The value of mobile spectrum matters especially for a few firms (Dish Network and Sprint, in particular) that are monetizing, or hoping to monetize, those assets. The specific value of existing spectrum matters less to AT&T, Verizon and T-Mobile US, as it is an asset meant only to support the business model, and not being collateralized (Sprint) or potentially monetized (Dish Network).
Some have estimated the total value of 2.5-GHz spectrum held by Sprint at $115 billion or so. Others might argue that all of Sprint’s spectrum is worth around $60 billion.
It is worth noting both those figures exceed Sprint’s total market valuation of about $28 billion, in the third week of October 2016.
“We estimate that Sprint is valuing principally 2.5 GHz spectrum at $1.85/MHz/POP, which is more than six times the $0.30/MHz/POP it effectively paid for this spectrum when it acquired Clearwire in 2013,” says BTIG equity analyst Walter Piecyk.
The implied spectrum valuation of the deal indicates a material step up in value of spectrum values over the past few years, at least according to Aetha Consulting, the third party appraiser that was used to value the spectrum.
Sprint apparently values 14 percent of its spectrum holdings at $16.4 billion as part of the sale-leaseback of spectrum.
That implies a total valuation of spectrum at about $117 billion, or about four times Sprint’s present market capitalization. Clearly there is a huge variance; some might say a disconnect.
Either Sprint’s spectrum is not worth as much as it claims, or the market is seriously undervaluing Sprint as an asset.
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