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Introduction

This report includes case studies of issuance and reissuance of radiocommunications licenses to understand what creates investment risk, what mitigates it, and how license duration affects risk.

Highlights

  • There is no strong correlation between license duration and asset operating lives. We find little evidence that the operating life of assets or the durability of service demand drives the duration of radiocommunications licenses.
  • Licensing risk is multivariate. The duration of a radiocommunications license is one source of risk, but it can be mitigated by renewal conditions and by maintaining technical and commercial alternatives.
  • Traditional licensing approaches do not suit some innovators and new technologies. The emergence of new approaches to spectrum management such as indefinite terms and unlicensed spectrum can reduce risk for certain kinds of investors, innovators, and technologies.

Features and Benefits

  • Assesses a series of spectrum license renewal case studies.
  • Evaluates the importance of license duration as a source of regulatory risk.
  • Analyzes alternatives to traditional spectrum licensing approaches.

Key questions answered

  • What are typical investment timeframes for different classes of telecommunications asset?
  • Have these investment timeframes changed since the 1980s?
  • How important is the duration of spectrum licenses as a source of risk?
  • What can operators and regulators do to minimize risk associated with spectrum?

Table of contents

Summary

  • Catalyst
  • Ovum view
  • Key messages

Recommendations

  • Recommendations for radiocommunications licensees
  • Recommendations for regulators

Risk management is key to radiocommunications licensing

  • Multiple sources of risk in radiocommunications investment
  • Operating life for assets has been stable

Investment incentives affected by many kinds of licensing

  • Submarine landing rights
  • Carrier immunities

Case studies of radiocommunications investment

  • Satellite services in the C band, 2015
  • The 2.3GHz band in Australia, 1994–2015
  • 800/900MHz mobile licenses in Hong Kong, 2004
  • The 850MHz band in Australia, 1993–2015
  • The 800/900MHz band in New Zealand, 2010
  • The 28GHz band in the UK, 2000–10
  • Key observations

Unlicensed spectrum expands user options

  • New technologies drive new approaches to spectrum management
  • Unlicensed spectrum expands options for spectrum access

Appendix

  • Methodology
  • Author
  • Acknowledgement
  • Swinburne University contact

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