EO TELCOMS NEWS
May 12, 2016
The outcome of the recently held second European 2.6GHz spectrum auction in Sweden has provided useful speculation about the price that operators will pay for the spectrum throughout Europe.
The Swedish auction concluded at a price of €0.13/MHz/pop, with unpaired spectrum going for just below €0.04/MHz/pop and paired spectrum for €0.16/MHz/pop.
A strategy consultant at Analysys Mason has concluded that prices fetched at the 2000/2001 European UMTS auctions, especially in the UK and Germany, are unlikely to be repeated.
On the other hand, operators are reporting a rapid uptake of mobile broadband dongles, and new WiMAX players may be eager to enter the arena, suggesting that prices may still be substantial.
Despite being significantly below the UK and German UMTS auctions in 2000, the prices achieved in the Swedish auction were considerably higher than the recent Norwegian 2.6GHz auction (€0.03/MHz/pop).
Analysys Mason, a respected deliverer of market intelligence worldwide, considers that the Swedish auction may be a more reliable indicator of prices in other upcoming European auctions than the Norwegian auction.
The reason for this is that the competitive situation in Sweden, with four mobile players, is more representative of the situation in most European countries than the Norwegian two-player market.
However, there are plenty of specifics in the Swedish situation that should lead to caution when using this auction result as a benchmark.
Sweden has a very low population density compared to most European countries.
Consequently, it has a relatively low traffic density, leading to lower spectrum demand and hence lower prices.
Secondly, later auctions may be affected by rising expectations in the industry regarding the uptake of mobile data and the anticipation of LTE approaching commercial availability.
Bidders for unpaired spectrum also need to factor out the effect of the PTS’s decision to auction the unpaired spectrum in one block.
This decreased the liquidity of the spectrum, and potentially decreased its value.
Bidders for unpaired spectrum also need to factor out the effect of the PTS’s decision to auction the unpaired spectrum in one block. This decreased the liquidity of the spectrum, and potentially decreased its value.