Spectrum leasing market moves forward, albeit sporadically

Anterix this week announced that a Texan utility agreed to buy its 900MHz spectrum holdings for a total of $30 million, or $1.67 per MHz-POP.

The per MHz-POP calculation is applied to most spectrum transactions and reflects the number of people covered compared with the amount of spectrum available, though it can be affected by a wide variety of factors.

The Anterix agreement helps to move the market for spectrum leasing and buying a step forward. However, it remains a space with plenty of players, a diversity of use cases, and an unclear future.

Not surprisingly, Anterix's Rob Schwartz cheered the deal. "This agreement ... adds a new type of customer to our nationwide network of utility networks, as LCRA [Lower Colorado River Authority] is a public power generation and transmission utility that is also a water management utility. This agreement highlights the benefits of private LTE beyond the investor-owned electric utility space that has thus far been the major focus of Anterix's efforts," he said in a release.

Schwartz, the company's CEO, also pointed out that LCRA is the company's latest spectrum leasing customer. "LCRA now joins Ameren, SDG&E, Evergy and Xcel Energy whom collectively will reap the benefits of the industry wide collaboration along with members of our Utility Strategic Advisory Board (USAB) and the more than 100 technology and solution providers in the #AnterixActiveEcosystem," he wrote in a LinkedIn post.

Figure 1: (Source: dpa picture alliance/Alamy Stock Photo)

The agreement is important for Anterix because the company had touted widespread interest in its spectrum among utilities – but it has been slow to sign up more customers beyond its first few wins.

Anterix's business model is basically that of a spectrum landlord. The company worked to obtain ownership of small slivers of 900MHz all over the US, and is now working to lease those holdings to utilities and others so that they may build their own private wireless networks. However, its deal with LCRA is an outright sale, not a lease. Nonetheless, the company continue to look for additional customers that want to lease its spectrum.

In that model, Anterix is not alone.

The leasing game

Other companies pursuing a similar model include Ligado, Dish Network, Globalstar and WCO Spectrum, among others. Each has its own unique take on the market.

"We are in negotiations with terrestrial users representing hundreds of millions of dollars of annual spectrum leases for Band 53," said Globalstar's Jay Monroe during his company's most recent quarterly conference call, according to a Seeking Alpha transcript.

"Globalstar, at any time, could start to lock down final terrestrial spectrum lease agreements," acknowledged the financial analysts at B. Riley Securities in a recent note to investors.

Globalstar, a longtime satellite operator, is the company providing satellite services to Apple's iPhone 14 devices. Now, the company is also hoping to lease some of its spectrum holdings as a way to further cash in on the growing market for "direct to device" (D2D) connections between satellites, phones and other gadgets.

Similarly, Ligado Networks has indicated its own interest in potentially leasing some of its spectrum to utilities and other users. Like Globalstar, Ligado promises to offer customers the ability to connect to both ground-based transmission sites as well as satellites.

Other spectrum-leasing companies are focusing on more narrow areas. WCO Spectrum, for example, is working primarily in the terrestrial 2.5GHz spectrum band. And part of its efforts involve purchasing the spectrum licenses that underpin T-Mobile's midband 5G network and then leasing that spectrum back to T-Mobile. WCO recently announced that it appointed former two-term Los Angeles Mayor Antonio Villaraigosa as chairman of its board of directors.

Dish Network is also pursuing spectrum-leasing agreements. The company has suggested that it could offer relatively simple leasing deals alongside other models where it would provide equipment, management services and even "slices" of its commercial 5G network.

Dish's spectrum was recently put into action in a new private wireless 5G network for the US Naval Air Station on Whidbey Island, a major naval operation in the Pacific Northwest.

Private wireless struggles

However, most such spectrum leasing deals are intended to provide the licenses necessary for customers to build their own private wireless networks. But many of the major players in the private wireless networking industry have reported sluggish sales of those products.

Moreover, there are more spectrum options beyond those available from the likes of Dish and Globalstar. For example, the FCC recently released much of the 6GHz band for unlicensed uses – meaning, that spectrum is free for anyone to use.

And the agency may release more such spectrum in the future. For example, the FCC is considering opening up a portion of the 5GHz band specifically for drone operations. That move could shift some potential spectrum leasing customers toward other options.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano