Spectrum portfolios in a 5G world

Deloitte Technology, Media and Telecommunications (TMT) Industry team recently released the Spectrum portfolios in a 5G world. This report mainly demonstrates the importance of proper valuation of spectrum portfolios in a 5G world. We hope it will help wireless service providers (WSPs), financial community and policymakers understand and maximize spectrum portfolios value, and provide benefits for their decisions of adjusting strategies, business models, and policies. The following is a summary of the report:

Why spectrum portfolios matter.
Proper valuation will enable WSPs that can identify, build, and leverage a strategically valuable spectrum portfolio to create new financing opportunities. Spectrum asset-based financing can fund network innovation, while lowering WSPs’ capital costs by funding select, strategic spectrum investments.

What drives spectrum value?

  • Employing more spectrum yields lower network costs for the same network capacity.
  • Larger blocks of contiguous spectrum are more efficient than an equal amount of fragmented spectrum.
  • A combination of lower- and higher-frequency spectrum is necessary to effectively and efficiently provide both coverage and capacity.
  • Holding unused spectrum allows faster, more economic migration to new network technologies such as 4G and 5G without requiring complex and time-consuming spectrum clearing techniques that may impact the customer experience.

New ownership paradigms, new spectrum.
As complex as the effort to value spectrum portfolios is today, further developments—notably, the introduction of spectrum sharing and access to a large amount of higher-frequency spectrum—are on the horizon and will only make the process more complicated.

Spectrum value in a 5G world.
Spectrum is no longer a static asset. Its value increases and decreases dynamically, as technologies, portfolios, regulations, and market conditions change. As the industry prepares for the shift to 5G, valuing it properly has never been more important. Understanding the relationships between spectrum holdings, technology advances, and deployment strategies in the context of the fast-changing competitive landscape in which WSPs operate will give deeper insight into how their spectrum portfolio strategies will impact their overall enterprise value.

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