Thursday, August 26, 2010

Is there such a thing as too much mobile spectrum?

UK-based Colaego Consulting warns that a spectrum race might be dangerous for European mobile operators, though good for consumers. The reason?

New bidding for Long Term Evolution spectrum in the 2.6GHz and 700/800MHz bands will essentially be an "arms race" dictated more by competitive concerns than by actual end user demand for new services based on use of those airwaves.

European mobile operators are smart enough to remember an earlier, expensive race to acquire 3G spectrum, moves which nearly bankrupted a couple of carriers, and which proved difficult to convert into new revenues from new services.

Basically, Colaego Consulting warns that the same thing could happen again, leading to a situation where spectrum supply can outstrip capacity demands and lead to lower retail prices.

It seems unlikely any executives are unaware of that potential pitfall. As with fiber-to-customer investments, bandwidth demand looks to keep growing, so operators essentially do need to keep investing to stay in the game. New services ultimately will be created, but there seems no getting around the need for additional spectrum.

The warning is apt, but one might suspect mobile executives are well aware of the problem.

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