Building Shareholder Value


President & CEO David Jonas rings the Closing Bell at the conclusion of Straight Path Communication’s first day of trading on the NYSE MKT. (Symbol: STRP)

SPCI seeks to create shareholder value from its two classes of communications assets: extensive holdings of 28 and 39 GHz fixed and mobile wireless spectrum licenses held in its Straight Path Spectrum, Inc. (SPS) subsidiary; and two patent portfolios held in its Straight Path IP Group, Inc. (SPIPG) subsidiary.

For additional information, we encourage you to view our SEC Filings.


Conference Calls – Audio

Conference Calls – Transcripts

Investor Presentations

Q1: Why do we need 5G? Wouldn’t LTE work perfectly well with the existing spectrum inventory?

A1: This is like saying 4G is unnecessary due to the existence of 3G, which has not been the conclusion of leaders of the industry and regulators the world over, not just of Straight Path.

The reason is simple: mobile data traffic is growing at a rapidly accelerating rate.

Cisco anticipates that some 11.5 billion mobile-connected devices will be on-line globally by 2019. Furthermore, Cisco anticipates that smartphones will represent three-quarters of mobile data traffic by 2019, and three-quarters of that mobile traffic will be video driven. That means more capacity will be required.

The sheer number of mobile devices, and the resulting traffic they demand, require new solutions and more spectrum.

That is why OEMs (original equipment manufacturers) and MNOs (mobile network operators) are working together to set the standards for 5G. This is also why the ITU, the United Nations’ specialized agency for information and communication technologies, embarked on a program in 2012 to develop the International Mobile Telecommunication (IMT) system for 2020 and beyond by “setting the stage for ‘5G’ research activities that are emerging around the world.”

Q2: Does 5G really need mmWaves?

A2: 5G does need mmWave. To say the contrary is to contradict the industry consensus.

For instance, at the September 3GPP RAN workshop on 5G the joint proposal from AT&T, Intel, Qualcomm, Samsung, Sprint, Verizon, and others supported phase one of the standards to focus on bands at least up 40 GHz.

In its ex partes filing as recently as October 14, 2015 – CTIA – The Wireless Association—which represents the interests of, among others, AT&T, Sprint, T-Mobile, and Verizon – stated that “spectrum above 24 GHz will help complement existing and future mobile broadband services and increase the capacity and capabilities of wireless providers to provide advanced services to the public.”

CTIA went further and said that “spectrum bands above 24 GHz may yield extensive amounts of contiguous spectrum blocks (gigahertz rather than megahertz available in lower spectrum bands), potentially allowing the provision of extensive throughput and capacity improvements as compared to other spectrum bands available for mobile services.”

In resonance with Straight Path’s thinking, CTIA continued: “The 5G standards will require increased capacity and data throughput to allow new services to be delivered to consumers, including ultra HD video streaming. These throughput and capacity increases will require large block sizes and cutting-edge antenna technologies.”

Q3: With so many other high bandwidth frequencies, why is Straight Path’s spectrum any more valuable than other bands?

A3: The FCC is well aware of the other potential frequencies but has focused its NPRM [pages 23-30] upon only four bands. Of those four bands, only two are being proposed to be exclusively licensed. Those two bands are 39 GHz and 28 GHz.

To quote from CTIA’s recent submission again, “CTIA reiterated its support for an exclusive use licensing framework as much as practicable. Creating an environment with certainty and predictability through exclusive-use licensing is critical to promoting investment and fostering innovation in the spectrum above 24 GHz.”

Operators have a preference for exclusive licenses. From the two bands being proposed for exclusive licenses we own over 50% of the active spectrum and about 35% of the total, including whitespaces.

What’s more, the power limits for unlicensed spectrum governed by part 15 – as is being proposed for 54 to 71 GHz [see paragraph 58] – is substantially more restrictive than the power limits proposed for 39 GHz and 28 GHz. Also important to note is that the componentry for bands above 57 GHz hasn’t yet achieved the level of power and efficiency required for wide area mobile broadband technology.

Regarding the myth that tens of gigahertz of spectrum will become available as a result of WRC (World Radiocommunication Conference), Chairman Wheeler has explicitly stated, “Studying all of the spectrum above 6 GHz would be unfocused and would be resource-intensive while identifying too few bands for study risks the possibility that none becomes viable. Accordingly, we need to identify enough bands likely to yield a successful outcome.”

The expectation is not to open all proposed bands for mobile services, but rather to have a wide enough variety to allow for overlap or global harmonization.

Q4: What is Straight Path’s outlook on the FCC’s objective of enabling large blocks of spectrum?

A4: Straight Path has played a critical role in framing the conversation around the FCC’s stated objective of enabling large contiguous blocks of spectrum. We believe that flexible use rights, rather than overlay rights, will give 39 GHz licensees, including Straight Path, the opportunity to engage in mobile operations provided any technical issues are resolved. There is strong industry support for flexible use rights for incumbents [see paragraph 96 with footnote 217], which we believe is a common sense solution that benefits not only incumbents but also the FCC.

Our success in the NOI proceeding that led to the substance of the NPRM exhibits the outsized impact that we are having in the regulatory framework. Similarly the joint proposal supporting phase 1 of the 3GPP 5G standards to focus on bands at least up 40 GHz shows that our advocacy is being felt by industry leaders. Finally, our technology development positions us to engage the industry as both a partner and a resource.

Q5: What is the timeline for 5G deployment?

A5: We believe the industry can begin rolling out 5G in mmWaves by 2020. 5G has always been presented as part of our long-term strategy. We continue to take the appropriate steps, through both regulatory and industry channels – and the development of new technologies – to ensure that when the market is ready, there will be few hurdles to deploying solutions in our spectrum bands.

Q6: As 5G, the most income-producing use for our spectrum, is years away, will Straight Path have enough cash to survive until then?

A6: We have sufficient capital to meet our needs given our very lean structure. We had over $18 million in cash and cash equivalents at the close of our most recent quarterly reporting. That number has actually gone up since our spin-off in 2013.

Our revenue on the spectrum side is growing as we introduce new radio technology to the U.S. market, and our IP division is expected to deliver additional meaningful revenue if the result of the appeal [more info here] goes in our favor, as expected.

Q7: Doesn’t mmWave have a fundamental problem serving indoor locations from outdoor cell sites?

A7: Mobile operators have historically relied on outside-in deployment for indoor coverage. However, this approach has inherent deficiency even at traditional cellular frequencies. As indoor broadband demand increases, mobile operators have responded by adding more indoor base stations. In addition, mobile operators have also added indoor Wi-Fi access points. These deployments will continue to persist and expand their indoor presence in a 5G network using mmWaves.

We believe the bulk of the value of mobile broadband lies in its ability to provide broadband connectivity for users while on the move – when they don’t have an alternative to access. This is where mmWave 5G truly differentiates itself, enabling wide area Gbps mobility to the masses at a price people can afford – a unique value proposition that can take the mobile broadband experience to the next level.

However, we do expect mmWave 5G systems to achieve meaningful indoor coverage with cell density on par with 4G systems. The penetration loss of traditional cellular frequencies and mmWave frequencies depends on the building structure, material, and the frequency.

For example, the penetration loss through concrete walls is significant for all frequencies, including traditional cellular frequencies, while the penetration loss through clean glass is only a few dBs even for mmWave frequencies. Combined with the ability to find the optimal path to transmit and receive, it’s possible for outdoor mmWave 5G base stations to reach deep inside buildings.

For instance, Samsung demonstrated that at 28 GHz “surprisingly amicable indoor coverage results were obtained with only the totally obstructed, farthest side of the building resulting in lost connections.”

Note that this result was obtained with a single outdoor base station 150 meters away from the mobile station inside a sizeable office building (76 meters long and 61 meters wide with heavily tinted glass). Besides, until an mmWave 5G network is completely deployed (e.g., during the initial rollout), operators can always fall back to the previous generations of networks for coverage and gradually grow the footprint of 5G.

Q8: Is it true that mmWave 5G requires much higher cell density than 4G?

A8: No. The statement that mmWave 5G requires much higher cell density – as high as 6000x denser than 4G systems – is incorrect. A recent report by a short-seller attempted to support this incorrect statement by taking a number that should be applied to an urban area like Manhattan and extrapolating it to the whole 9.8 million square kilometers of the U.S.

The reality is that population density and cell site density vary drastically across geographic areas. New York City has a population density of more than 10,000 people per square kilometer while almost half of the U.S. land area has less than 10 people per square kilometer.

Furthermore, the study shown in Nokia’s comment to the FCC NOI – where the 189 radio nodes per square kilometer cell density is simulated – uses 72 GHz, not 39 GHz or 28 GHz. It appears that the short-seller’s report selectively chose data and then misapplied it.

Q9: What’s unique about Straight Path’s spectrum?

A9: One of the key reasons why 39 GHz and 28 GHz are so crucial to mmWave 5G is that the circuit devices in these bands have much better performance in terms of output power, efficiency, and noise figure than their counterparts in 60 GHz and E-band (71 – 76 GHz and 81 – 86 GHz). This allows mmWave 5G cells to achieve the 100 meter – 1 kilometer range for wide area Gbps mobility. In fact, part of the high cell density requirement in Nokia’s 72 GHz study can be attributed to the limited power and range of the radio nodes assumed in the simulation.

In addition, there is a fundamental difference between licensed and unlicensed spectrum [see section F.3, beginning paragraph 271], and thus the supposition that the unlicensed spectrum in 57 – 64 GHz and 64 – 71 GHz are of similar value to mobile broadband as the 39 GHz and 28 GHz bands is nonsensical.

The short-seller’s report also failed to recognize the regulatory challenges in enabling mobile services in these bands. The report incorrectly asserts that gigahertz after gigahertz of mmWave spectrum can be readily made available for exclusive licensed mobile use, in the near future.

Q10: What’s your view of the broader societal impact of 5G adoption?

A10: The mobile communications industry, through its innovations in the past three decades, has created enormous value for society, employed millions of people, and made our lives better.

Straight Path may be in the right place at the right time, and stands to gain if mmWave 5G succeeds in 39 GHz and/or 28 GHz. We believe what we are doing is not only important to Straight Path, but also crucial to the deployment of 5G, and is a future key component of the mobile communications industry.

As we stated in our 5G vision white paper, we believe 5G is a critical piece in forming the broadband infrastructure for society. We are proud of our work in pushing the technology envelope and making spectrum available for 5G and we won’t stop until we succeed.