billion. The FCC sold licenses for personal communications services, the newest generation of cellular phones.
DCR will be the third company to enter the PCS market on Oahu.
DCR is paying more than double what the other PCS carriers paid for their licenses - and getting less. The DCR license covers only Oahu, while Western Wireless Corp. and PrimeCo Personal Communications last year paid $22.3 million and $21.7 million, respectively, for state-wide rights.
But because winning bidders in the latest auction can pay on a 10-year installment plan at low interest rates, the prices aren't comparable to the earlier bids.
In those two rounds, the winners - mostly companies affiliated with the giants in the telecom industry - had to pay the full amounts within a few months. The financing rules were liberalized in the latest round because it was open only to small businesses and entrepreneurs.
Western Wireless, doing business locally as VoiceStream Wireless, launched its Oahu network in late February amid a heavy marketing blitz. PrimeCo is scheduled to begin service in the fourth quarter of this year.
DCR, a company backed by Westinghouse Electric Corp., Asian investors and others, is expected to begin work on its antenna network within several months. It hasn't said when service will start.
DCR also was the high bidder for the Big Island market, offering $3.6 million. Another company, New Wave PCS Inc., bid $2.5 million for the Kauai market.
The entrance of a third PCS carrier on Oahu will add to the competition faced by the two existing cellular companies, GTE Mobilnet and Honolulu Cellular.
Industry executives say the competition will lead to more competitively priced services, something already evident with just three players - the two cellular carriers and VoiceStream - in the market.
Whether competition from three PCS companies will hurt the cellular ones is unclear.
Kathleen Hishinuma, Hawaii president of GTE Mobilnet, said recently that her company's business has increased since VoiceStream entered the market.
Part of the reason, she said, is the heightened awareness among consumers of wireless phones.
That has come as a result of extensive advertising campaigns by the three companies, all of whom are offering special promotional deals.