Plum was a member of an ITU team that advised the NBTC, Thailand on spectrum valuation methodology, derived spectrum values and advised on reserve prices for the 900 MHz and 1800 MHz bands.
Reserve prices provide starting prices for different lots in an auction and so they are not an estimate of the value that might be achieved by an auction. There is an inherent degree of uncertainty over the expected value of the spectrum because this is determined by biddersâ expectations of markets and regulation over the next 15-20 years. Reserve prices should therefore be set below the expected value; otherwise potential bidders may be deterred from entering the auction (and so reduce competition in the auction) and spectrum may be left unsold. If spectrum is left unsold significant societal and consumer benefits will be foregone.
Plum used a variety of methods to derive estimates of spectrum value:
- Benchmark analysis of the results of similar auctions held internationally;
- Econometric analysis of international auction results;
- Cost reduction modelling; and
- Full enterprise value modelling
Taking into account the results of the analysis, Plum provided recommendations for the reserve prices for the 900 and 1800 MHz bands.