As essential as licensed spectrum might be for mobile operators, price and quantity still matter, as does the existing amount of spectrum any contestant already has in its possession. In addition, the strategic context also matters.
At least in some markets, planned releases of huge amounts of new spectrum, plus possible sales of surplus spectrum, and use of unlicensed spectrum, now are viewed as viable alternatives--longer term--to acquiring new licensed spectrum at current prices.
In other words, many competitors, in some markets, now might be less willing to pay high prices for 4G or 5G spectrum.
Consider a recent Egyptian government offer to license 4G spectrum available in 2.5-MHz and 5-MHz blocks.
None of the three other Egyptian mobile operators placed a bid, suggesting both that the price was too high, and the amount of spectrum too low.
Vodafone Egypt Telecommunications, Orange Egypt and Etisalat Misr all have twice declined to submit bids.
Only Telecom Egypt, the state-run fixed-line monopoly, did buy a 4G license, purchased to allow it to enter the mobile market for the first time. As a challenger, Telecom Egypt arguably was willing to pay more than the other leading carriers, for a smaller spectrum allocation than would be needed if it is successful, for several reasons.
First, without spectrum it could not enter the market as a facilities-based provider. Also, if Telecom Egypt believes it will have a smaller customer base, then the smaller spectrum allocation might work, for a time.
The GSMA has called for boosting the amount of spectrum available, arguing that the total amount of spectrum assigned to each operator for 4G needs to be in the range of 2x30MHz to 2x60MHz, across a range of coverage and capacity bands, with a minimum contiguous bandwidth of 2x10MHz in each band.
In contrast, only 2×2.5MHz to 2x5MHz were proposed to mobile operators by the Egyptian authorities.
GSMA also argues that the proposed prices were too high as well.
The National Telecom Regulatory Authority now says it will consider options for offering the new licenses to new international operators.
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