In Business Model, Internet Access, Mobile, News, Spectrum, Spectrum Futures Conference

Telenor Group says it will not participate in the spectrum auction in India in 2016. That might, under some circumstances, seem an odd or dangerous decision, based on Telenor India’s lack of spectrum covering the whole of India, where the leading mobile carriers mostly already have pan-India coverage.

But spectrum purchases are like any other capital investment a mobile operator makes, a calculated decision based on business strategy. In this case, observers speculate that Telenor has made a decision to exit the India market, reason enough not to acquire new spectrum.

In other cases, firms might decide not to bid because they already have enough spectrum for immediate needs (Sprint in the U.S. market provides an example), or because other options are available.

In some cases, where capital is available, and regulatory conditions permit, one firm can buy another, acquiring spectrum assets by acquisition.

Occasionally, other options might exist, such as expected additional spectrum assets becoming available, through additional auctions, by using offload mechanisms more fully, by redesigning networks or even activating licensed spectrum that has, for one reason or another, not yet been deployed.

One big strategic shift, in some markets, is an expectation that vast new quantities of spectrum–in the millimeter wave region–will be coming to market on a time frame suitable to waiting. That might be a bigger factor in the U.S. market, for example.

The Federal Communications Commission already is moving to release a huge amount of new spectrum, partly to support 5G, partly to support more unlicensed access, of 29 GHz worth of spectrum, including 11 GHz at first, with seven gigaHertz of new unlicensed spectrum being made available.

That vast increase in supply should have the effect of lessening the value of licensed spectrum–intended or not–and making new options available for use of unlicensed spectrum for access.

Cellular Operators Association of India Head Rajan Mathews is expected to discuss mobile operator spectrum strategy an issues at Spectrum Futures in Singapore, Oct. 20-21, 2016.

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