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Monday, June 27, 2022

Telecoms Spectrum License Pricing

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How do you put a price on a telecoms spectrum license? Chinese operators have picked them up for free — part of Beijing’s attempt to have a national rollout of 5G. Yet in parts of Europe recent auctions have been so expensive that at least one company has had to cut shareholder dividends.

In the U.S., where President Donald Trump has declared that “the race to 5G is a race that America must win,” spectrum licenses are being sold at historically low prices.

The answer to the question will determine not just the future of the technological resource — referred to as the “lifeblood of the mobile industry” — and the operators themselves, but will also have a major impact on the next stage in the development of the digital economy.

Carriers argue that 5G will offer a faster and more reliable service for everything from video streaming to advanced virtual reality experiences. Governments see the “race” to the new network technology as fundamental to ushering in a world of smart cities, autonomous cars and automated factories where faster, more responsive networks can handle huge amounts of data generated by new industries.

For the telecoms operators, the licenses are the “ticket to ride” — access to the infrastructure that will be critical to their future success, even existence. For governments, they are no less important, yet some cash-strapped administrations have been sending out mixed signals over how to strike a balance between raising billions from a sector already straining to reduce costs while stimulating investment in the rapid deployment of 5G services.

Read more: China’s first 5G live broadcast

It means that two decades after the 3G spectrum sales made headlines by racking up record sums — and almost bankrupting some players — a new spectrum price bonanza is evolving.

Airwaves previously used for everything from academic satellites and analog television broadcasts to wireless microphones used in theaters are being cleared and sold off to the telecoms industry for commercial use to meet the insatiable consumer demand for data.

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