Monday, September 26, 2011

Italian 4G Spectrum "auctions"

News reports that Italy has raised 2.6B euros for the sale of its 800 MHz spectrm (digital dividend) with only three of the four existing operators being successful. The auctions for some remaining 1800 GHz and 200 Ghz along with all the 2.6 GHz will resume this week.

In bidding to Friday the 2.6 GHz has raised under 500 million euros. The relativity between the two bands woon't really be known until the auction completes.

For comparison to the French auction the population of Italy is 60 million.

The Italian and French prices should be comparable, but, as an analysis of all European auctions notes

Attempting to make sense of these results requires the consideration of a great many factors. The timing of the auctions is important as some occurred before the start of the on-going financial crisis. The licence conditions attached to the spectrum, such as coverage requirement, should also be considered. These vary from regulator to regulator and the more onerous the coverage requirements, for example, the less valuable the spectrum.

Despite a reasonable number of 2.6GHz auctions having taken place, it is almost impossible to draw any firm conclusions, especially as the design of each auction is also subtly different. This can have a major impact on participant’s bidding strategies and ultimately the price paid. As a result, for any operator facing a 2.6GHz auction, little conclusive insight can be drawn from the results of the 2.6GHz spectrum auctions to date. Therefore in order to prepare for an auction a country, operator and auction specific business case will be required to value the spectrum and to allow the operator to bid with confidence.

Bizarrely the author still asserts "the final price paid in an efficient auction will be determined by relative levels of spectrum supply and demand"

Novae Meridianae Demetae Dexter delenda est

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