Mobile Satellite Spectrum Valuations Will Not Match Terrestrial Benchmarks, New Report Claims

Mobile Satellite Spectrum Valuations Will Not Match Terrestrial Benchmarks, New Report Claims

MENLO PARK, Calif., Oct. 30 /PRNewswire/ -- A new report from Telecom, Media and Finance Associates, Inc. (TMF Associates), "ATC, Satellite Radio and Other Hybrid MSS Networks: Business Cases and Spectrum Valuations" concludes that the value of MSS spectrum is likely to be considerably lower than benchmarks established in the FCC's AWS and upcoming 700MHz auctions. The report analyzes business cases for satellite radio, mobile TV and interactive ATC services, and concludes that the best case valuation for MSS spectrum in the US, when used in interactive applications, is between $0.23 and $0.35 per MHzPOP. This compares to prices of up to $0.73 per MHzPOP in the 2006 AWS auctions and over $1 per MHzPOP in the recently announced 700MHz AT&T/Aloha transaction.

Tim Farrar, author of the report, commented, "In 2008 we will see the first new MSS systems for nearly a decade launched into orbit. These satellites, from ICO and TerreStar, have been built on the premise that use of terrestrial repeaters, known as Ancillary Terrestrial Components or ATC, will allow them to avoid the disastrous fate of Iridium and Globalstar in the late 1990s. A key reason why new systems have been able to raise funding is that potential use of their spectrum in terrestrial networks has enabled comparisons with multi-billion dollar terrestrial spectrum valuations. The two systems are taking different approaches to the market, with ICO focusing on broadcast mobile video, and TerreStar planning a two-way cellular-like network. Our analysis concludes that two-way services are likely to generate much greater returns, supporting a higher spectrum valuation. However, in order to achieve sufficient scale, network buildout will require $2B+ of investment. This means that TerreStar will need to find deep-pocketed partners in the very near future."

The report provides operators, investors and analysts with a detailed evaluation of different potential uses of MSS spectrum. It discusses the regulatory environment and analyzes the technical limitations of mobile satellite services. The report develops business cases for all of the leading operators, including XM/Sirius, TU Media, MSV, TerreStar, ICO, CMBSat and Solaris (an SES-Eutelsat joint venture), and values the spectrum and other assets of each business. In addition to terrestrial uses of the spectrum, it forecasts the contribution that satellite services, such as use of MSS for backup by first responders and emergency workers, will make to overall revenue growth. Conclusions are drawn about the value generated by each of the systems and the implications for development of each application.

For more information about the report, see http://www.tmfassociates.com/ATC

TMF Associates, headquartered in Menlo Park, California, is a leading consulting and research firm providing business and technical analysis in satellite, wireless and broadband communications. The firm specializes in Mobile Satellite Services, including Ancillary Terrestrial Component (ATC) technology, and works with operators, investors and equipment manufacturers to

analyze complex market issues. For additional information, please visit http://www.tmfassociates.com/.

Available Topic Expert(s): For information on the listed expert(s), click appropriate link. Tim Farrar http://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=60577

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Source: Telecom, Media and Finance Associates, Inc.

CONTACT: Tim Farrar, President of Telecom, Media and Finance Associates,
Inc., +1-650-839-0376, tim.farrar@tmfassociates.com

Web site: http://www.tmfassociates.com/

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