The economic value of radio frequency spectrum used by mobile phones will almost double over the next 10 years as a result of smartphone and super-fast broadband use, says a report to be published today (20 June).
The findings, produced by Plum Consulting for GSMA, the global mobile operators group, were welcomed by the European Commission as bolstering its plans to introduce better coordination of spectrum in its forthcoming Single Market for Telecoms initiative.
The report, called ‘Valuing the Use of Spectrum in the EU’, reveals that mobile’s use of spectrum currently contributes €269 billion to the economies of the EU’s 27 states, far more than any other use of spectrum, such as wireless local area networks and terrestrial broadcasting.
The report finds that the economic value of spectrum for mobile services will increase dramatically over the next 10 years, while many other applications will see far lower rates of growth or even declines in value.
Smartphone use surges
Increasing consumer use of smartphones, the growth of fourth-generation (4G) mobile networks and a proliferation of internet-connected appliances are predicted to drive the economic value of mobile use of spectrum to €477 billion by 2023.
The majority of other spectrum applications, such as civil aviation and satellite communications, will see more modest growth, according to the report.
Meanwhile it claims that the economic value of terrestrial TV and radio broadcast is predicted to decline from €48 billion in 2013 to €25 billion by 2023, as consumers move to paid-for satellite and cable platforms, as well as internet television and radio.
The projected bonanza in mobile depends on the development of EU-wide spectrum policy, however, and the findings were welcomed by the Neelie Kroes, commissioner for the digital agenda.
A proposal for a telecommunications single market – including spectrum policy – will be put before EU leaders in October, but the European Commission is now racing to prepare drafts before the end of June so that it can complete an inter-service consultation before the ideas are agreed by the Commission in September.
Bowl of spaghetti
In a speech to Barcelona’s Global Mobile Congress on 26 February, Kroes said the 27 EU states needed to align their approach on mobile spectrum and fibre broadband, creating a genuine single market.
Kroes described Europe’s poor efforts to release broadband spectrum as resembling “a bowl of spaghetti”.
The proposals on spectrum harmonisation will be controversial, since France, Germany and Britain are amongst those which oppose ceding control of spectrum auctions that bring billions into public coffers. Spectrum is often classed by member states as a matter of national security, and therefore off-limits to the EU executive.
EURACTIV understands that the Commission’s current proposals would earmark spectrum frequencies to be opened up to the markets, and set time periods within which auctions for licences must take place, also setting limits for the duration of the licences.
Kroes calls for spectrum alignment
This would see auctions for spectrum take place over similar time periods and give bidding companies more certainty where they wished to bid in several member states. Member states would still keep the proceeds to the auctions, however.
"We've known for a long time that mobile and wireless communications are a highly valuable use of spectrum. They contribute significantly to productivity, growth and employment, not to mention their social value. With the expansion of 4G and the Internet of Things this trend will only increase,” Kroes told EURACTIV in reaction to the report.
“It is therefore essential that we align Europe's spectrum policies with this reality, and that we coordinate spectrum better across the EU's member states. This the philosophy behind the single market package the European Commission will adopt in early September," she added.
“Spectrum is an essential resource and governments play a critical role in ensuring that those receiving licences deliver services that will enhance the lives of consumers, create new business opportunities and drive economic growth in Europe,” said Tom Phillips, chief government and regulatory affairs officer at GSMA.
“In this regard, governments face a tough choice and must turn to solid economic analysis to guide their decisions. This report clearly shows that mobile services contribute far more than any other application, now and over the long term. In times of economic downturn and budget cuts at the European and Member State level, it is particularly important to support mobile’s unique impact on Europe’s economy.”
Radio frequency spectrum is a limited part of the electromagnetic spectrum as a whole, but it is extremely important due to its capacity to carry codified messages. This makes it an essential resource for telecommunication services such as mobile telephones, TV and radio broadcasting, satellite and broadband communications.
The EU has authorised 1,200 megahertz of spectrum for wireless broadband, but on average European member states have only granted 65% of it.
The allocation of spectrum has been marked by intense debate between member states on which services should be prioritised and how countries can conduct spectrum auctions around the same time to make sure the roll out does not create an uneven playing field.
- By end of June 2013: Draft rules on single market for telecommunications including provisions on spectrum expected to circulate
- European Commission:Radio Spectrum Policy Programme
Industry federations and trade unions
- European Telecoms and Network Operators (ETNO): Website
European Business Summit 2013: Unlocking Industrial Opportunities - An EU Strategy for Competitiveness