Operators will need to consider many universal and local variables to ensure that they acquire spectrum at sustainable prices.
A record number of spectrum licences will be auctioned in 2012. Spectrum is
becoming available in a wide variety of bands, facilitating the roll-out of
next-generation mobile broadband networks ('4G'). Operators need to understand
how to best compare and contrast the different bands to determine appropriate
spectrum asset valuations. This report examines the key strategic, commercial
and technical factors that should inform decision making in the run-up to
spectrum auctions, and explains the results of previous auctions.
This Report answers your key questions:
what are the key trends in spectrum valuation?
is low-frequency spectrum considerably more valuable than high-frequency
bands?
what are the key variables that affect spectrum valuation?
what are the policy trends that may influence spectrum prices?
Companies mentioned in this report: America Movil, Anatel, AT&T, Cell
C, China Mobile, Everything Everywhere (T-Mobile), EVN Telecom, France Telecom
(Orange), Globe Telecom, Hanoi Telecom (Vietnamobile), Hutchison 3G UK (3),
LightSquared, Net4Mobility, Sonera, Telefonica de Espana (Movistar),
Telefonica UK (O2), TeliaSonera, TELUS Communications, Verizon, Vodafone (UK)
and Vodafone Espana.
Table of Contents
Table of Contents
1 Executive summary
2 Recommendations
3 Spectrum valuation trends
The unprecedented number of spectrum auctions planned for
3.1 2012 has generated interest in
spectrum valuation trends
3.2 Three overarching factors inform the valuation of spectrum
4 The technical value of spectrum
4.1 Lower-frequency bands are generally regarded as more valuable than
higher-frequency bands
4.2 The cost of interference mitigation can have an adverse effect on
otherwise attractive bands
4.3 Unpaired spectrum, although generally considered inferior to paired,
is attracting growing interest
from operators
4.4 The unusual abundance of harmonised LTE frequency bands may dilute the
value of spectrum
over time
5 The commercial value of spectrum
5.1 International harmonisation of the spectrum band drives the device
ecosystem, which in turn
drives spectrum value
5.2 Potential profits and the level of market development will affect the
ability of operators to fund
the purchase of spectrum assets
5.3 Spectrum prices will be affected by the challenging financial
situations facing operators, coupled
with the difficult macro-economic conditions
5.4 Operators' attention is turning from coverage to capacity concerns,
increasing interest in higherfrequency
bands
6 The strategic value of spectrum
6.1 Auction revenue is sensitive to the regulation and format of the
auction
6.2 The imposition of coverage obligations has a limited effect on
spectrum prices
6.3 Demand for spectrum is determined by the level of competition in the
market
6.4 Liberalisation of spectrum policy is facilitating the sharing of
assets, including spectrum,
thereby decreasing spectrum demand and value
6.5 HSPA+ could be sufficient for some operators in the short term
6.6 The release of 700MHz second digital dividend spectrum would diminish
operators' need to buy
800MHz and 900MHz spectrum in some markets
About the authors
About Analysys Mason
Research from Analysys Mason
Consulting from Analysys Mason
List of figures
Figure 1.1: The three principles of spectrum valuation
Figure 3.1: Mobile network traffic, worldwide, 2011 - 2016
Figure 3.2: Number of known spectrum auctions by frequency band,
worldwide, 2011 - 2013
Figure 4.1: Spectrum prices achieved at auction by frequency band,
worldwide, 2008 - 2011
Figure 4.2: Number of spectrum auctions by frequency band, worldwide, 2008
- 2011
Figure 4.3: Spectrum prices achieved at selected 1800MHz auctions, by
country, 2010 - 2011
Figure 4.4: Average LTE site coverage in urban areas, by frequency band
Figure 4.5: Spectrum prices achieved at selected 800MHz auctions, by
country and lot, 2010 - 2011
Figure 4.6: Prices achieved for FDD and TDD spectrum at selected 2600MHz
auctions, by country, 2007 - 2011
Figure 4.7: Planned and operational deployments of LTE networks,
worldwide, February 2012
Figure 5.1: GDP per capita versus average mobile ARPU in Europe, 2011
Figure 5.2: Mobile penetration versus average mobile ARPU in Europe, 2011
Figure 5.3: Mobile ARPU for active subscribers, worldwide, 1Q 2004 - 3Q
2011
Figure 5.4: Selected mobile operators' EV/EBITDA ratio and the worldwide
GDP growth rate, 2006 - 2011
Figure 6.1: Prices achieved for 2100MHz spectrum at auction, France, 2009
Figure 6.2: Prices achieved for 800MHz spectrum at auction, Sweden, 2011
Figure 6.3: Normalised HHI versus ARPU in Europe, 2011
Figure 6.4: Key elements of HSPA+, LTE and LTE Advanced
Spectrum valuation: critical strategic, technical and commercial factors for operators and regulators published by Analysys Mason in March 16, 2012. This report consists of 31 Pages and the price starts from US $ 4999.
