Who knew ? Housing market now driven by your mobile signal

Isn’t it odd when something you can’t see let alone touch is shown to have enormous value. Perhaps electronic money in a bank account seems intangible, but you can at least convert it to real things with a process we all call “payment”. But compare this to spectrum, the electromagnetic property of the physical universe; it is certainly invisible, arguably intangible, but most definitely invaluable – but in an incredibly strange way.

I read a great article this week about how house prices are affected, and in a very positive way, by the presence of good mobile signals. So thank you to The Register for picking up on this thought provoking story.

http://www.theregister.co.uk/2014/07/30/mobile_coverage_is_the_top_thing_house_renters_look_for/

As someone who spends their time helping people put more mobile coverage in all those indoor places where it matters so much to the end-user, I just had to write a short blog about the strangeness of spectrum value. We all know the military have first call on spectrum, they get what they need for the defence of the nation – seems sensible, as long as they use it well and don’t hoard it.  So the supply of spectrum is finite, the military got first pick, and what of the rest?

There are many chunks reserved for airplanes, TV, radio, radar and civil uses, but mobile phone services are based on spectrum that cost a lot of money in licences some 10-15 years ago. It turned out that while the old adage “the meek shall inherit the earth, but not the mineral rights” feels true, we need to expand it to say “or the spectrum rights”.

So mobile operators pay for spectrum and sell mobile phone services, but what happens to people whose house value is adversely affected by the poor quality of their mobile coverage. Oddly, this creates a new spectrum buyer in town – house owners who want to buy spectrum, – not so much the rights, just the signal that lives on it.

Let’s do the maths, for every 1% of value added to a house, how much cash would it be worth to the house-owner to buy the coverage that unlocks that value. But we’re back to the original question, how do you pay for something you can’t touch or even see. I wonder how operators are going to sell it to them?

 

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Gavin Ray

Gavin Ray

Gavin heads Product and Marketing units within IPA and blogs about the shape of the industry, the ever shifting commercial landscape of telecoms and how they influence products and propositions to market. His background includes a number of years running European Network Management in Cisco, building national data backbones across Europe while in AT&T and a stint as a VC investing in and advising all kinds of Enterprise IT and Telco high growth technologies.

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