Are Globalstar, Anterix, NextNav and Ligado ushering in a new era of 5G?Are Globalstar, Anterix, NextNav and Ligado ushering in a new era of 5G?
As the dust settles on the FCC's blockbuster C-band spectrum auction for 5G, investors appear to be turning to other potential sources of spectrum once thought unusable or uninteresting.
June 21, 2021
Earlier this year, Verizon, AT&T and T-Mobile collectively spent almost $100 billion on C-band spectrum licenses for 5G. Incredibly, all that spending didn't even cover the billions of additional dollars in network equipment that will be necessary to put that spectrum into use.
Now, as the dust settles on all those eye-watering expenditures, investors are beginning to look at other spectrum license holders in a new light.
"We believe Globalstar and its sponsors, after years of development, support and patience, are at long last starting to realize a return on satellite system and spectrum assets, making 2021 an excellent time, in our opinion, to buy Globalstar before the market digests this change," wrote the financial analysts at B. Riley Securities in a recent note to investors. The analysts gave Globalstar's stock a "buy" rating.
Globalstar is one of a handful of companies that holds spectrum licenses that could eventually make their way into terrestrial 5G networks. Whether those licenses will underpin a private 5G network for an enterprise or a public 5G network for a big mobile network operator remains to be seen.
Regardless, there's clearly growing interest around the tantalizing possibility that such spectrum licenses once considered mostly unusable or of little value may now fetch a pretty penny from the right customer. And that's shining a new light on a range of smaller companies in the telecom industry. Consider:
As noted by the B. Riley Securities analysts, Globalstar owns S-band, L-band and C-band spectrum assets around the world. Further, the company obtained 3GPP approval for 5G operations in its 2.4GHz S-band spectrum, dubbed Band 53, and Qualcomm earlier this year agreed to include Band 53 support in its new 5G X65 smartphone modem. Already Globalstar and Nokia said the Port of Seattle plans to use Band 53 for a private wireless network. Perhaps even more intriguing for Globalstar investors, the company earlier this month disclosed a mysterious $37 million "advance payment." The B. Riley Securities analysts believe that cash is tied to the company's 2.4GHz S-band spectrum. "Certainly, the cleanest outcome for Globalstar investors, in our opinion, would be if a carrier, cable company, or aspiring big tech firm (e.g., Google, SpaceX/Starlink, Amazon/Kuiper) were to decide to buy Globalstar outright to gain its S-band, L-band, and C-band spectrum assets," they wrote.
Anterix last year received FCC approval to lease its 900MHz spectrum to utilities and others. The company recently said it now counts two paying customers (which combined account for around $100 million in contracted proceeds), as well as 12 other utilities that are currently testing operations in the company's spectrum. Anterix officials hope the company may count up to $1.8 billion in contracted proceeds from its spectrum leasing efforts by 2024.
On Monday, the 3GPP approved the use of Ligado's 1600MHz L-band spectrum, dubbed Band 24, for 4G and 5G operations. The move paves the way for vendors to build 5G and LTE products compatible with Ligado's midband spectrum holdings. The company said it's "currently developing a 5G mobile private network solution designed to bring the power of next-generation networks to the energy, manufacturing, health care, transportation and other critical infrastructure sectors."
Finally, NextNav earlier this month announced a $408 million merger agreement with a special purpose acquisition company (SPAC) called Spartacus Acquisition Corporation that will make NextNav a public company. NextNav owns nationwide spectrum licenses in the 900MHz band. It's currently using that spectrum to build a nationwide network that improves the accuracy of GPS signals with indoor and vertical information. Such technology could help 911 operators locate callers inside skyscrapers, for example – a noteworthy application considering the FCC recently required the nation's mobile network operators to start obtaining such information. According to NextNav, it is already providing its GPS-augmentation services to AT&T's FirstNet and is testing them with Verizon. (Verizon's well-documented interest in precise location data was again underscored by the company's announcement Monday of its acquisition of Senion, a startup developing an indoor positioning platform.)
To be clear, there is no real comparison between the FCC's recent C-band spectrum auction and the spectrum holdings of companies like Anterix, Ligado, Globalstar and NextNav. After all, the FCC's auction that ended in February released an astounding 280MHz worth of spectrum in the 3.7GHz band. That's far more overall spectrum than the FCC typically releases in its spectrum auctions, and it's dramatically more spectrum than companies like Globalstar or Anterix hold the rights to.
Nonetheless, the results of the FCC's auction highlight the sky-high values for some spectrum licenses as 5G networking technology begins to mature. And it also comes amid growing demand among enterprises and others for private wireless networking options. Such private networks could connect everything from mining robots to oil and gas monitoring equipment.
Meaning, if AT&T or Verizon isn't interested in purchasing additional spectrum from the likes of Globalstar, there might be other, smaller companies interested in purchasing spectrum for their own smaller, private network buildouts. After all, some believe the demand for private wireless networking equipment could eventually double the market for public wireless networks.
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