The Case for Strategic Spectrum Renewal
As spectrum licences approach their expiry date, a strategic approach to spectrum renewal is crucial. Traditional presumption of renewal in favour of incumbents may no longer serve the industry’s needs. Instead, a more strategic approach to renewal can optimise spectrum assignments and improve spectral efficiency by up to 40%.
The mobile industry’s technological landscape has changed significantly in the past two decades, with revenue growth stagnating, consolidation leading to fewer operators and the rise of 4G and 5G technologies. Current spectrum assignments often result in fragmented, inefficient holdings, reflecting the outdated needs of legacy technologies like 2G and 3G. With the growing substitutability of certain bands, such as 1800 MHz and 2100 MHz, operators can now compete effectively without holding both bands.
This trend calls for a shift from automatic renewal to a more proactive approach, where operators and regulators collaborate to optimise band plans in order to reduce fragmentation and increase the availability of large, contiguous bandwidths. A strategic renewal process could significantly improve spectral efficiency without requiring additional spectrum release.
Operators should not wait for formal renewal processes but should engage proactively with regulators and other operators to identify trades, swaps and potentially M&A opportunities to optimise spectrum usage across the market through the creation of win-win outcomes.
Additionally, the promotion of spectrum sharing and the introduction of multi operator core networks (MOCN) for 5G offer further opportunities for efficiency gains. A comprehensive review of existing spectrum holdings and regulatory conditions, along with long-term traffic growth forecasts, can help identify and address inefficiencies.
By undertaking a strategic spectrum review, mobile operators can realise efficiency gains, optimise existing spectrum portfolios, and potentially reduce their dependence on, possibly expensive, future spectrum awards. Coleago Consulting’s recent review across multiple markets revealed efficiency gains of up to 40% in some markets, highlighting the importance of an industry-wide, strategic approach to spectrum management.
In summary, optimising existing spectrum holdings before acquiring new spectrum is essential for minimising future spectrum investment. Operators can benefit from a strategic spectrum review, allowing them to deliver efficiency improvements while aligning with regulatory best practices.
About Coleago Consulting Ltd
Coleago Consulting specialises in telecoms strategy, offering expertise in spectrum management, regulation, and network strategy. For more information or to discuss the benefits of a strategic spectrum review, contact Graham Friend at [email protected].
Other insights
Best Practice Spectrum Management
The principles of best practice spectrum management are well established and their implementation can enhance the socio-economic value of spectrum and how much operators are prepared to pay to acquire new spectrum. Whilst most regulators in developed markets have adopted best practice, the same cannot be said for developing markets. Coleago recently studied the regulatory environments in 16 African markets and recorded the extent to which best practice had been adopted.
Learning From Best Practice Spectrum Management in Botswana
The Botswana Communications Regulatory Authority conducted a review of its spectrum management strategy to align with international best practice. The Authority was advised by Coleago and in this paper, Project Director Graham Friend highlights the lessons to be learned for other regulators in developing markets.
The End of Telecoms History? – Not Quite!
At the European 5G conference, Stefan Zehle highlighted that differences in mobile data usage across countries result from variations in price and network availability. While European policymakers celebrate 89% 5G coverage, gaps in both outdoor and indoor connectivity limit usage. William Webb’s prediction that data traffic will plateau at 20 GB per user per month by 2027 seems unlikely, given that top users already exceed 100 GB. To fully realise 5G’s potential, policymakers must address these coverage issues in a cost-effective manner.
Insights from a Strategic Spectrum Review
The mobile industry has accumulated a fragmented spectrum portfolio, consisting of various frequency bands that are sub-optimally allocated for modern technologies like 4G and 5G. As operators transition from legacy technologies such as 2G and 3G to newer, bandwidth-intensive solutions, the need for contiguous spectrum blocks has become critical.
The End of Telecoms History? Not Really
In his book The End of Telecoms History, William Webb uses extrapolation of mobile data usage growth curves to claim that mobile data user requirements are nearly met
and that we have all we need
. He predicts mobile data usage to plateau at around 15-20 Gbytes/user/month
. Webb claims that no further investment in 5G capacity is needed and that the only remaining problem is ubiquity, notably in-building coverage. This article provides evidence that, while the author makes some good points, his analysis with regards to mobile data usage is flawed and hence the conclusions he draws are quite wrong.
Mobile Network, Spectrum, and Public Policy Outlook to 2030
The report is based on the Coleago report ‘Mobile Services, Spectrum and Network Evolution to 2025’ (March 2021), updated to align with the latest developments as well as with market projections to 2030. It provides a review for telecoms regulators and mobile operators of key global developments, insights, trends, and best international practices, to inform future spectrum policy and management as well as operator strategies.
