23 January 2026
Digital Networks Act: The case for indefinite spectrum licences
This week the European Commission published its proposal for the Digital Networks Act (DNA), introducing significant changes for mobile spectrum policy. Among the most notable proposals is that spectrum licences should, by default, be indefinite1.
This represents a clear departure from the long-standing European practice of awarding 15–20 year licences and reflects a broader effort to strengthen investment incentives. It also represents a shift towards the approach historically adopted in the US, where spectrum rights have typically been awarded on an effectively indefinite basis.
Why indefinite licences make sense
A key benefit of indefinite licence duration is predictability. Ensuring investment security is crucial, particularly as mobile technologies evolve and network deployments remain capital intensive. Infinite licence durations give operators greater certainty, encouraging them to commit to new / faster network rollouts and adopt emerging technologies. Furthermore, with an indefinite licence duration operators will gain more confidence in the expected payback when investing in their networks.
By contrast, fixed-term licences risk deterring investment closer to the end of the licence duration. This is because operators face the risk of not renewing existing spectrum during the renewal process and therefore capex invested later in the licence period could become obsolete. Furthermore, fixed-term licences can limit the scope for spectrum trading, even where spectrum could be redeployed to higher-value uses or users, as the remaining licence duration may be insufficient to generate a return on the investment.
Indefinite licences could also reduce long-term costs for operators and regulators. Over time, avoiding repeated spectrum auctions or renewal processes lowers transactional and administrative expenses, making indefinite licences more cost-efficient compared to a system of continuous fixed-term awards.
Another important advantage is that indefinite licences turn the spectrum into a more valuable financial asset. Indefinite licences strengthen the ability of operators to use spectrum holdings as collateral for debt financing (e.g. Sprint in the US). This can lower the cost of capital and support continued network investment, especially in periods of high balance-sheet pressure.
Challenges and considerations
Indefinite licences increase the intrinsic value of spectrum rights, which may be reflected in higher initial auction or renewal prices during the transition from today’s fixed-term licences. This could place short-term financial pressure on operators, although this could be mitigated through more flexible payment schedules.
The shift to indefinite licences also places greater reliance on secondary spectrum markets to deliver efficient reallocation over time. To date, this role has largely been fulfilled by spectrum auctions, and European experience with spectrum trading remains limited. While indefinite licences will likely encourage spectrum trading, it is unclear whether it will achieve sufficient scale. For example, in the US, where licences are effectively indefinite, spectrum trading is much more common in comparison to Europe.
Indefinite licences may reduce opportunities for new market entry. Fixed-term licences create periodic opportunities for new players to acquire spectrum directly. Under an indefinite regime, access for entrants will depend largely on secondary markets or any new spectrum that comes into the market.
Finally, indefinite licences may also limit regulatory flexibility. Auctions and renewals allow regulators to attach coverage or other obligations to licences that benefit society and to reassign spectrum when needs shift. Under an indefinite regime, these interventions become more complex and challenging to implement (e.g. the 600MHz Incentive Auction in the US).
Implications for the industry
The DNA marks a major shift in European spectrum policy, moving from cyclical renewals to long-term stability. Operators gain reduced uncertainty, lower costs, and the ability to plan network investments over an extended horizon, which is likely to accelerate 5G rollout and support emerging technologies. Regulators, meanwhile, must ensure secondary markets function effectively and that indefinite licences do not impede competition or public policy goals. If implemented carefully, indefinite licences could lower costs, drive innovation, and strengthen Europe’s digital infrastructure.
1 Under certain circumstances, each Member State reserves the right to award spectrum licences for a fixed period of time – this period should in principle be at least 40 years.
