This report by economists at GSMA Intelligence examines the impact that spectrum set-asides for use by private networks has on the adoption of these networks and their role in delivering industrial connectivity.
The headline research shows that that spectrum carve-outs for private network use can reduce consumer download speeds by almost 25% whilst delivering no positive uplift for businesses.
Setting aside dedicated spectrum for enterprises has been seen as a way of incentivising private network adoption and digitalisation. However, such set-aside schemes also reduce the amount of spectrum available for public networks, restricting speeds and raising infrastructure and operation costs. These spectrum constraints can see consumers receive lower quality of service, higher costs, or both.
This research by GSMA Intelligence is the first of its kind to apply robust statistical analysis to the impact of spectrum set-asides. The clear conclusion is that there is no indication of spectrum set-asides accelerating the digitalisation of enterprises – either through the adoption of private networks or through benefitting IoT connectivity.
The lack of association between set-asides and the adoption of private networks can be explained by the availability of less intrusive alternatives for spectrum access. Enterprises can access complete private network solutions (including spectrum) from public mobile network operators or utilise sharing frameworks and spectrum leasing. Similarly, the lack of impact seen on IoT adoption in the study indicates that set-asides do not enhance the ability of enterprises to access these services beyond that which alternative spectrum access modes offer.
Offering set-aside spectrum at reduced or no cost can also distort the market for digital solutions and infrastructure. Pricing spectrum differently depending on whether it is used by public or private networks impacts the relative cost of each solution. This means that the use of private networks with set-aside spectrum is effectively subsidised and leads to economic inefficiency.
More resources:
- Press Release
- LinkedIn Live Session Recording
- GSMA Intelligence slides for LinkedIn Live
- Further Slides from the LinkedIn Live
The Impact of Spectrum Set-Asides on 5G
This report analyses the potential approaches available to regulators for spectrum set-asides. Through five country case studies it also demonstrates the wider impact of these approaches, especially on mobile markets.
Main findings on set-asides
Importantly, the report analysis shows that caution has to be taken when making long-term decisions on spectrum assignments and highlights that market-driven approaches that foster cooperative solutions can bring the best outcome for spectrum users and consumers alike. Regulators and governments need to consider that:
- Set-asides carry significant risks to the economy
- Spectrum sharing frameworks are complex and carry risks on certainty of tenure and access
- Well-designed licence conditions for mobile are least intrusive and stimulate cooperation
- Interest is mainly driven by properties of the spectrum band rather than the licensing mechanism
The Impact of Spectrum Set-Asides on 5G
Case Studies
