Assessment of spectrum value: The case of a second digital dividend in Europe

This work assesses the perceived value of 700 MHz according to the impact that this spectrum could have in decreasing rollout costs. 700 MHz spectrum, recently allocated to mobile network operators (MNOs), could help increase coverage in rural area, as well as aid capacity-constrained networks. In both cases, the use of this spectrum could reduce the rollout costs of a Radio Access Network (RAN) based on Long Term Evolution (LTE) technology. The perceived value of 700 MHz is presented in this article as the difference in the Total Cost of Ownership (TCO) of deploying the network with and without this spectrum. However, the rollout costs can differ greatly among MNOs if they previously hold different spectrum portfolios that may or may not include sub-1 GHz frequencies. The results of this study reveal that an MNO not holding the additional 2×10 MHz at 800 MHz, would perceive 62% more value of 2×10 MHz at 700 MHz, than an MNO that does hold 2×10 MHz at 800 MHz. In addition, the value of this spectrum comes largely from urban areas, where networks are strongly capacity-constrained. This leads to the conclusion that under current demand forecasts, low-frequency spectrum starts being more valuable for simply being spectrum, rather than for being low frequency. Indeed, the results prove that adding spectrum with similar propagation characteristics to a coverage-constrained network is of no value.