Spectrum cash grabs could hinder 5G’s potential

Poorly designed 5G spectrum auctions could seriously hamper the potential of the 5G era before it even begins in earnest, the GSMA has warned.

A new Auction Best Practice by the industry body highlights some key concerns from recent 4G and 5G spectrum allocations, including a trend towards governments artificially inflating spectrum prices.

This could have the effect of limiting subsequent network investment, thus harming consumers and delaying the potential of 5G from materializing.

The GSMA has also outlined policy recommendations for governments including ensuring that the top priority for spectrum auctions is supporting affordable, quality mobile services for consumers.

According to the regulator, spectrum auctions are not always suitable and should not be the only award process considered.

Where an auction model is used, the auction design should not create unnecessary risk and uncertainty for bidders and should include adequate lot sizes with flexible packages of the spectrum.

GSMA Intelligence estimates that the socio-economic impact of 5G will be $2.2 trillion over the next 15 years. But these benefits will depend on a favorable regulatory and policy environment for 5G.

“Auctions can and do fail when poorly designed. We’re seeing a worrying trend of badly run spectrum awards that could seriously impact the potential of 5G before we get started. It’s time for policymakers to work more closely with stakeholders to enable more timely, fair and effective awards,” GSMA head of spectrum Brett Tarnutzer said.

“This is a crucial time in the development of 5G. Spectrum is an essential to fuel for mobile networks and its ineffective use will only lead to bad consequences for consumers. The most important objective of awarding frequencies should not be about making the most money, but rather about ensuring consumers benefit from the best mobile connectivity.”