Friday, December 20, 2019

Spectrum Prices are Hard to Evaluate, Using Traditional MHz-POP Metrics

Spectrum prices might be a bit hard to evaluate using the traditional dollars per MHz per potential user, in part because the amounts of spectrum are so much greater for millimeter wave auctions. Where low-band spectrum with much more limited capacity once sold for prices above $1 per MHz POP, millimeter wave spectrum appears so far to be selling for $.01 per MHz POP, and should cost even less, on a MHz-POP basis, as frequency increases.

The reason is that higher frequencies feature much-greater capacity (orders of magnitude more MHz per POP). As with any business or consumer budget, there is only so much money to spend on any particular product. 

As consumers now pay between $40 and $80 for internet access for hundreds of megabits per second, where they once paid the same amounts for a few megabits per second, so too mobile service providers can only afford to pay so much for new blocks of spectrum.

So prices will fall, on a price per MegaHertz per POP basis.


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