Wireless Spectrum Valuation

Wireless spectrum is a critical asset to many companies in the communications sector. Understanding the intricacies of spectrum value is critical to understanding the value and strategic options of many of the players in the communications sector – from investors to private wireless operators to federal spectrum users. Wireless Frequency valuation projects are often performed in conjunction with our litigation support/expert witness services.

Experienced Wireless Spectrum Valuation Experts

Summit Ridge Group has particular expertise in valuing complex wireless spectrum licenses.  We have hands-on experience valuing spectrum licenses and providing related competitive and regulatory analysis. We have advised carriers, investors and government agencies. Our experience ranges from High Frequency (which at 3-30 MHz, is actually at the low end of the usable radio frequency spectrum) to Ka-band satellite  (18-20 GHz and 28-30 GHz) as well as numerous mobile wireless licenses around the world in major spectrum bands. Our clients include investors, wireless and satellite operators, parties in litigation, and federal government agencies. In addition to our practical experience, we have authored publications on the related to wireless spectrum valuation in major academic journals and are regularly invited to present on the topic at leading industry conferences. We keep current on major regulatory developments at the FCC and other regulatory agencies globally.

Wireless Spectrum Valuation Process

Wireless spectrum is one of the few types of intangible assets that can be valued based on market comparables. Mobile broadband licenses, in particular, have a relatively well-developed market with many comparable transactions. In some cases, however, comparable transactions are not available and appraisers must look to alternative valuation methodologies including:

Income methods

  • Discounted cash flow analysis based on the expected profitability of the underlying business
  • Theoretical royalty imputation
  • Excess earnings methods

Replacement methods

  • Optimal deprivation analysis
  • Other substitution calculations

Econometric modeling (statistical relationships between a number of explanatory variables)

Theoretically, each method should yield the same result. But due to incomplete information, alternatives to market comparables usually require major, hard to support assumptions. This leaves them, in most cases, materially inferior to an analysis of market comparables (adjusted for differences between the comparables and the subject asset – a complex process itself).

For more information about our wireless spectrum valuation process, see our wireless spectrum valuation framework presentation.