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GSMA Report Reveals Licensed Spectrum For Mobile Offers Best Possible Economic Benefit

- Spectrum Sharing Agreements for Mobile Broadband Should Not Replace the Need for Exclusive Spectrum Licensing

LONDON, Feb. 11, 2014 /PRNewswire/ -- The GSMA today issued a new report indicating that shared spectrum can complement but in no way replaces the need for exclusive-access spectrum in the provision of mobile broadband. The report, "The Impacts of Licensed Shared Use of Spectrum", developed by Deloitte, highlights how strict limitations associated with Licensed Shared Access (LSA)(1) spectrum agreements - such as shorter terms, build obligations, lack of certainty and small allocations - can significantly reduce the likelihood of a mobile operator to invest. This means that the potential economic benefits derived from spectrum sharing are ultimately lower than those achieved through exclusive-access spectrum.

"The GSMA commends efforts by regulators around the world to rapidly find a solution for the current spectrum crunch," said Tom Phillips, Chief Regulatory Officer, GSMA. "While sharing schemes could provide a complementary approach to ease rapidly growing demand for spectrum, exclusive access to spectrum for mobile use is the optimal regulatory approach, providing the necessary market certainty to stimulate investments in networks and services."

The report is based on a model that assesses the prospective value of two potential Licensed Shared Access scenarios: the release of 50MHz in the European Union in the 2.3GHz band from 2020 and of 100MHz in the 3.5GHz band in the United States from 2016. The many variables involved and the additional risks, complexities and uncertainties involved with spectrum sharing mean that each sharing opportunity should ideally be evaluated on a case by case basis, making a generalised approach impossible. Findings from the report include:

European Union:

  • Exclusive licensed spectrum in the 2.3GHz band could add €86 billion (US $116 billion) to the EU's economy in the period 2016-2030.
  • Shared licensing could sharply reduce economic benefits to €70 billion (US $95 billion) or as low as €5 billion (US $6.7 billion), due to a lack of common approach in spectrum allocation across the Member States, combined with significant geographic and timing exclusions as well as potential contracting limitations.

United States:

  • For the same time period, exclusive spectrum licensing in the 3.5GHz band would add US $260 billion (€192 billion) to the US economy.
  • In the case that sharing terms strictly limit the use of spectrum by mobile operators, this value would be sharply reduced to US $210 billion (€155 billion) or as little as US $7 billion (€5 billion).

The report is released amidst continued rapid growth in mobile traffic and consumer demand for smartphones, tablets and other devices that provide access to communications and information services. The study further finds that the release of exclusive-access spectrum for mobile broadband offers wider socio-economic benefits for the United States and European Union over the period 2016-2030, including future job creation. It is estimated that the deployment of mobile broadband would generate approximately 2.1 million jobs in the US and nearly 1.6 million jobs in the EU across this period.

"Spectrum is the lifeblood of the mobile industry. To attract investment and reap the full economic benefits of mobile broadband, regulators need to provide access to a critical mass of spectrum," continued Phillips. "For the EU and US, this can be achieved through the harmonisation of bands, on similar contractual terms and conditions, as well as limited geographic and timing exclusions. For these reasons, shared spectrum is not a substitute for exclusive-access spectrum, and governments and regulators should not fully rely on shared spectrum for the provision of mobile broadband in the future."

To access the report please visit: http://www.gsma.com/spectrum/the-impact-of-licensed-shared-use-of-spectrum/

Note to Editors
(1) The report defines Licensed Shared Access as an individual licensed regime of a limited number of licensees in a frequency band, already allocated to one or more incumbent users. This type of spectrum sharing model involves a "vertical" sector, such as the military or broadcasters, selling, leasing or otherwise providing access to its underutilised licensed spectrum to a mobile operator in areas or at times when it is not being used.

About the GSMA
The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world's mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.

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