Investment timeframes and spectrum licensing: licensees look to minimize their spectrum risks

Communications regulation Licensing Mobile telecommunications Digital communications Radio broadcasting Spectrum management framework
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Regulators around the world are looking for ways to maintain flexibility in radiocommunications licensing while giving investors some certainty about spectrum tenure. One of the issues raised in this context is the duration of licenses. All things being equal, a longer license provides more certainty. However, there are many other factors that affect the investment risk associated with a radiocommunications license.

In this report, we examine a series of case studies of issuance and re-issuance of radiocommunications licenses to understand what creates investment risk, what mitigates it, and how license duration affects risk. We also look at newer approaches to spectrum tenure such as indefinite terms and unlicensed spectrum.

These case studies will be of interest to regulators and operators who are working on radiocommunications reform, and trying to understand the mechanisms of investment risk in a radiocommunications context. These will include established operators looking at long-term investments, but also new entrants who are taking risks with innovation and wish to minimize the sunk costs of a radiocommunications license.

This report was commissioned by Swinburne University as part of an Australian Research Council funded Discovery Project designed to explore new ways of conceptualizing and undertaking spectrum management. See Appendix for further details.

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