New Zealand is a globally recognised innovator on spectrum management. The country’s approach to licensing 3.5 GHz using a direct offer highlights this pioneering spirit, and shows other countries how to set the stage for world-class 5G services.
Portions of the 3.5 GHz range, key for 5G development, were set for an auction of short-term spectrum rights during 2020 in New Zealand. This initial announcement was made in 2019. But in 2020, the COVID-19 global pandemic struck the shores of the world and New Zealand was not an exception.
The critical nature of mobile infrastructure has become more evident and relevant than ever during the COVID-19 pandemic. In the current climate, where connectivity is key, making spectrum available can make a significant difference in augmenting coverage and capacity and stimulating productivity and sparking innovation to better move from crisis to recovery.
The main challenge for regulators and mobile operators is finding a balanced compromise to promptly releasing spectrum, as countries manage their path to social and economic recovery.
New Zealand had the option of continuing with the original plan to release the 3.5 GHz short-term rights via a competitive market-based mechanism. It could also have postponed or cancelled the entire plan to release this key 5G band until some later date in the future. There was also the option of exploring additional ways to achieve the release but taking into consideration the current context, country requirements and missed opportunities from not enabling access to additional capacity spectrum during the COVID-19 crisis and recovery.
One key consideration in achieving a successful spectrum release during these unprecedented times is to focus, more than ever, on striking a balance between government objectives, operators’ requirements and consumer welfare.
Instead of delaying the award, New Zealand’s government chose to face any challenges head on. In close collaboration with the mobile operators, it decided to enable the early release of the available 3.5 GHz rights (available for a licence term defined until 31 October 2022) via a direct offer, instead of a market-based or competitive award. The direct offer was made to the parties that had registered their interest to participate in the initial award plan. The outcome, a prompt release of available spectrum useful for 5G, is undoubtedly a much better outcome as compared to this spectrum remaining unused during COVID-19 recovery.
In the end, the outcome achieved the desired balance between consumer benefits, government objectives and the requirements mobile operators are under. This is important for regulators to grasp since operators are required to maintain QoS and support critical services during the COVID-19 crisis and subsequent recovery phase.
The New Zealand Minister for Broadcasting, Communications and Digital Media, Hon Kriss Faafoi, had stated in 2019: “progressing with 5G will ensure New Zealand keeps pace with global developments, give us world-class connectivity, and provide a platform for exciting new applications which can improve future livelihoods and ways of life”. It is certain that this recent release of 3.5 GHz in New Zealand will contribute to this vision.
A great example
In the end, the New Zealand case is a great example of a pragmatic approach to spectrum release which is consistent between government policy objectives and regulatory implementation. The context within which currently planned spectrum releases are being considered is likely to present similar challenges in other countries. The timing of planned spectrum releases and the mechanism for the spectrum award are likely to require deeper consideration of the following:
- Impacts downstream from implementing competitive market-based or tenders during COVID-19 recovery;
- The benefits for citizens from augmenting coverage and capacity without delays;
- The benefits in terms of productivity gains and innovation from innovative services and applications that arise with further densification of 4G and emergent 5G services; and
- Overall lifting of capabilities arising from promptly and adequately releasing the necessary spectrum operators required in each country to serve citizens, governments and businesses.
Countries where spectrum awards are constrained by having a single and hardcoded award mechanism outlined in legislation are likely to face a bigger challenge (i.e. where auctions is the only method allowed). These countries will require not only a deeper consideration of the approach to planned releases during the COVID-19 crisis and recovery, but also in terms of what such constraints mean for the long term. Every spectrum framework should be able to count with versatile tools for national licensing, which can better serve the national spectrum roadmap process and adapt to emerging conditions.
The GSMA calls on governments to work with the mobile industry to find ways to support the mobile industry’s enormous efforts to keep everyone and everything connected in this increasing time of need. Countries such as New Zealand should serve as an inspiration for how effective spectrum licensing, and flexible approach to award mechanism in this extraordinary time can benefit the whole of society, both in the long- and short-term.