Spectrum strategy support
Project experience | Spectrum
The telecoms regulator of a Western European country decided to auction expiring GSM licences in the 900MHz and 1800MHz bands, alongside additional spectrum in these bands and the digital dividend (800MHz band) in a multi-band combinatorial clock auction that would shape the mobile industry for the next 20 years. Our client, an established fixed-mobile operator in the market, needed to understand spectrum requirements and related valuations for a successful execution of its long-term strategy and business plan.
We provided spectrum strategy support and spectrum value modelling to our client in preparation for the combined award of 800MHz, 900MHz and 1800MHz spectrum.
As part of the project, we developed a spectrum valuation model calculating the change in enterprise value with respect to different levels of spectrum being available, by taking into account:
- how different spectrum holdings translate to different LTE radio access network capabilities and requirements, which required a particularly complex modelling of the access network being able to manage effectively three technologies (2G, 3G and 4G) and five different frequency bands (800MHz, 900MHz, 1800MHz, 2100MHz and 2600MHz)
- the different network roll-out, refarming and migration strategies that might be followed in different spectrum scenarios
- the network-sharing agreement between the operator and a competing operator in the market
- the value of spectrum for the fixed business in terms of residential FMC propositions, fixed business customers and potential partial replacement of the rural copper network.
Analysys Mason valued all possible packages of spectrum for our client as well as for competitors, which is of great importance for developing a coherent bidding strategy.
We held several workshops with key stakeholders within the strategy, network and commercial departments to discuss the main inputs of the model, and presented methodology and outputs of the valuation exercise to senior management, the steering committee and the board of directors.
Our valuations were used as a basis for the development of a sound bid strategy, which allowed out client to successfully acquire the desired spectrum during the auction at a price comparable to that of the other winning bidders.