Spectrum below 3 GHz is in high demand with multiple stakeholders, and regulators around the world could potentially use the sub-3 GHz or even the sub-1 GHz spectrum bands as a mechanism to allow greenfield players or mobile telcos with minority market share to level the playing field between the largest and the smallest mobile telcos.
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5G Spectrum Starts to Materialize
The first comprehensive pre-commercial 5G demos will be taking place at the Korean Winter Olympics. As the hype and expectation builds, there has been considerable commentary about 5G in the 3.5 GHz to 4.2 GHz band, in the millimeter bands, 26 GHz to 28 GHz and potentially even higher bands (e.g., 39 GHz). However, a number of telcos are keen to harness the spectrum in the sub-1 GHz for 5G, although the spectrum is challenging in a number of ways. For example, in July 2017, Ofcom had hoped to release 700 MHz spectrum in addition to 40 MHz of spectrum in the 2.3 GHz band and 150 MHz of spectrum in the 3.4 GHz band. Eventually only the 2.3 GHz and 3.4 GHz band auctions would go ahead. Ofcom does believe it can release 80 MHz of spectrum in the 700 MHz band by 2020.
While UK operators were disappointed, other countries have had more success releasing 700 MHz, and even 600 MHz, for 5G.
Interest in The 600/700 MHz Bands
On the other side of the world, China’s Ministry of Industry and Information Technology has officially reserved the 3.3 GHz to 3.6 GHz and the 4.8 GHz to 5 GHz for 5G service. The Chinese regulator has stated it will release spectrum in the millimeter bands as “supplementary spectrum” for 5G services. There are indications that MIIT will also issue 700 MHz spectrum to be used by China’s tier two operators, China Unicom and China Telecom. This stance is not official but would provide a competitive leg up for China’s third mobile operator with just 23.4% market share. China Mobile takes the top spot with 51.2% market share (1H 2017). The logic goes that China Unicom would be permitted to use 700 MHz spectrum for 5G deployment. Regulators around the world could potentially use the sub-3 GHz or even the sub-1 GHz spectrum bands as a mechanism to give the minor market-share mobile telcos a boost to be able to compete with the dominant mobile telco, China Mobile.
T-Mobile USA is in a similar competitive position to China Unicom and China Telecom. In 3Q 2017, T-Mobile had 70.7 million subscriptions, which equates to 17.8% of the U.S. market. AT&T and Verizon Wireless control 72.6%. The telco intends to use its recent US$8 billion acquisition of 600 MHz spectrum at a 2017 spectrum auction to become a market disruptor in the 5G era. The recently acquired spectrum assets could be used to target massive IoT application scenarios for the smart home as well as for smart enterprise. T-Mobile has also stressed that it is interested in millimeter and 3.5 GHz CBRS spectrum, but wants to use its nationwide low spectrum assets to steal a march on its competitors in terms of 5G coverage. AT&T and Verizon Wireless will no doubt continue their efforts in M2M and IoT deployments, but they have high-profile plans to use the 28 GHz band for 5G fixed wireless access services to areas where they cannot provide fiber-optic coverage.
600/700 MHz Bands Could Complement Higher 5G Bands
The 600 MHz and 700 MHz bands clearly have significant coverage advantages over the high spectrum bands, but the 5G experience will not just be about having a “5G connection,” but also about the “data throughput”. T-Mobile may be able to use its 600 MHz spectrum coverage to claim more extensive 5G coverage, and it the spectrum may be useful for 5G IOT applications, but will not effectively support ultrafast data throughput. In the 600 MHz band, T-Mobile has an average depth of 31 MHz and at least 10 MHz covering all of the United States and Puerto Rico. A number of 5G stakeholders, including the GSA, have been advocating spectrum blocks of 100 MHz per licensee. Therefore, T-Mobile will need to pursue spectrum in the 3.5 GHz and millimeter bands. While the 600/700 MHz spectrum will not be an ace in the hole for T-Mobile, it is likely other operators around the world will be clamoring for sub-1 GHz spectrum be allocated for 5G use.