Estimation of spectrum valuation for 5G dynamic frequency allocation and auctions

The high data rates and diversity of services in 5G require a flexible and efficient use of all the available frequencies. In 5G networks, new approaches of dynamic spectrum sharing will be deployed, allowing Mobile Network Operators (MNOs) to access other incumbents' spectrum, after obtaining a license from the regulator. The attribution of licenses will be made via auction mechanisms valid for given geographical areas and durations. To determine how to bid, each MNO has to estimate his valuation for spectrum i.e., how much he is willing to pay for spectrum. In this paper, we propose a model for estimating that valuation. The model is based on Markov chain modeling of user behavior, to compute the MNO satisfaction as a function of the obtained spectrum. We then illustrate our method by applying it to real operator data.