TerreStar Corporation (fka TSTRQ)

[yesmistermorningstar]

The most accepted unit used to measure the value of spectrum licenses is a price per MHz-POP. It is calculated by dividing the price paid for the license by the quantity of the population covered by the license and the amount of spectrum, measured in MHz. (i.e. Price/(MHz*Population)). This measure is popular as it takes into account both the amount of bandwidth the license
contains as well as the number of people who would potentially use it. Nevertheless, this measure is somewhat simplistic as it does not take into February 2008 16 account population density, propagation characteristics or licensing rules. With that said, some general rules do apply. For example, licenses that cover densely populated areas are more valuable due to the cost savings extra spectrum provides in crowded markets. This is because the capital expenditures for network deployment in crowded markets are driven by the need to add extra towers to avoid network overloading in particular cells (which can only handle a
fixed amount of traffic with an allocation of spectrum). The availability of additional spectrum in such an instance can eliminate the need to add towers,and thus reduce capital expense. For an extreme example, Delaware has a slightly lower population than Montana, but a spectrum license covering Delaware would cost significantly more due to the much smaller size of the state.