There is an older adage that spectrum always has value, adhered to by executives such as Charlie Ergen, Dish Network CEO. There might also be a new developing line of thinking, namely that mid-band spectrum licenses are potential alternative assets akin to roads, seaports, airports or real estate.
Which is to say that, as part of a broader portfolio, spectrum licenses might produce a steady income stream, with competitive moats, even if equity growth is limited.
Many T-Mobile 2.5-GHz spectrum licenses, for example, are leased from educational institutions and other investors. T-Mobile would ideally prefer to acquire such licenses and the Federal Communications Commission now allows the license holders to sell them.
It appears T-Mobile has been making purchase offers below what others believe the market value actually represents.
And though its early 5G strategy is built on 2.5-GHz spectrum, T-Mobile appears to be seeking more access to such licenses expected as part of FCC Auction 108.
The auction for mid-band spectrum in the 2.5-GHz band as part of Auction 108 has no set date, yet. Although the intended purpose of the auction is to free up more mid-band spectrum for 5G, the auction also allows institutional investors and private equity to acquire licenses as alternative investments.
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