Over the last months we have updated our position papers on pricing, sharing, and how governments and regulators can support mobile networks for verticals without negatively impacting commercial 5G services. The remaining piece of the puzzle is our position paper on spectrum auction best practice, which is launching today.
The goal with these updated position papers is to help governments and regulators make bold decisions that encourage the roll out of world-class 5G networks and services. Put simply, the speed, reach and quality of mobile services are all heavily dependent on the support of governments and regulators, especially via well-planned assignments. Timely access to the right amount and type of spectrum, and under the right conditions is key.
This year, decisions made all over the world have the potential to make a positive impact. New spectrum assignments are planned across 30 countries. This is the highest number of assignments in a year since 2017 – when the first 5G auctions took place, according to GSMA Intelligence’s Spectrum Navigator, Q2 2021 report. Momentum is building for the 700 MHz band, especially in Europe, where more awards are expected. Assignments in mmWave bands will also gain traction for the rest of 2021 and beyond, while mid-bands remain the focus for 5G all over the world.
An enduring interest for the media, and national treasuries, is how much money a spectrum auction will raise. The truth is that the most successful auctions aren’t the ones that bring in the most revenue, and, in fact, in-depth research shows just the opposite. Higher prices can lead into reduced investments and result in limited coverage, lower speeds, and possibly higher prices to consumers. Other decisions that can have negative impacts include artificially restricting the amount of spectrum operators can access, through set-asides, and poorly chosen lot sizes.
Therefore, with our updated position paper, we make the case that policymakers must take the negative impact of poorly designed auctions seriously. The discussions on this topic have started to change. That’s reason for optimism. However, further and wider change is needed so everyone can benefit from the socio-economic benefits of well-designed assignments sooner.
The GSMA’s updated paper provides a background on why auctions are so common, explains some different auction types, and describes the wider process of running an auction. It also includes the GSMA’s positions on recommended best practice:
1. The top priority for spectrum auctions should be to support affordable, high-quality mobile services;
2. Auctions are a tried and tested award mechanism but can and do fail when poorly designed;
3. Auctions should not be the only award process as they are not always suitable;
4. Auctions designed to maximise state revenues risk serious harm to consumers;
5. Assign a sufficiently large amount of spectrum and publish roadmaps to support high-quality mobile services;
6. Spectrum caps and set-asides distort the level playing field;
7. Licence obligations and conditions should be designed to minimise the cost of covering non-profitable areas, and avoid distorting the award of spectrum;
8. The chosen auction design should not create additional risk and uncertainty for bidders;
9. Poorly chosen lot sizes or inflexible packages of spectrum lots risk inefficient outcomes;
10. Policymakers should work in partnership with stakeholders to enable timely, fair and effective awards.
Download the position paper here.