In Business Model, Internet Access, Mobile, Spectrum

The cost of spectrum always matters for mobile operators in competitive markets. Prices of 5G spectrum in Italy, an outlier so far, were driven by a new competitor eager to get into the market. In that scenario, high prices are unwelcome, but the cost of breaking into the market at scale. Spectrum auctions in most other countries have been more restrained.

If supply and demand continues to operate, spectrum prices should fall. First, the huge amount of new spectrum vastly increases supply, which should drive prices down. Also, mobile operators in some markets seem not to believe new incremental revenues are possible. That dampens appetite for paying higher prices.

source: Light Reading

To make an analogy, spectrum is beachfront property, but we are making more beach.

Over the past few years, some have worried about the cost of 5G spectrum, although spectrum prices are dropping, generally speaking, in part because there is a huge increase in supply, and because mobile operators must now more carefully weigh the cost of new spectrum against expected financial return.  But spectrum prices were dropping even before the recent 5G auctions.

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