Federated Wireless


There is only so much space available to send wireless signals – the so-called spectrum – and this is becoming a pressing issue for the rapidly evolving wireless industry, which is already experiencing increasing levels of data traffic. Hence, the traditional model of licensing large segments of spectrum to individual mobile network operators (carriers) is becoming inefficient and under increasing pressure to evolve.

A new model for spectrum allocation might just be that solution and Federated Wireless, which was founded by Allied Minds in 2012, has a unique first mover advantage. The company has pioneered an innovative spectrum-sharing framework that is in the process of being adopted by the Federal Communications Commission (FCC). We first invested in Federated Wireless in January 2016.

Investment case summary

The company’s proprietary technology centres around its Spectrum Access System (SAS) – a secure cloud-based system which authorises and coordinates the use of spectrum in real-time, boosting the utilisation of available spectrum.

The first spectrum band that is being opened for the company’s SAS technology is the US Citizens Broadband Radio Service (CBRS), which is a 150 MHz band that is currently utilised by the US Navy. In this environment, the SAS will be responsible for granting frequencies to commercial users and protecting the federal incumbent users. This sensitive and technically complex challenge illustrates the significant value that has been built into this innovative business.

Since we first invested, the company has made considerable progress. It completed a $42m funding round in September 2017, attracting new blue-chip shareholders, including Charter Communications and American Tower. Federated Wireless has recently submitted formal application to the FCC to proceed with initial commercial deployment. This is expected to start in the fourth quarter of 2018.

However, the US is not the only country that faces this spectrum challenge – it is an international problem. Therefore, the commercial opportunity ahead of this innovative business is impressive. If things proceed to plan, its management expects revenues of c.$500m in the next four to five years.

Ask a question about our investment in Federated Wireless

Fund exposure
Patient Capital Trust 1.27%

As at 30 November 2018

Aggregated portfolio weight across more than one line of stock.

Geography United States
Industry Technology
Themes Disruptive technology

Source: Woodford


Initial commercial deployment

Federated Wireless, an Allied Minds portfolio company, announced today that it has submitted formal application to the Federal Communications Commission (FCC) to proceed with initial commercial deployment. The application is in partnership with 15 end-users of the company’s spectrum allocation technology, including mobile network operators, cable operators and tower operators. The proposed deployment is across 16,000 sites in 47 American states and we expect Federated Wireless to start deployment in the fourth quarter of 2018. We believe this is a major operational milestone for the business.

Meanwhile, its proprietary ESC (Environmental Sensing Capability) networks are now in deployment phase, with roll out expected to be completed in the first quarter of 2019. These are sensors positioned on the US coasts that detect the US Navy’s use of CBRS. Overall, this is excellent progress made by the company.

10 September 2018
Paul Lamacraft

Successful testing of new technology

Federated Wireless has announced that, in partnership with Ericsson, Verizon and Qualcomm, it has successfully tested 4G technology over CBRS spectrum in Verizon’s live commercial network. This follows Verizon’s announcement in April that it expects commercial deployment of CBRS networks and devices that can access this spectrum in late 2018.

This development represents just one indication of the positive progress that is being made across numerous trials that Federated Wireless is conducting with a number of leading industry players. The large market opportunity presented by the CBRS spectrum can only be exploited by contracting with a SAS provider, such as Federated Wireless. Given that the company is the leading independent provider of such technology, we believe it is uniquely positioned in this fast-evolving market.

16 May 2018
Harry Raikes

WPCT 2017 annual report case study

Beating the spectrum crunch

There is only so much space available to send wireless signals – the so-called spectrum – and this is becoming a burning issue for the rapidly growing wireless industry.

The big carriers all have their own spectrum, but they need more space if they are to reap the benefits of the increasing demand for all things Wi-Fi, from smartphones and tablets to the broader ecosystem of the Internet-of-things.

Federated Wireless, founded by Allied Minds, might just have the solution. It has developed a cloud-based spectrum access system (SAS) that will enable carriers and others in the industry to extend the access of wireless networks by unlocking the value potential of a ‘shared spectrum’.

The company has made significant commercial, operational and technical progress since it was launched in 2012. It is on course to receive full certification from the Federal Communications Commission (FCC), which will enable the company to launch its innovative technology commercially in the second half of 2018. Customer interaction is high with trials underway with major players including Verizon, Ericsson, Qualcomm, Nokia and Samsung. While Charter, the second largest cable company in the US, invested in the company in September 2017.

24 April 2018

Read the full report

Woodford Investment Management Ltd is authorised and regulated by the Financial Conduct Authority (firm reference number 745433). Incorporated in England and Wales, company number 10118169. Registered address 9400 Garsington Road, Oxford OX4 2HN.

Woodford Patient Capital Trust plc is incorporated in England and Wales, company number 09405653. Registered as an investment company under section 833 of the Companies Act 2006. Registered address Beaufort House, 51 New North Road, Exeter, EX4 4EP.

The Woodford Funds (Ireland) ICAV (the “Fund”) has appointed as Swiss Representative Oligo Swiss Fund Services SA, Av. Villamont 17, 1005 Lausanne, Switzerland. The Fund’s Swiss paying agent is Neue Helvetische Bank AG. All fund documentation including, Prospectus, Key Investor Information Documents, Instrument of Incorporation and financial reports may be obtained free of charge from the Swiss Representative in Lausanne. The place of performance and jurisdiction for all shares distributed in or from Switzerland is at the registered office of the Swiss Representative. Fund prices can be found at www.fundinfo.com.

© 2019 Woodford Investment Management Ltd.
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