Spectrum Valuation ($SATS) - Part 8
Part 8 of a multi-part series on the economics of spectrum and EchoStar’s spectrum portfolio
Part 1, 2, 3, 4, 5, 6 and 7 are here.
Today we will focus on EchoStar’s 3.45GHz block, a big dessert plate that you can share with the whole table. You can skip it if you want, but it’s a real tasty $8B dessert that we might hear more about in the near future as EchoStar tries to improve its liquidity.
3.45GHz Block
100 MHz
3450-3550 MHz Bands
History
In late 2021, the FCC held Auction 110, offering 100MHz of mid-band spectrum across the 3.45GHz range in ten 10MHz blocks per Partial Economic Area (PEA). It drew $22.5B in gross bids. DISH, bidding under Weminuche LLC, secured 1,232 licenses, totaling roughly 30% of MHz-POPs, for approximately $7.3B ($0.77/MHz-POP on 9.5B MHz-POP). This made DISH the second largest bidder after AT&T, which won 1,624 licenses for $9.1B, while T‑Mobile and U.S. Cellular captured smaller shares valued at $2.9B and $580M, respectively. Verizon didn’t participate after their large haul in the C-band auction earlier.
The 3.45 GHz spectrum fetched a much lower price than the C-Band auction that occurred earlier ($1.10 per MHz-POP overall, but you need to pay attention to the details in the comparable transactions section of this write-up). Several structural and strategic factors explain this discount. First, the DoD coordination requirements weighed heavily on valuations. Portions of the 3.45 GHz band, particularly the lower 40 MHz, require licensees to coordinate with the DoD before deploying service in Cooperative Planning Areas (CPAs) and Periodic Use Areas (PUAs). These areas, often near military installations, carry uncertainty around interference risk, temporary access restrictions, and power limitations. Approximately 41% of MHz-POP in this auction were “encumbered” in this fashion. Second, the 3.45GHz block is adjacent to the CBRS band (3.55–3.7 GHz), which has strict power limits and a shared-access model (see next section for CBRS limitations), raising concerns about interference.
The 3.45 GHz auction occurred just a year after the blockbuster C-band auction. Having just deployed massive amounts of capital, Verizon and AT&T approached Auction 110 more cautiously. Additionally, T-Mobile, already sitting on a deep trove of 2.5 GHz mid-band spectrum via its Sprint acquisition, participated minimally, limiting competitive bidding pressure.
DISH’s 3.45 GHz spectrum is intended for use in its Boost Mobile 5G network, but so far hasn’t seen active deployment.
DISH financed the 3.45GHz spectrum purchase by raising secured debt at its DDBS subsidiary (Pay-TV sub). In return, DDBS received an intercompany loan receivable for $7.5B, secured by the purchased 3.45GHz spectrum asset. The DDBS unsecured bondholders had first dibs on this intercompany loan because it was primed by the new secured debt. In January 2024, the company transferred $4.7B of this intercompany loan out of DDBS bondholders’ collateral pool (along with other assets), instigating a lawsuit from DDBS bondholders. You can read more about EchoStar/DISH’s capital structure and their relationship with DDBS here.
Given DISH’s financial difficulties, cash burn and large bond maturities due in 2026, it is speculated that DISH will sell this 3.45GHz spectrum block to raise cash, which would require DISH to settle their dispute with DDBS bondholders. I estimate a cost for this settlement at approximately $1B, which is the difference in DDBS bonds outstanding and the price that DTV is likely willing to pay for DDBS.
In 1Q 2025, DISH swapped 1.5B MHz-POP of 3.45GHz collateral with other spectrum assets of equal value (700MHz, CBRS, etc.), thereby freeing them to be sold to raise cash, potentially in the $1-$1.5B range.
Compliance of Build-out Requirements
The FCC’s build-out requirements mandate that DISH provides 5G service to at least 45% of the population in each Partial Economic Area (PEA) within four years of license grant (by May 2026), and 80% within eight years (by May 2030). These obligations are among the most stringent for mid-band spectrum, designed to ensure rapid deployment and prevent spectrum warehousing. Non-compliance of interim buildout requirements will accelerate the final deadline by 1 year to May 2029.
Spectrum Characteristics
The 3.45GHz band is a mid-band spectrum allocation offering a strong balance between capacity and coverage. It sits adjacent to the CBRS band (3550–3700 MHz) and below the C-band (3700–3980 MHz).
Technically, the 3.45 GHz band delivers higher throughput and lower latency than low-band spectrum (e.g., 600 MHz), but with shorter propagation and weaker in-building penetration. It performs best with small cells or dense macro cell deployment in urban or suburban areas. Unlike CBRS, the 3.45 GHz band is non-shared and doesn’t require SAS coordination, allowing for more predictable performance. Power levels are similar to C-band. Initial coordination is required in certain "cooperative planning areas" to protect federal radar systems, but these limitations are expected to phase out over time.
Recent Valuation Comparables (All Mid-Band Transactions)
See Part 4 for a summary of the transactions in the mid-band segment.
Potential Bidders
AT&T was the largest winner in the initial auction and already holds substantial nationwide 3.45GHz spectrum. Acquiring DISH’s licenses would help AT&T deepen its mid-band 5G capacity, reduce carrier aggregation complexity, and drive down deployment costs by consolidating adjacent blocks. Since 3.45GHz is part of Band n77 (which includes both C-band and 3.45GHz), AT&T could seamlessly integrate additional capacity into its existing infrastructure.
T-Mobile participated in Auction 110 but acquired only a modest footprint. While T-Mobile already has significant mid-band spectrum via 2.5GHz, acquiring DISH’s 3.45GHz licenses could further solidify its dominance in metro areas or fill gaps in specific PEAs. That said, T-Mobile has less need than AT&T for this band and may view it more as a strategic blocking move or a low-cost spectrum hedge rather than a top priority. Additionally, T-Mobile’s integration costs for 3.45GHz would be higher due to its heavier focus on 2.5GHz and less reliance on C-band infrastructure.
Charter and Comcast might not be the best buyers of this 3.45GHz block - the device ecosystem alignment needed for 3.45GHz would be a major barrier without a clear nationwide plan. This makes them more likely buyers in a bundled deal with other spectrum bands (e.g., AWS-3/4), not 3.45GHz on its own.
My Valuation
I think the bidders of 3.45GHz got a great price at the auction in 2022. I think the range of reasonable valuation for DISH’s 3.45GHz is $0.75-$1.00 per MHz-POP. I assigned the bottom of the range for my valuation due to DISH’s immediate cash needs. The total market value of this block is estimated at $8B, just slightly above the initial purchase price of $7.3B.
My Key Takeaways
The key takeaways for the 3.45GHz block are:
It is not used in DISH’s 5G network currently.
Can be used to raise cash as long as intercompany encumbrance is resolved with DDBS bondholders, which will cost EchoStar $1B in my estimate.
The block was purchased at a very reasonable valuation. This will facilitate a quicker exit for EchoStar. DISH is also not going to meet the interim buildout requirements, so an exit from this block makes sense, despite the less than ideal price DISH might receive
The reasonable valuation was due to federal and DoD encumbrance, which will slowly go away, making this prime spectrum for 5G at a very good price for the potential buyer of this block