Written in collaboration with Martyn Roetter*
Countries across the world have been releasing new spectrum for 5G deployments in millimeter-wave spectrum bands (mmWave), while others are planning to do so soon. Although a few governments have awarded mmWave spectrum via administrative processes at little or no cost to operators (Japan, Hong Kong), in most cases the procedure for licensing has involved auctions of 24 GHz, 26 GHz, 28 GHz, 37 GHz, 39 GHz or 47 GHz. The prices per MHz per PoP of mmWave auctions have been close to the reserve prices set by regulators, with two important exceptions – Thailand and the U.S.
One factor limiting high prices for these high-band auctions is the large multi-GHz amounts of bandwidth they offer. All of the typical number of up to four mobile operators in a national market can acquire 1 GHz or more of 5G-mmWave spectrum without having to compete among themselves for the same frequencies. In addition to the large blocks of bandwidth on offer, these bands’ short propagation ranges require very closely spaced base stations, or network densification, which also influences operators’ valuations of this spectrum given its higher costs of deployment. These two structural factors explain why the prices paid for mmWave spectrum are much lower than for the 3.5 GHz and other mid and lower bands.
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