Jennifer Fritzsche, Senior Analyst at Wells Fargo Securities, believes while there will be significant interest in a C-band spectrum auction, there are other spectrum bands – namely the 6 GHz band – which seemingly are being somewhat overlooked by investors.
“Simply put,” Fritzsche said, “we believe there is more being done to free up spectrum than may be appreciated. In the analysis to follow we offer a deep dive into the other spectrum avenues which are currently being considered in D.C. Our two main conclusions from this analysis: 1) more needs to be done to free up more mid-band spectrum for 5G, and 2) we believe bands like 6 GHz (which could offer 2x the amount of spectrum as other mid-band alternatives) and C-band could be comparable in absolute dollars,” she said.
According to Fritzsche, wireless spectrum can be broken down into three main buckets: low band, mid-band, and high band. Mid-band is an important hybrid spectrum that couples the benefits of both low (coverage) and high (capacity) spectrum.
“The ‘Race to 5G’ and fears of falling behind China seem to be of utmost importance to this administration,” she said. “Mid-band spectrum availability is key. International countries (especially Japan, South Korea and China) have been MUCH more aggressive in freeing up mid-band spectrum to help support the 5G ecosystem vs. the U.S.”
Beyond the C-band and CBRS mid-band spectrum, she says, the wireless industry has proposed clearing up to 600 MHz of the 6 GHz band for auction. The plans for this spectrum are facing a power struggle between different constituents – namely the WiFi community and the carriers. An NPRM for the plan for this spectrum came out in October 2018. While Wells Fargo expects C-band to be a first priority for the FCC, an Order on the plan for 6 GHz is expected to come in early 2020, according to Fritzsche.
“To put the size of the 6 GHz spectrum opportunity in perspective,” Fritzsche said, “if the wireless industry’s plan is accepted it could free up over 2x the amount of spectrum expected to come from C-band.”
Fritzsche said her team has estimated C-band spectrum could be worth $0.20 – $0.25/MHz/POP (implying) an absolute dollar value of $17.6B – $22B if all the proposed 280 MHz were made available. C-band, they predict, will likely warrant a higher value than 6 GHz on a MHz/POP basis, given the fact the amount of C-band is less than half the amount of proposed 6 GHz spectrum.
“A case could be made that the absolute dollar of the potential proceeds that could come to the FCC & Treasury from a future 6 GHz auction are not that meaningfully different from what could be seen from a C-band,” she said.
Simply put – the 6 GHz band is NOT a fallback option. In the years ahead, Fritzsche and her fellow analysts see BOTH C-band and 6 GHz playing an important role in the evolving 5G spectrum landscape.
December 20, 2019