IDT (NYSE:IDT, news, filings) is now looking to sell off its LMDS spectrum, hoping to recoup some value from the asset. The portfolio, held by subsidiary IDT Spectrum, includes some 931 licenses at 38 GHz and 16 licenses in the 28-31 GHz LMDS range. Originally, IDT Spectrum planned to use it to build a backhaul network, but that plan fizzled and they mainly just lease it out where they can. Who might want to buy it from IDT and how much might it sell for?
Various wireless networks might have use for it I suppose, but only if it is really cheap. If it weren't already clear by now, the purchase of this spectrum for hundreds of millions of dollars in the first place was not worth it by any measure. Now, 10 years later, commercial usage remains minimal and the buzz remains in hibernation even as 4G networks are beginning to be built out. Spectrum for the last mile is hard to find, but for backhaul there isn't a shortage and it is easy and cheap just to lease it when you need it most of the time. But perhaps TMobile is the best candidate, as they have yet to commit to 4G plans in the US and aren't as well endowed with any kind of spectrum as the competition.
Perhaps when IDT Spectrum CEO Michael Rapaport says, "We were five or six years too early for the marketplace" he should add 'and probably still are'? Another of the other major holders of LMDS spectrum is XO Holdings (news, filings), which also reigned in its dreams for its usage when it reabsorbed Nextlink over the summer. And Level 3, which holds a bunch of similar spectrum from its acquisition of Telcove, has not found anything useful to do with it yet either.
Then there is ftwr, which also sits on a fair amount of this kind of spectrum and is still making the only major attempt to use it commercially. But FiberTower has slashed its capex pretty heavily over the last year and only in the last 6 months managed to achieve positive gross margins. On the other hand, the company's stock has surged in the past few days without much in the way of an explanation, I wonder if that is related to IDT Spectrum's plans...
If nothing else, perhaps we will learn what price tag the market puts on this kind of spectrum currently, which could affect how we think of the assets belonging to XO, Level 3 are valued. Right now, the value many assign to that spectrum is, shall we say, not material.