A brief note on why I don’t believe spectrum coordination will happen in the EU
Since September when the European commission released their vision of a Single EU telecom market, the critique has been massive. One of the corner stones of the Single EU market is the coordination of spectrum assignments. In hindsight, it is true that the lack of coordination in releasing the 800 MHz band across EU has had a negative impact on the LTE uptake. However will the coordination of spectrum assignments be part of the answer to Europe being in lead of LTE in 5-10 years? I would say no, LTE will soon make it big despite uncoordinated spectrum assignments. And it better, because in 10 years time it will still not be possible to coordinate the spectrum release programs within EU.
For example, since I am Swedish, let’s take a look at the Nordic market. Let’s compare Sweden and Finland to illustrate the challenges in Spectrum coordination.
In Sweden the 4 mobile operators have together paid 5.3 Billion SEK (616MEUR) in the past for licenses in the 800, 1800 and 2600 MHz-band. These licenses will expire 2037, 2035 and 2023 respectively. The 2100 licenses which were awarded based on a beauty contest back in 2000, will expire 2025.
In Finland, the mobile operators have “only” paid for two of the license bands, 800 and 2600, summing up to 110MEUR. The 800 band was recently auctioned and the assigned licenses will last for 20 years to 2033 and the 2600 MHz band licence expires in 2029. However the 1800 and the 2100 licenses expire already in 2017.
If we take the 1800-band as an example there is a gap of 18 years between the license expiry dates in Sweden and Finland and for 2100-band there is a gap of 8 years. The likeliness that the Swedish operators are willing to give up their highly paid license in advance is as low as the likelihood that the Finnish government would give up the cash that the 1800 and 2100 licenses would give them if auctioned on the regular 20+ year terms of a license. In addition the incentives for the operator to invest in the network if the license term is much shorter, let’s say an interim period of 5 years, is not very high, and then the end-users will suffer.
If the EU commission wants to go ahead with their vision of a Single EU telecom market, they sure need to explain how they will achieve an EU-wide coordination of spectrum allocation within a foreseeable future.
Johannah is a Manager at Northstream
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