New GSMA study reveals spectrum ‘set-asides’ have no impact on mobile private network adoption

Research reveals that spectrum carve-outs for private network use can reduce consumer download speeds by almost 25% whilst delivering no positive uplift for businesses

London: Decisions by regulators to set aside spectrum for private networks have no quantifiable impact on the adoption of private networks for businesses but can damage consumer network speeds by almost 25%, new research by the GSMA has revealed today.
A new analysis paper by economists at GSMA Intelligence ‘The Impact of Spectrum SetAsides on Private and Public Mobile Networks’, examines the impact that reserving dedicated spectrum bands for use by private networks has on the adoption of these networks and their role in delivering industrial connectivity.
Setting aside dedicated spectrum for enterprises has been seen as a way of incentivising private network adoption and digitalisation. However, such set-aside schemes also reduce the amount of spectrum available for public networks, restricting speeds and raising infrastructure and operation costs. These spectrum constraints can see consumers receive lower quality of service, higher costs, or both.
Today’s research by GSMAi is the first of its kind to apply robust statistical analysis to the impact of spectrum set-asides. The clear conclusion is that there is no indication of spectrum set-asides accelerating the digitalisation of enterprises – either through the adoption of private networks or through benefitting IoT connectivity.
Luciana Camargos, Head of Spectrum for the GSMA, said: “Regulators can sometimes feel pressured to reserve spectrum specifically for industrial and IoT private networks, believing that to do so will boost national digital economies. But our analysis shows that doing so can actually damage consumers’ download speeds whilst providing zero benefit for businesses. Put simply, the figures clearly show that the policy isn’t worth it. “We therefore advise caution in using spectrum set-asides as a mechanism for encouraging industrial connectivity. Set-asides for enterprises may not be the most economically efficient means of benefitting enterprise digitalisation when compared to the other options available. Alternative spectrum options should be considered and prioritised in the first instance.” The lack of association between set-asides and the adoption of private networks can be explained by the availability of less intrusive alternatives for spectrum access. Enterprises can access complete private network solutions (including spectrum) from public mobile network operators or utilise sharing frameworks and spectrum leasing. Similarly, the lack of impact seen on IoT adoption in the study indicates that set-asides do not enhance the ability of enterprises to access these services beyond that which alternative spectrum access modes offer. Examining the other side of the trade-off, however, the analysis finds that the amount of spectrum available to public mobile networks does impact network quality and customer experience. An additional 100 MHz of spectrum was associated with download speeds that are 24% higher (equivalent to 4.5 Mbps in terms of average global download speeds between 2014 and 2022). A set-aside amount of 100 MHz can therefore have a substantial negative impact on consumers and enterprises using public networks. As the quality and cost of public mobile networks impacts economic growth, a clear cost emerges to choosing such set-aside schemes.
Offering set-aside spectrum at reduced or no cost can also distort the market for digital solutions and infrastructure. Pricing spectrum differently depending on whether it is used by public or private networks impacts the relative cost of each solution. This means that the use of private networks with set-aside spectrum is effectively subsidised and leads to economic inefficiency.