Europe moves towards increasing spectrum licence periods

Bill Boyle
Published on:

The European Commission wants to increase mobile spectrum licence periods to 25 years

In a private meeting at the recent Mobile World Congress (MWC) the CEOs of Vodafone UK and Orange, Nick Jeffery and Stéphane Richard respectively, renewed their frequent calls to regulators to come to their aid and help them boost investment after years of what they see as policies which have downgraded their ability to maximise income from the market.

The Daily Mail quoted a source as saying that while European Commissioner Andrus Ansip said he supported compromise, he was open to extending the length of airwave spectrum licences in Europe to up to 25 years from the current 10-15 years. 

The operators feel that they are being over-regulated by the relatively short spectrum licence periods they are forced to accept in Europe. Whereas in the US operators are given long licences – and in some cases are allowed almost indefinite licence duration – the EU’s 10 to 15 year rental periods do not allow them time to innovate. 

They also maintain that they are subject to a confusing patchwork of differing national rules and left in a situation where they are investing vast sums of money in next-generation networks with little certainty as to how long they have access to the spectra.

Telco leaders in the meeting called for a policy of 35-year or indefinite licence durations, as in the United States, the meeting insider said.

“But that’s a good step forward,” the source said, referring to the 25-year licensing proposal.

The regulator’s attitude to mergers was also under attack. Speaking on a panel at MWC Richard, CEO of Orange, said: “Obviously, it is easier for a company to get some return out of the huge investments that we have to make in the networks when we have credible size. It’s so obvious.” 

However, the EU regulator, and many EU countries, do not agree with this attitude and are keen to remind them that competition should continue to be the main driver of investment. In many cases internationally the regulators are not keen to let the number of telecoms companies supplying to consumers to reach less than four since a dip to two suppliers, for example, has the dangers not just of monopolisation, but of price-fixing. There is also widespread scepticism amongst consumers that any of these concessions will trickle down to them in price cuts.  

Another target for the operators at MWC was the abolition of roaming charges which while being popular with the public, will, the telcos say, reduce their revenues yet further with no obvious avenues open to them to replace the lost income. 

Ansip’s attitude to this argument at MWC was to say that he was open to allowing cross-border mergers but, “consolidation within national markets was more tricky”.

Ansip also had words of warning for carriers and operators on the rollout of 5G: “When 4G came along, Europe was slow to push ahead. We do not want to make the same mistake with 5G. That is why we have set a clear timetable to keep the EU ahead of the race. We aim for fast movers to start 5G trials in selected areas in 2018, then coordinated commercial deployment of advanced 5G networks from 2020.”

He continued: “We want to avoid global fragmentation, or interoperability gaps where people’s mobile connections become patchy when they travel overseas. So we should avoid short-term decisions and early choices that could set a 5G standard in stone and make it hard to change later.

“That kind of commercial-based pressure is something that the world’s emerging 5G community does not need. What we need is a common understanding between countries and regions. I know it may take a little longer to reach a consensus. But it is worth the effort for the global market reach. This is why global coordination is so important at this stage of developing 5G standards.”[]