Assessing the Economic Value of Spectrum

Project executed on behalf of Portuguese Autoridade Nacional de Comunicações (ANACOM)

Project Objective

The Autoridade Nacional de Comunicações (ANACOM), the Portuguese Regulatory Authority, commissioned Axon to carry out a study on the economic value of various spectrum frequency bands that have been, or potentially could be, used for terrestrial mobile broadband services in line with the advancement of 4G and the roll out of 5G.

In particular, the study assessed the economic value of the following spectrum frequency bands:

  • Low bands: 700 MHz, 900 MHz, 1500 MHz, 1800 MHz, 2100 MHz, 2600 MHz
  • Mid bands: 3400 MHz
  • High bands: 24 GHz

Project Description

In order to quantify the economic value of each frequency band, two separate quantitative approaches were used:

  • Spectrum valuation model: used to estimate the value of spectrum to a hypothetical mobile network operator, using a discounted cashflow (DCF) approach. By its very nature, the DCF analysis is forward-looking, taking account of anticipated future market developments such as data growth, further development of 4G and roll out of 5G.
Figure 1: Methodological overview of the spectrum valuation model
  • Benchmarking analysis: reviewed prices achieved, for each frequency band, in comparable spectrum awards to date. The benchmarking analysis was based on market prices for spectrum achieved historically and so reflected bidders’ expectations at that point in time, also including their assumptions on spectrum harmonisation.


As part of the study, Axon has also sought to identify factors affecting spectrum valuation in each of the bands considered, such as data growth, spectrum scarcity and regulatory context (license duration, spectrum fees, etc.). This analysis was informed by both desk research and field research based on interviews. The interview process was extended to more than 40 stakeholders, including telecom operators, manufacturers, associations, and regulators.

Key Takeaways

Axon’s study provided ANACOM with the essential quantitative tools required to inform its regulatory decisions, including reference points for the eventual award of the relevant spectrum frequency bands.

As a follow up to this study, Axon conducted a workshop with ANACOM representatives on the perspectives and challenges of 5G, in which we discussed a number of key topics, including key features of 5G and potential use cases in different verticals.