Research Notes

Will the digital dividend auctions result in mobile broadband expanding as fast as the EU and the regulative authorities in many countries believe?

– Strand Consult’s research says most definitely not!

Many countries are currently in the process of auctioning the digital dividend frequencies. These are the 700-800 MHz frequencies that will be primarily used to deliver mobile broadband to rural areas – thinly populated areas in the country where it is currently often difficult to access mobile broadband.

Strand Consult has been analysing this area for a longer period of time. We believe that an important factor that can have a significant impact on future society has been overseen in connection with both the auctions that have already been held and the upcoming auctions.

We have analysed and describe this issue in a number of reports and analyses and in our opinion, the expectations for the speed and coverage conditions that mobile operators must meet when acquiring these new frequencies are simply unrealistic.

When a mobile operator needs to erect a mobile mast, it requires a good deal of preparation, radio planning, signing rental agreements and acquiring the necessary permissions. All this can easily take between 12 and 24 months and cost a mobile operator between 100- and 200,000 Euro. In other words creating the mobile coverage that these new frequencies are meant to give the inhabitants of rural areas is a long, costly and tedious process.

During our research we have examined the market for renting sites for the erection of mobile masts. We discovered that neither the EU nor the governments in most countries actually know how this market is currently functioning and the challenges that mobile operators are battling against to create and expand mobile coverage. On the contrary, many politicians and regulative authorities currently believe that creating and expanding mobile coverage is an easy and straightforward task.

In our new report mobile operators can reduce cost for mobile masts and improve their regulation we have described in detail the challenges the mobile industry is currently facing. These are not small challenges or individual issues that one or two local mobile operators are facing, but large and very real problems that all mobile operators face when trying to find and rent suitable locations to place mobile masts, applying for the necessary permissions and trying to negotiate reasonable rental prices in the short, medium and long term.

Based on our research we have no doubt that many mobile operators around the world will have great difficulty in meeting the network expansion demands that are connected to the mobile frequencies they are currently purchasing. We have no doubt that the results of these challenges will be that some inhabitants will not receive the mobile broadband coverage they were promised on time.

Strand Consult has already participated in a close dialogue with the Danish authorities about this issue, resulting in Denmark most probably being the very first country where the political system will address the challenges that mobile operators are daily battling against, when trying to receive permission and rent locations to erect new mobile masts.

Our new report How mobile operators can reduce cost for mobile masts and improve mast regulation has helped make these challenges far more transparent. The report uses knowledge and cases to illustrate these challenges that are not only affecting mobile operators, but also influencing modern society. Based on our research, Strand Consult can now contribute innovative suggestions on how to optimise this market and thereby help rural inhabitants that are still waiting for access to mobile broadband.

This report has in just a few months changed the market conditions for the Danish mobile operators. The report has been used in a close dialogue with a number of Danish politicians, the Danish regulative authorities, the Danish competition authorities, the Danish mobile operators and some of the advisers that are currently working in the Danish mobile industry. We have therefore no doubt at all that our report mobile operators can reduce cost for mobile masts and improve their regulation is an extremely good tool to help optimise this part of the mobile market value chain. Our report collects and structures a great deal of knowledge across the value chain and will save customers in the mobile industry a great deal of time if they want to optimise their business strategies in this area.

Strand Consult has no doubt that both society and the mobile industry are currently facing enormous challenges. The prerequisite of solving these challenges is to create a common frame of reference, agree on the factors that are currently making it difficult and very expensive to establish and expand mobile broadband coverage and then initiate a close and serious dialogue with the various parties involved. As we are now seeing in Denmark, this will result in making it far quicker and easier to ensure all citizens access to quality mobile network access in the future.

To receive more information about our new unique report and the results that a number of mobile operators have already gained with help from the report, please do not hesitate to contact us.
More information:
How mobile operators can reduce cost for mobile masts and improve mast regulationStrand Consults Strategic Workshops

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