Anterix Sees Scarce 900 MHz Spectrum Driving Utility Deals and Satellite Upside

Key Points

• Scarce 900 MHz spectrum is strengthening Anterix’s negotiating position. The company has expanded its licensed capacity to 10 MHz and is renegotiating pricing with roughly a dozen utility prospects, while management estimates its spectrum could be worth substantially more than its current implied valuation.
• Anterix is exploring satellite-direct-to-device opportunities, including successful early tests with Lynk and potential applications ranging from utility coverage to a broader spectrum transaction with a satellite provider.
• Utility demand remains centered on private broadband networks for grid modernization, including outage management, predictive maintenance, worker connectivity and falling-conductor protection; Anterix ended the quarter with no debt and $116 million in cash.

Anterix NASDAQ: ATEX executives said the company sees growing demand and limited supply for its low-band 900 MHz spectrum, citing recent spectrum transactions and potential satellite-direct-to-device applications as factors that could expand monetization options beyond its traditional utility customer base.

During an Oppenheimer fireside chat hosted by communications analyst Tim Moran, Chief Financial Officer Elena Marquez said Anterix completed a regulatory effort in February that expanded its band capacity from 6 MHz to 10 MHz. The company’s spectrum is licensed and operates in the 900 MHz band, which Marquez characterized as a scarce low-band asset.

“Being a spectrum holder in the current environment is just absolutely terrific,” Marquez said, pointing to industry activity including SpaceX’s acquisition of EchoStar spectrum and Rocket Lab’s transaction involving Iridium. She said such activity has validated demand for spectrum while available supply remains fixed.

Valuation and Utility Negotiations

Marquez said Anterix has monetized spectrum on a geography-by-geography basis for utilities and has approximately 85% of its nationwide MHz-pops remaining after transactions with 11 utilities. She said those prior utility agreements account for about 3 billion MHz-pops.

Using a market capitalization of approximately $1.8 billion and 3 billion MHz-pops, Marquez estimated that Anterix was trading at roughly $0.60 per MHz-pop. She compared that figure with the approximately $2.50 nationwide average from Auction 113, which she said would imply a gross asset value of about $7.5 billion for Anterix’s spectrum.

Marquez noted that the company’s spectrum differs from AWS-3 auction spectrum because Anterix holds low-band frequencies. Low-band spectrum has stronger propagation and building-penetration characteristics than mid-band frequencies, according to the discussion.

The company is currently engaged in active discussions with about a dozen utility opportunities, Marquez said. Many of those discussions involve pricing renegotiations, reflecting recent spectrum transaction comparisons and what the company views as continued appreciation in spectrum values.

“The majority of those conversations are around renegotiating pricing given the current environment,” Marquez said. “The demand for spectrum, but also the most recent comps that support the value of it and the continued appreciation of the spectrum.”

Marquez added that Anterix had no debt and held $116 million in cash at the end of the quarter, a position she said gives the company flexibility to be patient in evaluating potential deals.

Satellite Optionality

Chief Regulatory and Communications Officer Chris Guttman-McCabe said a recent SpaceX filing with the Federal Communications Commission was significant because it raised the possibility of using satellite coverage to satisfy certain spectrum build-out requirements.

SpaceX referenced three spectrum bands in its filing, including Anterix’s band, according to Guttman-McCabe. He said applying the concept to Anterix’s spectrum would likely require a waiver after a prospective buyer acquired the asset, rather than a broad rulemaking applicable immediately to the company.

“The theme for our earnings call was optionality,” Guttman-McCabe said. “The fact of the matter is we have optionality along a wide range of themes.”

Anterix has also filed for an experimental license with direct-to-device satellite company Lynk. Guttman-McCabe said the companies conducted initial tests using Lynk’s operational satellite constellation and Anterix spectrum. The tests included data connectivity, text messaging and web browsing across devices including a router, phone and TOUGHBOOK computer during satellite passovers.

He described the results as successful but said the work remains in early stages. Potential paths could include Anterix developing a satellite-related offering, utility customers using satellite connectivity over parts of their licensed areas, or a broader spectrum transaction with a satellite provider.

Low-Band Spectrum Scarcity

Guttman-McCabe said the availability of sub-1 GHz spectrum is limited. He identified Anterix’s 900 MHz holdings and spectrum around 800 MHz as the principal current opportunities, while noting that small portions of 600 MHz spectrum may exist but are being acquired by carriers.

He said a potential future repurposing of broadcast television spectrum could occur but would require a lengthy process involving spectrum aggregation and potentially legislation or an auction. He did not view that as a near-term probability.

Marquez said the limited licensed supply includes Anterix’s 10 MHz and 14 MHz at 800 MHz held by Grain Management. She contrasted that with the 40 MHz to 60 MHz of low-band spectrum that carriers may hold for terrestrial networks.

Utility Network Applications

Executives also highlighted utility use cases for private broadband networks operating on Anterix spectrum. Guttman-McCabe said several utility customers have fully deployed networks, while others are in various stages of deployment and are loading applications onto their systems.

Examples include predictive maintenance, outage management, field-worker connectivity and falling-conductor protection. The latter application, developed with Schweitzer Engineering Laboratories, is designed to de-energize a broken power line before it hits the ground, Guttman-McCabe said.

He said the technology has been tested in both lab and field environments and requires high-capacity, low-latency coverage. Other applications are intended to isolate outages before they expand and to improve worker access to schematics and operational information in the field.

Guttman-McCabe said utilities increasingly view communications as a “third grid” alongside transmission and distribution, as they address weather risks, cybersecurity concerns, growing electricity demand and more distributed generation sources.

About Anterix (NASDAQ:ATEX)

Anterix, Inc is a specialized telecommunications company focused on delivering private broadband networks for utilities and other critical infrastructure industries. The company owns and operates dedicated 900 MHz spectrum that enables reliable, secure and high-performance wireless communications to support grid modernization, smart metering, distribution automation and other mission-critical applications. By leveraging this spectrum, Anterix helps electric, water and gas utilities deploy advanced communications capabilities to enhance operational efficiency and resiliency.

At the core of Anterix’s offering is its licensed 900 MHz spectrum, which provides superior propagation characteristics compared with unlicensed options and allows for cost-effective coverage over expansive service territories.

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