This study assessed the alternative use value – primarily for mobile services – of sub-1 GHz spectrum in the ITU Region 1 (Europe, Central Asia, the Middle East and Africa). The study focusses primarily on the 700 MHz band, which is currently allocated to broadcasting in ITU Region 1. It estimated the benefits of an additional 2×30 MHz of 700 MHz spectrum for mobile in Europe, and of an additional 2×30 MHz of 700 MHz/800 MHz in the Middle East and North Africa (MENA) and Sub-Saharan Africa (SSA) for mobile. The study then assessed potential uses for the centre gap spectrum.
The potential benefits from using additional spectrum for mobile broadband services arise from the increased capacity and/or improved coverage that may be achieved. In those areas where demand for mobile services is likely to outstrip supply, additional spectrum allows operators to defer or avoid the costs of additional network deployment required to meet demand. Moreover, the release of 700 MHz spectrum can improve the coverage of mobile broadband services, due to its good propagation characteristics.
We assess these benefits by dividing Region 1 according to whether the primary benefit of additional 700 MHz/800 MHz spectrum is likely to be capacity or coverage. In Europe, the prior use of 800 MHz spectrum means that the primary benefit is likely to be an increase in capacity. Conversely, in parts of MENA and SSA use of 700 MHz/800 MHz for mobile could provide substantial improvements in coverage.
For Europe, we develop a novel model – the iterative cost model – that uses a ‘bootstrap’ approach to equilibrate user demand for data and network capacity. In the model, the traffic level is endogenously determined once we have made assumptions about by users’ mobile broadband data expenditure and the operator cost per GB. Additional spectrum lowers the cost of supplying data, thereby enabling additional data traffic (and the associated economic and societal benefits). This approach has two main advantages – firstly, it makes the model substantially less sensitive to changes of the technical inputs, and secondly, it eliminates dependence on third party traffic forecasts.
In MENA and SSA, we use a different methodology to estimate the coverage benefits 700 MHz/800 MHz will bring. We estimate the increased overage and combine this with demographic and economic trends to estimate how many additional potential users will receive mobile broadband coverage following the release of the spectrum. We estimate a willingness to pay for mobile broadband for an individual user and then multiply this by the number of additional potential users, given different affordability and literacy constraints in these regions.
The report estimated that the release of 2×30 MHz of 700 MHz or 800 MHz spectrum in 2020 could result in an overall benefit of nearly €100bn for the whole of Region 1. Roughly three quarters of the benefit is seen in MENA and SSA, where the release of 700 MHz/800 MHz spectrum could yield substantial coverage benefits. In Europe, where larger quantities of spectrum are expected to be released by 2020, the benefits are smaller (but still significant).
Finally, potential uses for the remaining spectrum are qualitatively assessed. The options include the use of the remaining spectrum for mobile broadband, wireless microphones, machine-to-machine communications or TV broadcasting. The two main candidate uses of the centre gap are additional spectrum for mobile broadband for either commercial or government use, although further technical work is required to determine whether use of the centre gap by professional wireless microphones is feasible.