To close the connectivity gap, accommodate growth in data traffic, drive the Internet of Things and realise the full potential of 5G, mobile networks must evolve. To support this evolution, mobile operators need access to sufficient spectrum in low, mid and high bands.
Long-term planning and effective spectrum licensing play vital roles in providing operators with access to this necessary resource. To encourage investment in mobile services, it is important to have transparent, long-term national broadband plans that include a strategy for making sufficient spectrum available to the mobile industry. This creates certainty and allows the industry to invest, innovate and thrive.
How spectrum is priced also has a significant impact. Governments that seek to maximise state revenues from spectrum pricing risk deterring investors and undermining competition in communications markets. Research shows that high spectrum prices are linked to slower network speeds and lower coverage. The primary goal of pricing mechanisms should instead be broadband development.
Each of the WRC agenda items looks at the frequency bands developed, or under development, for 5G but also used by other services. Part of the work of WRCs is to consider the technical characteristics and sharing conditions to ensure compatibility and that different services can coexist. This may include national guidelines on coexistence or rules for cross-border coordination of services.
Governments need to ensure compatibility between a wide range of services. Particularly in LMICs, consumers use radio equipment such as satellite dishes for long periods, which means some less efficient terminals may be in circulation. To mitigate this, adherence to modern standards for new equipment is vital even if older equipment is still in use.
How can governments “future proof” systems to ensure all new equipment meets modern compatibility standards?
Each new generation of mobile technology is more efficient than the last and can use spectrum to provide greater connectivity, but additional spectrum needs still exist, driven by higher demand for connectivity beyond efficiency gains. 5G also uses active antenna systems (AAS), which provide a leap in efficiency with their precise targeting of connections where the user is located. This enhances compatibility with other services.
The mobile industry benefits from WRC decisions that develop the use of harmonised bands for mobile and help to mitigate interference between services using radio spectrum. Harmonised use of frequencies is one of the benefits of agreements at the ITU. Defining radio transmitter and receiver parameters helps to ensure compatibility between radio systems operating in the same or adjacent frequency bands. Detailed technical coordination at the ITU and in standardisation bodies, such as 3GPP, helps advance spectral efficiency and minimise guard bands.
To maximise efficiency and support optimal coexistence, it is important to look at the receiver performances of legacy services. Older systems, including some satellite receivers, have historically been linked with claims that their susceptibility to interference require huge guard bands to ensure compatibility between services. In a modern communications environment, such guard bands are a barrier to economic development and should be avoided. More efficient satellite receivers should be used by service providers in this case, and filters used where necessary to ensure consumers get the best possible access to connectivity.
5G will support significantly faster mobile broadband speeds and heavier data usage than previous generations of mobile technology while also enabling the full potential of the Internet of Things. From connected cars and smart cities to the industrial internet and fibre-like FWA, 5G will allow more devices to access more data than ever before. The efficiency of 5G will be essential to preserving today’s most popular mobile applications, such as on-demand video, in an environment of high-user demand. It will help ensure that growing capacity demands can be sustained, but requires access to low-, mid- and high-band spectrum.
The following usage scenarios are the four main pillars of 5G:
- Enhanced mobile broadband, including multigigabit per second (Gbps) data rates.
- Ultra-reliable low-latency communications, including very low latency (sub-1 milliseconds), very high availability and very high security.
- Massive machine-type communications, including the ability to support a huge number of low-cost IoT connections.
- Fixed wireless access, including the ability to offer fibre-type speeds in both high-income and low- and middle-income markets.
The success of 5G services will depend on national governments and regulators. The speed, reach and quality of services will require governments and regulators to support timely access to the right amount and type of spectrum under the right conditions.
Mobile operators need clarity on the access they will have to spectrum before launching new technologies, such as 5G, or upgrading network capacity to support long-term investment. Where spectrum shortages exist, mobile operators will need to create denser networks with more base stations, which will increase broadband costs for consumers as well as energy consumption.
The roadmap for spectrum access should be made transparent by governments and regulators to optimise network planning and reduce capital expenditure. By working together with industry, governments can help ensure connectivity is affordable.
The GSMA recognises an average total of 2 GHz of mid-band spectrum needs to be made available to licensed mobile. Regulators need to decide how to meet this demand for 5G capacity and which harmonised bands can be used.
5G needs a significant amount of new harmonised mobile spectrum. Governments should carefully consider 5G spectrum demands when 5G usage reaches its peak, and advanced use cases will require additional spectrum.
The mobile industry believes that:
- Regulators should plan to make, on average, 2 GHz of harmonised mid-band spectrum available between 2025 and 2030 to support 5G. This includes making 80–100 MHz of contiguous mid-band spectrum per operator available at launch. Channels of around 1 GHz per operator in millimetre wave bands (i.e. above 24 GHz) will be required.
- Governments and regulators should support new harmonised bands globally to help 5G services grow over time (e.g. UHF, 3.3–4.2 GHz, 4.8 GHz and 6 GHz). This includes engaging in the World Radiocommunication Conference (WRC) process to ensure sufficient mid- and low-band spectrum are available.
- Exclusively licensed spectrum over wide geographic areas is vital to the success of 5G, although spectrum sharing and unlicensed spectrum can play a complementary role. The speed and quality of 5G relies on guaranteed spectrum access.
- Setting spectrum aside for local or vertical usage in harmonised 5G bands could jeopardise the success of public 5G services and may waste spectrum. Sharing approaches like leasing are typically better options.
- Governments and regulators should avoid inflating 5G spectrum prices as this is linked to slower broadband speeds and worse coverage. Excessive reserve prices, annual fees, limited spectrum supply (e.g. through set asides) and poor auction design should be avoided.
- Regulators should carefully consider 5G backhaul needs, including making additional bands available and supporting wider bandwidths in existing bands. Measures should also be taken to ensure licences are affordable and designed effectively.
- Regulators should carefully consider the right 5G spectrum licence terms, conditions and awards approach and consult with industry to maximise the benefits of 5G.
- Governments need to adopt national spectrum policy measures to encourage long-term heavy investment in 5G networks (e.g. long-term licences, clear and transparent renewal processes and spectrum road maps).
Governments need to manage the renewal of licences approaching the end of their initial term and release spectrum in both new and existing bands for mobile broadband services. At the same time, they should encourage important processes such as refarming.
Effective management of these processes is vital to encourage continued investment and development in the mobile sector.
Auctions are widely considered the most effective means of ensuring spectrum is held by those who can make the best use of it. Administrative assignments (e.g. “beauty contests”) are also sometimes used when licensing the rights to use a particular spectrum band. Sometimes, a hybrid approach may also be used, where a shortlist of bidders is selected before an auction based on administrative criteria.
Auctions work best when there is excess demand for the spectrum and they help to select the operators most likely to put it to the best use and benefit society. Administrative assignments, on the other hand, may be suitable where there is less demand and may allow authorities to compare the range of policy objectives offered by the candidates.
Whichever approach is chosen, it must be implemented with care. This includes identifying issues through public consultation and weighing the trade-offs in specific design choices (noting the importance of efficient spectrum use and safeguarding competition). Sufficient time and transparency must be provided to allow potential candidates to make informed decisions.
Administrative assignments must be well planned to succeed. The selection criteria and process must be clear and the weight given to each objective should reflect its importance to society. The use of subjective criteria, or a lack of transparency, increase the risk of favouritism and corruption, as well as the potential for the outcome to be challenged in the courts. It may be necessary to make a trade-off between policy objectives and the licence fee. Even where the objective is clear, estimating the appropriate price can be challenging.
A particular problem of administrative assignment is the risk that successful applicants will not fulfil their offers, particularly if market or technology forecasts prove inaccurate. Licensing authorities should set out in advance what penalties will be imposed if commitments are not met.
Auctions are an efficient way to allocate spectrum when there is competition for scarce spectrum and demand is expected to exceed supply. However, to succeed, they need to be carefully planned. Excessively high reserve prices may result in spectrum going unsold.
There are several different auction designs to choose between, each with its strengths and limitations. While multiround auctions are often preferred, the best choice depends on market conditions and the objectives of the government and regulators. The most common are simple clock auctions, simultaneous multiple-round ascending auctions (SMRAs), sealed bids, combinatory clock auctions (CCAs) or hybrid approaches.
When assigning spectrum via an auction, government objectives include:
- Maximum long-term value to the economy and society;
- Efficient technical implementation of services;
- Sufficient investment to roll out networks and new services;
- Revenue generation for the government;
- Adequate market competition; and
- A fair and transparent allocation process.
Auctions can lead to more efficient spectrum use, but auction design and rules are important. Certain design choices raise the risk of spectrum not being sold or limiting network investments. For regulators, the main challenge is balancing the objectives of efficient spectrum assignment and supporting competition in communications markets. Again, seeking to maximise auction revenues can have significant costs for society, especially the digital economy, if competition in communications markets is undermined and network investment is limited.
Low participation should also be a concern, especially in mature mobile markets. A wide variety of tools are available for regulators to address these issues, including the choice of auction format, determination of spectrum lots, spectrum caps and set asides, bid information disclosure and reserve prices. However, these tools are often conflicting, and their effectiveness will depend on local market conditions.
Auction design is a delicate balancing act, but there is little doubt that policy decisions have an impact on the quality of mobile services. How should governments decide which spectrum assignment method to use?
Efficient allocation of spectrum is necessary to realise the full economic and societal value of mobile.
Spectrum auctions must be designed to reflect market conditions and achieve the government’s stated objectives. The choice of auction format (e.g. simultaneous auctions where multiple bands are auctioned together or sequential auctions where bands are auctioned one after the other), like other decisions in the spectrum assignment process, depends on specific market conditions. Having a clear spectrum road map with well-defined rights and conditions understood in advance is key.
Regulators should work with stakeholders to ensure the auction design is fair, transparent and appropriate for the market. Auctions should also be designed to maximise the long-term economic and social benefits of spectrum. The following key principles can help guide licensing authorities:
- Auctions can produce important social benefits if they are properly designed;
- High spectrum prices jeopardise the effective delivery of mobile services;
- Spectrum licences should be technology and service neutral;
- Licence conditions should be used with caution;
- Licence duration should be at least 20 years to incentivise network investment;
- Competition can be supported by licensing as much spectrum as possible and limiting charges and other barriers to services; and
- Voluntary spectrum trading should be encouraged to promote efficient spectrum use.
The development of new mobile technologies alongside the cloud, big data and machine learning, is transforming how vertical industries can use connectivity. Verticals are companies, industries and public sector organisations operating in a specific sector. While they have traditionally deployed private networks to support their connectivity needs, this is changing as their requirements have evolved to include more advanced capabilities.
The new technologies range from creating smart utility grids and automating manufacturing, to delivering goods by drones and supporting advanced public safety and transport networks. Policymakers play a vital role by managing the spectrum that underpins these developments. However, great care needs to be taken to ensure verticals are fully supported without harming other wireless users, especially the consumers and businesses that rely on 4G and 5G.
Vertical industry needs are often met through partnerships with telecoms providers, including public mobile operators, using licensed spectrum. This allows them to benefit from the telecoms providers’ extensive networks, substantial spectrum assets, expertise and, typically, lower cost base. However, some verticals may continue to operate private networks and thus may want access to additional spectrum to support advanced broadband capabilities.
This is a challenge for policymakers as widespread demand for additional spectrum outweighs supply. It is also difficult given that some verticals may want direct access to spectrum in priority 4G and 5G mobile bands (e.g. 700 MHz and 3.5 GHz) so they can benefit from the mobile equipment ecosystem and lower their deployment costs.
Spectrum for drones
Unmanned Aerial Vehicles (UAVs), or drones, have the potential to deliver profound socio-economic benefits. These range from transforming how businesses deliver their products to supporting life-saving services such as drug delivery in remote areas. However, this is all contingent on effective UAV authentication, monitoring and connectivity.
These benefits can only be realised if regulators remove barriers to using mobile networks to support UAVs, most notably those associated with the use of licensed mobile spectrum. Licensed mobile spectrum enables widespread, high-quality connectivity for UAVs with sufficient capacity to support competitive services and rising usage levels.
Mobile services in licensed bands are well established and can be used to support UAV connectivity where permitted by regulators. Mobile operators typically have exclusive access to coverage spectrum to reliably cover very wide areas and capacity spectrum that supports faster data speeds. Taken together, this means operators can support safe, reliable, wide-area broadband connectivity for UAVs.
Regulators should also adopt a service- and technology-neutral framework to fully support UAVs. This will facilitate the development and growth of UAV connectivity. Spectrum licences that are technology specific may limit the ability to provide high-speed data connectivity for UAVs (e.g. 3G or 4G) or new IoT-specific cellular technologies that could provide simple narrow-band authentication and identification (e.g. NB-IoT or LTE-M).
Spectrum for IoT
The Internet of Things (IoT) is an enormously important and rapidly growing market with the potential to transform the digital economy. Mobile services play an important role in the wide-area IoT market and are evolving to meet an array of requirements. For example, the key markets for mobile IoT solutions include the utility, medical, automotive and retail sectors. This is in addition to current consumer electronics devices, including e-book readers, GPS navigation aids and digital cameras.
According to data from GSMA Intelligence, the total number of IoT connections is predicted to grow from just over nine billion (9.1 billion) in 2018 to 25.2 billion by 2025, with the total IoT revenue opportunity worth $1.1 trillion by 2025.
The requirements of wide-area IoT services vary much more than those for traditional mobile services. This has meant that mobile technology standards are being continuously updated to support these use cases, which is driving innovation and ensuring that mobile IoT is well placed to compete effectively with other IoT solutions.
Licensed spectrum is vital in order to deliver the most reliable IoT services and has a unique ability to support quality of service guarantees over wide areas. Networks using licensed spectrum are not at risk of interference and operators can control usage levels on their networks.
As a result, licensed mobile IoT may be the only choice for services that require concrete assurance levels, such as security and medical applications.
The viability of mobile IoT is contingent on governments adopting a positive regulatory and spectrum framework. This must not impose service or technological restrictions that hold back innovation. Instead, it should be designed to nurture evolution in the capabilities of mobile networks and allow the market to decide which solutions will thrive.
International spectrum harmonisation is vital for the development of a global, affordable mobile IoT market. It enables the development of mass-market, low-cost mobile IoT devices through the creation of an addressable market that is large enough to support manufacturing economies of scale.
Harmonised mobile spectrum is needed to support all wide-area IoT use cases, including coverage bands for Low-Power Wide-Area (LPWA) use cases and capacity bands for high-bandwidth applications like video streaming.
Regulators should work with the mobile industry to support IoT in 5G spectrum planning, as 5G is expected to play an important role in the evolution of mobile IoT.
As governments turn their attention to supporting high-speed network roll outs, regulators face the daunting challenge of deciding who gets access to spectrum. How can governments and regulators develop spectrum policies that support mobile networks for verticals without negatively affecting commercial 5G services?
Policymakers should ensure that verticals can get the connectivity they need to support their use cases without undermining other spectrum users while also upholding fair and efficient assignment of mobile bands.
A core concern is the use of dedicated set asides for verticals since these pose significant risks to wider mobile services, most notably slower 5G networks and reduced coverage. There are other options to support verticals and other ways to provide access to spectrum for these networks.
Spectrum set asides can lead to insufficient spectrum available for mobile operators to use and prevent them from meeting all 5G requirements and capabilities. Scarcity also encourages higher prices to be paid for spectrum, which is strongly linked to less network investment, slower roll outs, limited coverage and reduced data speeds. Where industries require access to specific licensed bands, they can do so via sharing and leasing agreements with mobile operators, for example.
The mobile industry believes:
- Commercial mobile operators already support the needs of a wide variety of vertical sectors and will have added capabilities with 5G.
- Spectrum leasing or, when carefully planned, other types of spectrum sharing can be viable options for supporting verticals that want to build private networks.
- Spectrum that is set aside exclusively for verticals in core mobile bands risks being underused and can undermine fair spectrum awards.
- Spectrum that is set aside for mobile networks for verticals in core mobile bands can also threaten the wider success of 5G, including slower roll outs, worse performance and reduced coverage.
- Policymakers should consider the coexistence challenges when different use cases need to be supported in the same mobile band.
- Unlicensed spectrum is likely to play an important role for numerous verticals.
- Policymakers should carefully consider their options and consult stakeholders to ensure they most efficiently support the needs of verticals without undermining other spectrum users.
Spectrum harmonisation is the uniform allocation of radio frequency bands under common technical and regulatory regimes, across entire regions. Adherence to internationally identified spectrum bands has many advantages:
- Lower costs for consumers, as device manufacturers can mass produce devices that function in multiple countries and realise economies of scale;
- A wider range of devices supported by a larger international market;
- Roaming or the ability to use a mobile device abroad; and
- Fewer cross-border interference issues.
Harmonised bands for mobile are listed in the earlier part of this section. Work towards their harmonisation has taken different forms.
Historically, the first point towards harmonisation was agreement through the ITU at a World Radiocommunication Conference (WRC) treaty meeting. Past WRCs were responsible for all the early mobile bands, including 900 MHz, 1800 MHz and 2.6 GHz. Mobile allocation for a particular frequency band, and additional IMT identification, have always been sought at past WRCs to harmonise mobile use.
The WRC process is still a useful way to support harmonisation. At the WRC in 2015, for example, agreement was reached on the creation of three global spectrum bands for mobile: 700 MHz, 1427–1518 MHz and 3.4–3.6 GHz. In 2019, mmWave bands were discussed and the harmonised use of 26 GHz, 40 GHz and 66 GHz was agreed.
However, countries develop their communications systems at different rates, and negotiations at the ITU have struggled to keep pace with the needs of the fastest-moving markets. Over the past 10 years, countries have been developing bands for mobile use on their own, either regionally or unilaterally, to meet demand.
This has been clearest with activity around the 3.5 GHz range. Only 200 MHz of spectrum in the 3.3–4.2 GHz range was agreed by the WRC-15 but, even before the 2015 conference, demand in some parts of the world had already risen well above that figure. Today, as much as 700 MHz is available in this spectrum band in some countries, leaving WRCs to tidy up harmonisation rather than initiate it.
Spectrum harmonisation through the WRC process remains an important goal and helps enable lower cost mobile devices through economies of scale. However, many governments and regions, such as the EU or ASMG, are charting their own path, making inter-regional harmonisation and industry guidance on spectrum use vital to the spectrum development process.
What planning tools, forecasts of spectrum needs and technology analysis are required to support long-term development?
Governments that align national spectrum use with internationally harmonised band plans will achieve the greatest benefits for consumers and avoid interference along their borders.
The mobile industry has had concerns about the pace of the WRC process for the past 15 years. Rapid growth in consumer demand for mobile has prompted countries and regions to look beyond WRCs to provide access to new mobile bands.
Where this has been necessary, multiregional harmonisation has been broadly achieved by loose consensus based on equipment availability. However, this approach risks leaving slower-moving nations without input into which bands are best used, as equipment will only be developed in bands used by early-adopter nations. For WRCs to once again be the starting point for spectrum development, they need to look at least 10 years ahead. Recent conferences have not managed to do so.
At a minimum, harmonisation of mobile bands at the regional level is crucial. Even small variations in standard band plans can result in many devices not being usable, with costly consequences for consumers.
All markets should harmonise regionally where possible, as this benefits the entire global mobile ecosystem. Sometimes technology advances, such as carrier aggregation or dynamic spectrum access, are believed to supersede the need for harmonisation. However, these are technical processes, requiring more complex handsets that need more power. While they are a help, they do not replace harmonisation as the best means of assuring affordable communications services.
Spectrum harmonisation has created economies of scale for mobile networks that, in turn, have made mobile services and handsets more affordable. Widely harmonised mobile spectrum is again needed at the next WRC in 2023 to achieve these goals.
The 2023 conference will differ from earlier WRCs in that many of the bands it is likely to harmonise – 600 MHz, 3.6–3.8 GHz and 4.8 GHz – have already been developed for mobile and are in use today. Meanwhile, development of the 6 GHz range is well under development.
WRC-23 must therefore ensure that the harmonisation of these bands is spread as broadly as possible to achieve the greatest economies of scale. This will ensure 5G, and subsequent generations of mobile networks, meet expectations and deliver the full range of affordable services.
The work of any WRC is split into different portions of the agenda, with different subjects allotted their own agenda item or workstream. Mobile spectrum discussions cut across several agenda items.
WRC-23 frequencies being considered
Band Agenda item
470–694 MHz 1.5
3.3–3.4 GHz 1.2
3.6–3.8 GHz 1.2, 1.3
4.8–4.99 GHz 1.1
6.425–7.125 GHz 1.2
10–10.5 GHz 1.2
As low-band signals propagate further, they are more effective at covering wide areas. The mobile industry requires additional spectrum below 1 GHz to improve the performance of 5G networks in areas where higher frequencies, which have high capacity but do not propagate as far, are not affordable to use. These areas include wide rural and some suburban areas where dense networks would be too costly to provide efficient broadband. Low frequencies also provide better penetration in buildings.
For countries with large rural populations, the bands below 1 GHz will improve digital inclusion and help meet targets for equal digital opportunities, including healthcare and education. Additional spectrum for mobile in the UHF band can thus support several common policy goals, such as greater digital inclusion, a smaller urban/rural digital divide, better access to e-government and smart health care/education and lower consumer broadband prices.
The 3.5 GHz range is the 5G launch band in most countries and, as such, has the deepest ecosystem and most affordable devices. 3.3–3.4 GHz and 3600–3800 MHz are both being discussed at WRC-23 under Agenda Item 1.2 and 1.3. These two bands are being considered on either side of the 3.4–3.6 GHz band harmonised at WRC-15. Development of both sub-bands will help support the mid-band capacity requirements of 5G.
The GSMA believes that the 4.8–4.99 GHz band provides a good option for supplementary mobile spectrum. Following the implementation of 5G in the 3300–3800 MHz range, this band could expand the capacity of future networks and has already been considered through new assignments in China and Russia, nearby assignments in Japan, new announcements in the United States and the on-going activity of WRC-23.
The 6 GHz range is a high priority for the GSMA and our members in all three regions supporting 5G in this band. In a recent member survey, this band was supported by 90 per cent of GSMA operator members globally. The mobile industry believes that assigning an average of 2 GHz of mid-band spectrum for 5G will be very difficult in most cases without the use of this band.
The mobile industry believes that 10–10.5 GHz and 10–10.5 MHz would provide valuable additional capacity between mid-band and mmWave. This spectrum is being studied in the Americas as a potential supplement to mid-band capacity.
Managing spectrum renewals effectively is a vital part of any country’s spectrum management strategy. The prospect of licences expiring creates significant uncertainty for mobile operators. A transparent, predictable and coherent approach to renewal is therefore important as it enables operators to make rational, long-term investment decisions.
There is no standard approach to renewing or relicensing spectrum, but a presumption of renewal is generally widely suitable. Each market needs to be considered independently, with industry stakeholders involved at all stages of the decision process. Failure to effectively manage the process can delay investment in new services, potentially affecting mobile services for millions of consumers.
There is growing competition for access to spectrum. How can regulators balance the need for clarity on renewals with the spectrum needs of new stakeholders?
The right approach to licence renewals is an important part of a successful spectrum management strategy. Uncertainty over future rights to spectrum use may lead operators to cease investment in their networks and compete less to grow their customer base until issues are resolved.
The presumption of licence renewal and clear and timely renewal decisions are crucial to mobile network development, as they provide mobile operators the certainty they need to make large, long-term investments in their network and mobile services. A decision not to automatically renew a licence should only be made in circumstances where the benefits of reassigning spectrum would outweigh the costs.
Recommendations on licensing and renewal approaches:
- Where spectrum is to be assigned for the first time, there is no single best licensing approach and authorities should make their decision based on the specific market context.
- When selecting an assignment approach, licensing authorities should prioritise efficient spectrum use and network investment while also ensuring effective competition.
- Whether an auction or administrative assignment is adopted, the details of the implementation should be transparent and provide certainty for the future.
- The decision to not automatically renew a spectrum licence should only be made when there are clear potential benefits from reassigning spectrum. This includes more efficient spectrum use or longer competition time that are likely to outweigh the costs (e.g. disruption to services and customers, the risk of deterring investment and customer service degradation and any required network reconfigurations).
- Licensing authorities should work in close partnership with stakeholders to enable a timely, fair and successful licensing process.
Spectrum licensing is central to the delivery of high-quality mobile broadband services and long-term investment in networks. The amount of spectrum made available and the terms on which it is licensed drive the cost and quality of mobile services.
Mobile is a capital-intensive industry requiring significant investment in infrastructure. Governments’ spectrum licensing policies, when supported by a stable, predictable and transparent regulatory regime, can make markets dramatically more attractive to investors.
Spectrum management for mobile telecommunications must include the release of new spectrum in harmonised mobile bands, renewal of licences coming to the end of their initial term and the assignment of new bands for mobile broadband services.
Spectrum licensing is the heart of mobile services. What measures can policymakers implement to guarantee long-term investment and certainty?
Effective spectrum licensing is critical to the future expansion of mobile services. Licensing frameworks should encourage the investments needed to expand mobile access, meet increased demand and enhance the range of services offered.
At its core, a licensing framework should:
- Ensure operators have access to sufficient spectrum;
- Provide predictability to support the new network investment needed; and
- Avoid costly restrictions on the use of spectrum beyond those needed to manage interference.
Success depends on tailored approaches that consider specific market circumstances. The best approach should consider policy objectives as well as market conditions. The latter should include current spectrum use, the competitiveness of the market and the risks to investment and service quality.
Long-term planning is vital to encourage investment in mobile services.Success depends on having a transparent, long-term road map that includes a strategy for making sufficient spectrum available to the mobile industry.
Licence conditions, other than those relating to coexistence, should be kept to a minimum or removed entirely. Other objectives, including coverage requirements, can be addressed effectively through direct policy.
A licence duration of at least 20 years will incentivise network investment. A 20-year or longer licence period offers the certainty mobile operators need to expand and upgrade networks. The use of indefinite licence terms can make operators even more willing to invest.
As mentioned previously, spectrum pricing has a significant impact on investment and the quality of mobile services. Governments that seek to maximise state revenues from spectrum pricing, for example, risk deterring investors from upgrading their networks. Research also shows strong links between high spectrum prices, slower network speeds and lower coverage.
Mobile networks today operate across an evolving range of technologies, from 2G to 5G. Each of these technologies requires spectrum relative to the role they play in society. 2G voice applications use small tranches of spectrum compared to the much wider channels required for dense, high-throughput 5G usage. Governments can support mobile growth by having a long-term vision of the spectrum access mobile operators will receive.
In some regions, 2G and 3G networks are starting to be switched off. These technology sunsets allow spectrum to be refarmed for more efficient technologies such as 4G and 5G. However, the capacity burden on 5G networks, due to the higher number of devices that will need to be connected and the growth in average user data traffic, will be far higher than previous generations of mobile.
Meeting demand requires spectrum capacity in low-, mid- and high bands. Low-band spectrum has the best propagation, but also the smallest capacity, while high-band spectrum has huge capacity but the signals do not reach as far. Mid-band spectrum balances coverage and capacity for city-wide coverage.
Although countries in different regions have adopted different combinations of those bands, regional and global harmonisation have created economies of scale that, in turn, have made mobile services and handsets more affordable.
Low bands: sub-1 GHz
Low bands support wide-area coverage and improved indoor connectivity across urban, suburban and rural areas. Increased low-band capacity is required to create greater equality between urban and rural broadband connectivity and address the digital divide.
Mid-bands: 1 –7 GHz
Mid bands offer a balance of coverage and capacity. Most commercial 5G launches so far have relied on spectrum within the 3.3–3.8 GHz range. Other bands, which may be assigned to or refarmed by operators for 5G include 1500 MHz, 1800 MHz, 2.1 GHz, 2.3 GHz and 2.6 GHz. More spectrum will be needed to maintain 5G-quality of service and meet growing long-term demand (e.g. 3.3–4.2 GHz, 4.8 GHz and 6 GHz).
High bands (including mmWave)
High-band spectrum, such as mmWave, supports the ultra-high broadband speeds envisioned for 5G. These bands produce the highest throughput and lowest latency and include bands such as 26 GHz, 28 GHz and 40 GHz.
High spectrum prices are associated with more expensive, lower quality mobile broadband services. They can lead to irrecoverable losses in consumer welfare worth billions of dollars worldwide. Research shows that when prices are too high, mobile operators are likely to invest less in their networks which, in turn, affects the quality and reach of their services.
High spectrum prices are particularly harmful in LMICs where the cost of mobile ownership accounts for a higher percentage of income than in high-income countries. In some cases, affordability has become a major roadblock to widespread mobile penetration.
The cause of extreme prices are typically policy factors that prioritise maximising short-term state revenues over long-term support for the digital economy. Examples include:
- Setting excessive reserve prices;
- Making insufficient spectrum available for auction; and
- A lack of clarity on future spectrum releases or the process for renewing expiring licences.
Such factors can create uncertainty and encourage bidding far above operators’ true valuations of the licences on offer.
More and more telecom regulators are recognising the negative impact of high spectrum prices, but getting governments onboard is not always easy. How can regulators and mobile operators work together to highlight the benefits of affordable spectrum to all necessary levels of government?
Spectrum is a valuable asset, but a long-term vision is needed to maximise this value. The primary goal in all awards should be to encourage the most efficient use of spectrum through investment in widespread, high-quality networks. Many countries around the world have successfully struck the right balance between increasing revenues and delivering efficient spectrum awards.
To do this, the GSMA recommends that governments and regulators:
- Set modest reserve prices and annual fees and rely on the market to set prices;
- License spectrum as soon as it is needed to avoid artificial scarcity;
- Avoid measures that increase risks for mobile operators and force them to overbid for spectrum; and
- Publish long-term spectrum award plans that prioritise societal benefits over state revenues.
Ever increasing data traffic means mobile services must have access to ever-increasing spectrum to meet demand. This creates the need for better spectrum management, to improve the efficiency of spectrum use and ensure its viable use in less economically viable areas. Also, completely clearing new frequency bands for future mobile use has become increasingly difficult.
At the same time, there is a growing thirst for spectrum from new parties, such as industry verticals. Where regulations permit their use, and if implemented correctly, tools such as spectrum sharing, trading and leasing can help make spectrum use more efficient.
Spectrum sharing can make spectrum use more efficient and create more value for consumers, but complex frameworks may hamper uptake. How can governments create a simple sharing framework that still ensures the robust and transparent definition of rights?
Spectrum sharing reduces the spectrum shortages faced by some mobile operators while also ensuring valuable spectrum does not lie fallow. It enables more intensive spectrum use and higher volumes of services, improves service quality and lowers the costs of service provision. All this supports greater capacity and more affordable services.
Spectrum leasing and trading enable the parties with the best information on the value of spectrum to determine its price. To justify the sale, a buyer or lessee needs to create more value from the acquired spectrum than the seller.
Voluntary leasing and trading also reduce risks for operators since they can sell or lease unused spectrum while having the opportunity to acquire new capacity as they grow. The ability to trade and lease licences can ensure that spectrum is used efficiently without additional charges needing to be imposed by government.
Trading is more likely when there is substantial available spectrum, when future spectrum and the regulatory framework are predictable and when there is a need to support network deployment by the lessee, such as for verticals.
Recommendations on spectrum sharing, leasing and trading:
- Licensing authorities should allow voluntary spectrum sharing, leasing and trading among operators and facilitate these mechanisms through clearly defined spectrum rights, long licence terms and limited administrative costs.
- Authorities should only be notified of the agreements taking place so that it is clear who holds spectrum usage rights. Notification enables authorities to assess whether a proposed trade would create any risks to competition.
- Before a formal spectrum secondary market framework is established, authorities should be prepared to assess proposals for sharing, leasing and trading subject to consultation and consider risks to competition or of interference.
- Transparent and well-timed licence renewal processes, and information on spectrum availability, pricing and conditions, will facilitate sharing, leasing and trading.
- Competition issues should be assessed based on the specific circumstances of each sharing, leasing and trading agreement.
- Long licence terms allow the buyer or lessee of the rights to invest in using the spectrum.
Where technology neutrality is written into the terms of licences, operators can upgrade their technology (e.g. from 2G to 4G) in a particular frequency band to meet market demand.
Restricting technology and service use exacerbates spectrum scarcity and prevents customers from gaining access to new and better services. Removing technology-specific restrictions (beyond those needed to manage coexistence) enables a market to maximise the benefits of its spectrum resources on an on-going basis. The ability of operators to introduce new, more spectrally efficient mobile technologies is critical to meeting growth in demand.
Allowing technology-neutral spectrum licences is now regarded as best practice all over the world. Countries that were among the first to implement them have been rewarded with better coverage and higher mobile broadband speeds. For example, Finland was the first to allow the 900 MHz band to be technology neutral, which meant mobile users benefitted from far greater geographical 3G coverage than other European countries. In Asia, technology neutrality in Singapore has created one of the world’s most advanced mobile markets.
New spectrum bands are needed to make the most of 5G, but reusing existing bands will also be possible. What are the best ways for regulators to apply technology neutrality and allow mobile operators to make the best use of existing bands for 5G?
Governments should allow operators to deploy any mobile technology that can technically coexist within the international band plan.
Technology neutrality encourages innovation and promotes competition. This allows markets to determine which technologies succeed and ultimately benefits consumers and society.
Experience from technology-neutral spectrum licensing has raised certain issues. In general, attempts to extract additional revenue when including technology neutrality in licences have backfired and held back the introduction of new mobile technologies.
While renewal processes provide an opportunity to reissue spectrum licences as neutral, regulators should not delay the introduction while waiting for the expiry dates of existing licences. However, when assigning new spectrum, regulators should do so in a technology-neutral manner and not restrict the introduction of next-generation technologies, such as 5G.
The evolution of advanced 4G and the emergence of 5G have created challenges for mobile backhaul – the connection between base stations and the mobile core. 4G and 5G access networks rely on high-quality backhaul networks. Therefore, backhaul must evolve to support significantly higher data speeds, greater resiliency and a wider variety of network deployments, as well as extend coverage further into rural areas.
While fibre remains the standard for backhaul due to its significant data capacity, wireless backhaul plays a vital role as fibre is not accessible or affordable at all sites. Terrestrial wireless backhaul is the most common backhaul method worldwide and will continue to be for the foreseeable future. This is in large part due to the flexibility it offers, from high-frequency wireless backhaul bands that support the fastest 5G speeds, to lower microwave frequencies that support long-link distances for rural base stations.
Terrestrial wireless backhaul continues to evolve with new, extremely wide frequency bands, which will be essential for the fastest 5G speeds, and by supporting denser small cell networks in urban areas. New technologies can also support significantly more data on a given amount of bandwidth and enable bands to be aggregated to create wider bandwidths. Access spectrum is also sometimes used for backhaul in certain situations, known as “in-band backhaul”.
How can governments balance the need for new spectrum for 5G in currently used wireless backhaul bands and the future wireless backhaul needs of 5G?
The combination of new bands and technologies can have a major impact on the performance of mobile networks and the kinds of services they can enable. Governments and national regulators have a role in opening new terrestrial backhaul bands vital for 5G while also evaluating how existing bands can evolve to be suitable for the 5G era and beyond.
This includes looking at widening channel sizes for key bands and, importantly, weighing the pros and cons of other users gaining access to backhaul bands. In the near term, the E-band (70–80 GHz) will be important, especially to support initial 5G growth, but the W-band (92–114 GHz) and D-band (130–175 GHz) will also be vital to powering 5G networks in years to come. V-band (66–71 GHz) is also likely to be used for backhaul and portions will be used for 5G access, as well. The E-band, D-band and W-band can handle 15 to 50 times more traffic than typical popular mid-microwave backhaul bands (e.g. 14–25 GHz).