There are two ways to value any asset, including spectrum licences: an analysis of the cash flows derived from the asset using the DCF method; as well as benchmarks from financial transactions for similar assets, e.g., spectrum auctions and M&A.

For us, spectrum auctions provide a useful financial benchmark for valuing similar spectrum licences (i.e., similar geographies and similar spectrum bands) via a £/MHz/Pop metric. We expect a rational value to be placed on a spectrum during the auction process by an acquirer via a DCF analysis, based on the future cash flows that can be expected from the asset.

Our own spectrum valuation methodology involves a DCF valuation which is then sense-checked against comparable spectrum auctions (i.e., similar geographies and similar spectrum bands).