FCC Approves 10 MHz Expansion for 900 MHz Band, Boosting Anterix's Regulatory Position

What happened

The FCC has finalized rules to expand the 900 MHz band to 10 MHz for broadband use, a regulatory milestone that Anterix has long advocated for to enhance its spectrum portfolio. This approval increases the available bandwidth for private LTE networks, potentially making Anterix's nationwide holdings more attractive to utility customers seeking mission-critical connectivity. However, Anterix's core business remains challenged, with only $1.6 million in spectrum revenue last quarter and profitability driven by non-recurring gains rather than sustainable operations. While the ruling reduces regulatory uncertainty and aligns with the company's bullish scenarios, it does not immediately address weak cash flows or the slow conversion of its ~$400 million contracted base. Investors should view this as a positive but incremental step that underscores the need for tangible commercial progress amid liquidity constraints and execution risks.

Implication

Regulatory clarity on 10 MHz broadband in the 900 MHz band may accelerate utility adoption of private LTE, potentially leading to new contract signings and an expanded backlog for Anterix. This development supports the company's long-term strategy by increasing the utility and monetization potential of its spectrum assets, which could lift investor sentiment. However, Anterix's financial performance remains precarious, with core revenue minimal and liquidity thin at ~$39 million, necessitating careful monitoring of contracted proceeds and milestone payments. The approval does not resolve execution hurdles, such as converting its pipeline into signed deals or generating solutions revenue from TowerX/CatalyX, which are critical for sustainable growth. Therefore, while regulatory risk is reduced, the investment case still hinges on proof of commercial traction and avoidance of dilutive financing.

Thesis delta

The FCC approval modestly increases the probability of the Bull scenario by removing a key regulatory overhang and potentially speeding up utility deployments, as outlined in the report. However, the fundamental thesis of waiting for evidence of contract conversions and cash flow sustainability remains unchanged, given ongoing liquidity concerns and weak underlying revenue. This shift is incremental, reinforcing that asset value is supported but execution risk persists as the primary barrier to rating upgrade.