900 MHz spectrum in hand, Anterix is building an ecosystem to enable digital transformation of utilities in the US
Anterix is around the halfway point of clearing its nationwide 900 MHz spectrum, and its focus on utilities is paying off with four customers in hand and a pipeline of another 60 investor-owned utilities worth around $3 billion. Company CFO Tim Gray, speaking this month at the Morgan Stanley Technology, Media and Telecommunications Conference, broke down how Anterix is looking to open up a niche of the private networks market in the U.S.
Looking at the utilities industry, Gray noted “significant change” related to grid modernization and long-term climate change. To support use cases like fire mitigation, disaster recovery and data management, utilities are coming around to the benefits of private mobile networks. He also called out the opportunity for opex reduction related to sunsetting legacy systems.
“For utilities, command control of their networks…is extremely important,” he said. “They need to be able to have connectivity. There’s a ton of data that is now being used, needs to be measured, and has to flow across these networks.” In response to a question about why private networks vs. public networks, Gray said it boiled down to coverage availability, site hardening, and disaster recovery. If a public network site goes down, carriers prioritize re-connecting people whereas a utility operators very differently, he said.
In terms of publicly-announced customers, Anterix is working with Ameren, Evergy, and San Diego Gas & Electric, and Xcel Energy:
- Ameren provides service in parts of Illinois and Missoui; the deal is worth around $48 million
- Evergy serves parts of Kansas and Missouri; the deal is worth around $30 million
- San Diego Gas & Electric services Orange and San Diego counties; the deal is worth around $50 million
- Xcel Energy provides service in parts of Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas and Wisconsin; that deal is worth about $80 million
“There’s over 60 utilities within the pipeline,” Gray said, equating that to $3 billion in potential contract value. Describing those engagement, he said there have been “fits and starts…but no one has really dropped out of the pipeline.”
Gray acknowledged that traction has been slow, but that Anterix has developed a “playbook…that’s really a set of chapters around different challenges that we’ve seen utilities face as we’ve worked through the contracting process with them.” Those challenges include business case development, use cases and navigating regulatory processes.
“Those challenges we have already anticipated and we can move the ball forward because they’ve got this information,” Gray said. “When you look at it, I think the amount of process that has to take place within a utility…to get a contract done has been significantly more than we anticipated.”
Another intended market accelerant is the Anterix Active Ecosystem program which includes more than 100 vendors engaged in varying degrees of collaboration around utilities-specific solution development and deployment. Nokia, for instance, has a primary supply deal with Anterix and has also developed new devices–a field router and dongle–designed for IoT connectivity in the CBRS and 900 MHz bands.
On the long-term business outlook, Gray noted that spectrum value is “a finite asset so people are willing to pay premiums for it…That all goes into our calculus.” He said Anterix ended the last quarter with no debt and $57 million in cash; another $85 million is expected over the next 13 months. “I feel very good about the strong financial position we’re in.”