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.
This paper shares the results of Coleago’s Strategic Spectrum Review, which identifies opportunities for operators to optimise their existing spectrum holdings through swaps, trades, and more efficient allocation strategies.
Key Insights
Spectrum Inefficiencies: Operators hold a patchwork of fragmented spectrum that hampers efficiency, especially for 4G and 5G deployments. A significant opportunity exists to improve spectral efficiency by reorganising spectrum blocks, including moving from Frequency Division Duplex (FDD) to Time Division Duplex (TDD) in bands such as 2.6 GHz. Optimising existing assets in this manner could improve spectral efficiency by 10-30%.
Renewals and Optimisation: Spectrum bands originally assigned for 2G and 3G services are nearing renewal, presenting an opportunity to consolidate fragmented holdings into larger, contiguous blocks. This process can maximise spectrum efficiency and align cost structures with current market demands, reducing reliance on high-priced spectrum auctions.
Future Spectrum Needs: Mobile traffic in developing markets is projected to increase at a compound annual growth rate (CAGR) of over 20% over the next 15 years. With this growth, operators face a potential “capacity crunch” within the next four to five years unless they acquire additional spectrum. On average, operators will need between 100-150 MHz of new spectrum within five years to avoid the need for excessive site builds and meet growing demand.
Spectrum Costs: The total cost of spectrum ownership remains relatively low, generally under 5% of revenue. However, the increasing need for new spectrum will drive up costs, making it critical for operators to negotiate favorable terms and lobby for affordable spectrum prices.
Regulatory Opportunities: Key opportunities for improvement in regulatory frameworks include enabling secondary market spectrum trading, improving spectrum sharing regulations, and creating clearer, more predictable spectrum roadmaps. These adjustments could help mitigate the inefficiencies in spectrum allocation and support faster, more flexible market responses.
Conclusion
Coleago’s Strategic Spectrum Review is a vital tool for mobile operators to manage spectrum-related risks, optimise their current holdings, and plan for future spectrum requirements. Given the rapid evolution of mobile technologies and the need for timely spectrum availability, operators must take proactive steps to maximise spectral efficiency and engage with regulators to ensure that future spectrum needs are met cost-effectively and on time.
Other insights
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.
Kazakhstan 3.6 GHz Spectrum Auction
The Ministry of Digital Development, Innovations and Aerospace Industry of the Republic of Kazakhstan recently announced the results of their spectrum auction for two 100 MHz lots of 3.6 GHz spectrum. The spectrum was acquired by a consortium formed by mobile operators Kcell and Mobile Telecom Service (Tele2-Altel), both part of the Kazakhtelecom Group.
Future Utilisation of the 470-694 MHz Band in the UK
In this report, written for the UK Spectrum Policy Forum ahead of WRC-23, Coleago explores the future use of the 470-694 MHz UHF band in the United Kingdom post 2030. The band is sought after and used by a wide range of services, including digital terrestrial television (DTT), programme-making and special events (PMSE) and mobile services amongst others.
Vision 2030: Low Band Spectrum for 5G
In this report, written for the GSMA, Coleago explores why low band spectrum is the cornerstone of digital equality and affordable connectivity to ensure that mobile’s economic and social benefits can be felt in all communities.
The South African Spectrum Auction: An Insider View
A review of the recent South African spectrum auction and the learning for other regulators seeking to award spectrum to support the development of mobile broadband and 5G.
