Anterix lands $80M deal with Xcel Energy for 900 MHz network

Xcel Energy signed a deal worth at least $80 million over 20 years to lease Anterix’s 900 MHz spectrum throughout the company’s service territory.

The agreement provides Xcel Energy dedicated use of the 900 MHz spectrum for 20 years, with two optional 10-year extensions, so it could end up being a 40-year deal.

Xcel plans to use the spectrum to deploy a private LTE network to support its grid modernization initiatives. The company serves 3.7 million electricity customers and 2.1 million natural gas customers.

During a conference call with analysts on Monday, Anterix executives were upbeat about attendance at the recent Utility Broadband Alliance (UBBA) Summit in California, where they witnessed growing participation of C-level leaders and talk of urgency around adopting private broadband networks.

Anterix President and CEO Robert Schwartz said the company’s management believes the Xcel transaction, when combined with the UBBA summit, represents a real inflection point in their mission of positioning Anterix as the de facto provider of private wireless broadband to utilities.

As the largest holder of licensed spectrum in the 900 MHz band in the U.S., Anterix aims to build a “network of networks” for utilities to connect their private LTE networks and share technology and data.

Xcel Energy operates in Minnesota, Colorado, Michigan, New Mexico, North Dakota, South Dakota, Texas and Wisconsin. Within the industry, they’re considered a thought leader, recognized as the first U.S. energy provider to set aggressive clean energy goals across all the ways their customers use energy, said Anterix COO Ryan Gerbrandt.

Xcel joins other utilities, like Southern Company, Ameren, San Diego Gas & Electric and Evergy, in pursuing wireless broadband adoption, but Xcel represents something new and transformational, Gerbrandt said.

“We believe that both their scale in terms of the number of operating companies, customers served, the numbers of states where they have a footprint as well as their industry leadership will have a strong influence on the rest of the sector, particularly their larger peers,” Gerbrandt said, according to a call transcript. “A new industry reference point has been set for utilities of scale that is reflective of the robust evaluation and diligence process that this large utility went through.”

The company anticipates receiving about 80% of the proceeds from the contract by the second quarter of 2024, with the contract fully paid by mid-2028 based on the spectrum delivery schedule.  

As part of their agreement, Xcel Energy will participate in an ongoing collaboration with Anterix that includes joining the Utility Strategic Advisory Board of the Anterix platform.

Formerly pdvWireless, Anterix scored its first major 900 MHz utility partner lease in 2020 with Ameren, a utility serving customers in Missouri and Illinois. That was a 30-year deal.

Anterix originally was founded by the co-founders of Nextel Communications, Brian McAuley and Morgan O’Brien. O’Brien currently serves as executive chairman of the board.