Incentives for the key stakeholders in the hybrid use of the UHF broadcasting spectrum utilizing Supplemental Downlink: A dynamic capabilities view Seppo Yrjölä 1 , Petri Ahokangas 2 , Marja Matinmikko 3 , Pekka Talmola 4 , Abstract—This paper investigates key stakeholders’ incentives for the hybrid use of the Ultra High Frequency (UHF) spectrum for broadcasting and mobile broadband using novel Supplemental Downlink (SDL) Carrier Aggregation (CA) technique from the dynamic capabilities perspective of strategic management. So far broadcaster (BC) community has lacked true incentives for sharing the spectrum they currently use and have seen sharing only as unilateral repurposing act from regulatory bodies and Mobile Network Operators (MNO). In this paper we focus on key stakeholders capability to deal with combined internal and external resources and capabilities in doing business, refered as Dynamic Capability (DC). Spectrum sharing introducing a rapid change in the stakeholders business environments requires dynamic capabilities of hybrid use from both spectrum offering and spectrum utilization perspectives. We focus on identifying and discussing broadcaster incumbents’ and MNO licensees’ key antecedents, processes, and outcomes related to hybrid use of UHF spectrum using the supplementary downlink (SDL) carrier aggregation (CA) concept. Based on our DC analysis, we found incentives that could motivate both the incumbents and licensees to consider the hybrid use of UHF spectrum as a co-creation opportunity, and provide viewponts for the regulatory bodies to be considered when developing new regulatory models for accessing UHF spectrum. Keywords—Incentives, spectrum sharing, broadcasting, UHF, Supplemenatl Downlink, Carrier Agrregation, 5G I. INTRODUCTION Need for the mobile broadband (MBB) is growing at increasing pace [1], placing growing demands on the scarce radio spectrum resources. As increasing percentage of the mobile traffic is video [2] and asymmetry in mobile broadband (MBB) traffic is increasing – average downlink ratio being currently in Europe 8:1. High capacity demand everywhere and the changes in the usage characteristics put mobile broadband service operators against a disruptive change. At the same time importance of Digital Terrestrial Television (DTT) as the main delivery mechanism of TV content has been disrupted and decreased due to alternative broadband delivery mechanisms and higher spectrum fees for all using the UHF band. Although the users interest in the TV content/programs remains or even increases, the ways how TV content is delivered and received by the user will be and have already been changed. More and more users are getting the TV programs via cable, satellite, fixed broadband and, especially, via Mobile Broadband. Also non-linear usage is increasing as well as the demand for interactivity [3]. With these trends, regulators may gradually withdraw some DTT licenses, one by one, and repurpose these frequencies for MBB use. In addition, the most used DTT licenses can continue as long as required or forever, e.g. free national TV licenses with public service obligations that may be financed by other means than commercial funding. It is assumed that most of DTT will be evolved to Terrestrial Digital Video Broadcasting DVB-T2 technology which is more spectrum efficient than DVB-T and also better supports wide area single frequency networks (SFN). In addition to repurposing of spectrum, the regulators are increasingly considering new ways of fulfilling the different spectrum demands in the future due to difficulties in finding unused exclusive spectrum and costly and lengthy re-allocation process involved. Spectrum sharing where systems operate in the same spectrum band has lately received growing importance to meet the mobile traffic growth while maintaining the rights of incumbent systems operating in the bands [4]. This rapid change in the business environment especially underlines the role of the broadcaster spectrum holders and opens up new business opportunities as well as risks for the incumbents due to increasing pressure for innovative flexibility in spectrum usage. So far, BC community have lacked true incentives for changing their spectrum use and on the contrary have seen unilateral acts from regulators and MNOs towards further compressing DTT bands to give room for new MBB spectrum: UHF broadcast spectrum was originally from 470 to 862 MHz, 800 MHz band (790-862) is now been deployed for mobile broadband (MBB) use throughout Europe. World Radiocommunication Conference in 2012 (WRC-12) made a decision on 700 MHz band to be used for MBB after the WRC-15 and FCC in USA has lately made a decision on 600MHz incentive auctions. In the recent European spectrum discussions EU set up a High Level Group (HLG) consisting of mobile and broadcast sectors to study the future use of UHF-spectrum and to deliver strategic advice on the future use of the UHF. The European Conference of Postal and Telecommunications Administrations (CEPT) set up Task Group 6 (TG6) ”Long term vision for the UHF broadcasting band” [5], to identify 1 Nokia Networks, Oulu, Finland. seppo.yrjola@nsn.com 2 Oulu Business School, Oulu, Finland. petri.ahokangas@oulu.fi 3 VTT Technical Research Centre of Finland, Oulu, Finland. marja.matinmikko@vtt.fi 4 Nokia Technologies, Salo, Finland. pekka.hk.talmola@nokia.com 5GU 2014, November 26-27, Levi, Finland Copyright © 2014 ICST DOI 10.4108/icst.5gu.2014.258078