Governments own and manage radio frequency spectrum in their territory. Licences to use individual frequency bands are issued to organisations for commercial services such as television, radio and mobile telecommunications, as well as other wireless applications.
Spectrum licences for mobile telecommunications define the frequency band, geographic reach and duration of spectrum usage rights. They may also include conditions such as fees and charges, network coverage and roll-out requirements, and technical or service parameters.
Because market conditions in every country are different, there is no single ‘best practice’ for spectrum licensing. In general, however, governments that take a liberal approach to spectrum licensing, avoiding restrictive requirements, create the best conditions for operators to adopt new technologies and develop new services in response to consumer demand. Some of the regulatory issues related to licensing spectrum for mobile telecommunications are presented here.
Technology neutrality and change of use
The mobile industry has continually enhanced its technologies to increase the performance and efficiency of mobile networks, making it possible for operators to serve more subscribers and provide each subscriber with better, more innovative services per unit of bandwidth. Spectrum licences that are technology-neutral, allowing any noninterfering technology to be used in the specified band, leave operators free to evolve their services as the technology advances.
Many of the original 2G licences are coming up for renewal in the next few years. An issue for many licensing authorities is what should happen to spectrum rights as licences approach the end of their initial term, and this creates significant uncertainty for mobile operators. A transparent, predictable and coherent approach to renewal is therefore important, enabling operators to make rational, long-term investment decisions.
Competition in mobile telecommunications is necessary to keep consumer costs in check and create market incentives for service improvement and innovation. Telecommunications regulators sometimes place limits, or caps, on how much spectrum can be licensed to a single operator, thus opening the market to new commercial entrants. The GSMA recognises that spectrum caps may be appropriate in markets that lack adequate competition, but they should be used with caution to avoid unintended consequences and poor outcomes for consumers.
To ensure the greatest use of spectrum, some governments allow companies that hold spectrum to trade it, fully or in part. This gives mobile network operators greater flexibility in managing their spectrum assets, and promotes innovation by extending spectrum usage rights to other companies through commercial agreements.