Press release
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 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 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 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.

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