Spectrum Auction Bid Strategy and Execution

Coleago’s experience in spectrum auction bid strategy and execution provides clients with granular details and professional analysis on auctions. Coleago regularly advises clients on spectrum valuation yet a spectrum valuation only provides an upper limit on how much to potentially bid.

In order to create value mobile operators must acquire that spectrum as cheaply as possible. This is the role of spectrum auction bid strategy. Auction bid strategy has become increasingly complex as telecoms regulators have adopted different auction formats.

Coleago is experienced in a wide variety of auction formats, including first price sealed bid, second price sealed bid, national and regional simultaneous multi round (SMR) auctions, combinatorial clock auctions (CCA), and multi-region combinatorial auctions.

The increasing complexity of spectrum auctions means formulating a robust bidding strategy is becoming ever more challenging especially because of the interdependencies between different spectrum blocks. Blocks could be complements, weak or strong substitutes and under certain circumstances there is a substantial risk of acquiring stranded spectrum blocks. This is particularly the case where auctions do not allow operators to state minimum acceptable aggregate spectrum limits.

Spectrum Auction Strategy

Coleago combines the application of game theory with simulations in order to develop an optimal bid strategy for a client:

Auction Theory: We apply the principles of economic game theory analysis to identify a dominant bidding strategy. We test the hypothesised dominant strategy in mock auctions and through simulations. The iterative process is workshop and facilitation based, and ensures a robust strategy and a well prepared and trained bid team capable of executing the strategy effectively. These workshops create auction awareness among your management.

Mock Auctions: These are the training ground for staff executing the auction and are required to test systems. In Coleago’s experience the participation in mock auctions is also an “eye opener” for senior management, helping them to understand the risk associated with an auction of either overpaying or not obtaining the desired combination of spectrum blocks.

Auction Simulations: While a mock auction gives some strategic insight, running hundreds or even thousands of computer simulations produces a much better understanding of possible outcomes and thus gives better insight into the outcomes of different bid strategies.

Coleago also develops auction support tools to ensure the strategy can be effectively implemented during the auction. We can provide you with appropriate auction tools to hold mock auctions and simulations. We take this forward to life auction support guided by a detailed spectrum auction playbook and bid tracking tools.

Please call Coleago to learn more about spectrum auction bid strategy or to arrange a spectrum auction workshop.

Spectrum Auction Bid Strategy


Stefan Zehle

T: +44 7974 356 258
E: stefan.zehle@coleago.com

Graham Friend

T: +41 79 855 1354
E: graham.friend@coleago.com